Chicago Truck and Diesel: Facing the Asian Crisis

Published 01 Jan 1998
Reference 4736
Topic Strategy
Region Asia
Summary

The case describes the process of negotiations between a large American MNC, an Asian government, and a local fast growing conglomerate. Market access for trucks is traded against local production of diesel engines, but the requirements change constantly, as do competitive pressure and the relationship with the local partner. Then the Asian crisis hits.

Teaching objectives

The case demonstrates the complexity of dealing with fast changing government policies in developing countries and the volatility of emerging markets. Distributorship agreements, local assembly with high local content, acquisition or greenfield operations are options open to the MNC at times. The entire local scene is played out in the context of global competition in the oligopolistic market of trucks and diesel engines.

Keywords
  • RD0398
  • US
  • AUTOMOBILE