OLI model Essay Example | Topics and Well Written Essays - 3000 words

OLI model - Essay Example The above approach neglects critical issues, which are critical in defining a multinational firm. The model has three areas where its main advantages are based, that is; It has its advantages in explaining the MNEs existence. Ownership has its advantages in the sense that it addresses the question of why that some firms will go abroad and not others, it postulates that there are some benefits that allow it to overpower the cost of operating abroad. Since firms are the collection of different assets and MNEs candidate has a higher-than-average asset level to have an internal public goods character. The assets can be used in the production in various areas without reduction of their effectiveness. The assets include product dimensional factor, common to model in terms of a single index of the production of the firm. The highest sophisticated treatment in these lines is found in immediate work on non-homogeneous firms that combines the horizontal simplest version motive for FDI, with an assumption of their productivity differences (Faeth, 2009). The OLI model has an aspect to pay a sunk cost in productivity determination. Low-production can be produced only for the purposes of the home market; while medium productivity ones are chosen to pay for export fixed costs, but the most productive ones chosen to pay for higher costs for FDI engagements. The above predictions are in accordance with the evidence. On a further contribution, the model provides that industries with greater heterogeneities have more firms engaged in the FDI. Location advantages address the question of where the firm chooses to locate. Though the theory of international trade has taken ownership advantages just for granted, to make them in more obvious ways, this model has emphasized more on exploration of alternative motives to be located by MNEs abroad. The major factor that has created much attention is the clear distinction between vertical and horizontal FDI. Horizontal FDI happens when

Harley Davidson Strategic Analysis Essay Example | Topics and Well Written Essays - 3000 words

Harley Davidson Strategic Analysis - Essay Example To comply with the US company law, Harley Davidson has adopted various trademarks and logo such as H-D, Harley, the motorClothes, V-Rod and Harley Owners Group among others. Economic factors Despite the recent economic downturn that affected local and international companies, Harley registered remarkable sales and growth of its stock prices an aspect that created a strong trust from the shareholders. According to Harley Ziemer, the company has put in place effective monetary strategies thus making it to be recession-resistant and not recession proof. Social factors One of the notable social factors that Harley Davidson has adopted is the safety of its brands. To curb the high number of accidents that caused high rate of deaths in 2000, the company initiated Rider’s Edge, an instruction program that was spearheaded by the dealers. In this way, riders were trained on how to use the company motorcycles to reduce the number of accidents on the highways. Technological factors To me et the high demand of its products, Harley Davidson emulates innovation through intensive research and development. For example, the establishment of 43,000 square feet Buell research and development facility has made the company to increase its production significantly. In the same way, the company has continued to allocate significant funds to cater for research. For instance, in 2001 the company spent $80.7 million towards research while in 2000 and 1999 it spent $75.8 million and $70.3 million respectively (Wheelen et al, 2002). Environment factors Based on the environment control requirements by the federal local and state authorities, Harley-Davidson has registered with US Environmental protection Agency (EPA). In this way, the company has adopted the rules that are put in place by the State of California Air Resources board to deal with the issues of noise and harmful emission. Legal factors Despite the various legal suits that has faced the company such as the 2001 class act ion in Milwaukee County, the company has initiated strong legal department to deal with issues that may jeopardize its operations. For example, after the purchase of the Pennsylvania production facility, the company in collaboration with Pennsylvania Department of Environment Protection has initiated investigation and feasibility studies to analyze the impact on the facility on the lives of the neighbors and customers. Porter 5 forces Despite of its extensive marketing strategies, Harley Davidson is likely to face stiff competition in the market. Some of the major competitors are Honda, Suzuki, BMW, Kawasaki and Yamaha. The company low and competitive prices have been not only influenced by the market forces but also by the bargaining power from the customers. Being one of the Porters 5 forces, bargaining power of the suppliers has an impact on the Harley Davidson sales. This is based on the fact that the company has created a strong link with its suppliers in order to reduce the co sts of raw materials. To deal with the competition in the motor cycle industry, Harley Davidson has adopted various advertising avenues including magazines, television, direct-mail advertising, cooperative programs as well as public relations. According to Joanne, the company marketing vice-president, Harley Davidson has strong marketing strategies that will drive the company towards achieving its goals in the next 100 years. One of the major opportunities for the company is the elimination