News Report #2
Magazine: Global Trade
Publication Date: March-April 2013
Osceola is home to a 200,000-square-foot Polaris Industries factory, where more than 500 workers manufactured parts for snowmobiles and all-terrain vehicles before the company announced in 2010 that it would be moving the plant’s operations to Mexico within a few years. The opening of the 425,000-square-foot Monterrey plant was one of the turning points for the company’s aggressive exporting plan, proving that the company could produce the same high-quality products in a foreign land. And it also showed that Polaris was serious about its commitment to the international market. In its first year, the assembly plant produced 22,000 vehicles, 19,000 engines and the company projects more than $30 million in savings by the end of 2013.
The main point of this article is why firms become multinational. There are five main categories for which a firm would go multinational. Two of the five categories can be apply to Polaris. The first one is market seekers. Market seekers produced in foreign markets to either satisfy local demand or to export to other markets than their own. Polaris needed another factory close to home in order to supply goods. The next category is production efficiency seekers. Production efficiency seekers produce in countries where one or more factories of production are underpriced relative to the productivity. Polaris choose to build their first factory…