Case Name :      Allison Transmission: Creating a European Face

Authors :           Charles Dhanaraj

Source :             Ivey Publishing

Case ID :            904M45

Discipline :        Strategy

Case Length :    21 pages

Solution Sample availability : YES

Plagiarism : NO (100% Original work)

Allison Transmission Division is a $2 billion unit within General Motors (GM) with a very specialized product: heavy-duty automatic transmissions for commercial vehicles. Although the division is part of GM, more than 90% of its output is directed to external customers. Presents a familiar challenge facing many globalizing firms: a pioneer and leader in a market holding more than 60% of the market in North America, but less than 10% outside North America. The presence of leading original equipment manufacturers in Europe who are the key customers for Allison and the large market potential in Europe present a strategic opportunity, but the cultural and institutional differences pose formidable challenge. The technological differences in Europe augment this challenge and the uncertainty surrounding a new hybrid technology that is emerging in Europe complicates the decision. Also presents the company’s attempts in Europe for a decade, leading to the trigger issue–a decision between a joint venture in Austria and a wholly owned unit in Hungary.