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Journal of Strategic Management

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ISSN: 1649-3877

Listed by: Cabells and EBSCO

Frequency: 1 Volume + 1 Hard Copy per year

 

Turnaround Strategy at Cummins Engine

JSME vol 1 issue 1

Author(s): Henry Schacht (Lucent Technologies, USA)

Abstract:
The 1980s were a critical period for global manufacturing, particularly for U.S. companies, as they came to grips with the consequences of maturation of markets and enhanced global competition. Established, even dominant, companies in the U.S. came to the sobering realization that they were losing their competitive edge to companies in Europe and Asia. Many U.S.-based companies rather suddenly found themselves at significant disadvantage in trying to maintain their market positions in basic manufacturing. How such companies responded is an interesting story and one that is not yet finished.
In the early 1980s, Cummins Engine Corporation was faced with declining sales, new foreign competition and rising domestic environmental requirements on its product in the diesel engine business. The principal issue in this case study is how Cummins faced up to the realities of global competition and domestic regulation - specifically, how this old-line American manufacturing firm designed and implemented a comprehensive long-term strategy to restore pre-eminence in diesel engines and how competitors and the financial markets responded to this strategy. A great many factors played a role in defining Cummins' strategic vision and creating a plan to make that vision real.

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