The Internationalization of Business: One Company's Response

The emergence of the global marketplace became clear to Cummins Engine Co. in the late 1970s as a result of: 1. a search for new markets and supply sources, 2. rationalization -- taking out excess and obsolete capacity, and 3. competition from European and Japanese manufacturers. After observing foreign inroads in motorcycle and steel manufacturing, Cummins decided to work hard on product, price and costs, and performance. Price increases stopped 5 years ago and a "New Standards of Excellence" campaign was begun. Examining global competition first-hand helped strengthen the firm's position. The toll on short-term profitability has been substantial, but recovery is under way. No domestic business has been lost to foreign competition; domestic and international market shares have grown. International competition has raised standards of performance in quality, cost, productivity, product introduction time, and smooth operations.