The trend of economic nationalism (e.g., Brexit) that is affecting many countries around the world promotes keeping manufacturing jobs in the local country. As management accountants, we are concerned about how this trend will affect companies, particularly global companies, as they strive to adapt their strategy and value chain to the new economic nationalism. Three companies that are relevant in this matter are Harley-Davidson (http://www.harley-davidson.com), a manufacturer of motorcycles, GAM Enterprises Inc. (http://www.gamweb.com/), a manufacturer of precision parts used in automation in a variety of industries, and Mobile Outfitters (https://www.moutfitters.com/), a company that manufacturers screen protectors for the Apple iPhone.

Harley-Davidson (HD) has recently decided to open a manufacturing plant in Thailand to serve the growing market for its bikes in the Asian countries. HD has faced criticism for moving manufacturing jobs offshore, but HD asserts that it has little choice given the very high 60% tariff for motorcycle imports that is common in these Asian countries. Locating in Thailand would not only reduce tariffs into Thailand, but also reduce tariffs to the countries that are in a trading partnership with Thailand, the Association of Southeast Asian Nations (ASEAN). The ASEAN countries include Thailand, Indonesia, Malaysia, Philippines, Singapore, Brunei, Laos, Cambodia, Myanmar, and Vietnam.

GAM Enterprises Inc. is an Illinois-based manufacturer serving other industries that are using automation to improve the efficiency in their processes. GAM began moving its operations in Germany back to the U.S. in 2014. The reason was that GAM needed to be closer to its customers in the U.S. This was a resource for its current customers and also provided a way to attract new customers in the U.S.

Mobile Outfitters (MO) is a U.S.-based company that produces anti-glare and screen protectors for the Apple iPhone. MO has not been able to find a U.S. manufacturer that will meet its desired specifications, and as a result has outsourced some of its product to a firm overseas.

Required

For each of the three companies above—Harley-Davidson, GAM Enterprises, and Mobile Outfitters—answer each of the following questions:

1. Which competitive strategy (cost leadership or differentiation) do you think the company is using and why? Would the company’s decision to relocate manufacturing into or out of the U.S. affect this strategy?

2. How would the relocation of manufacturing facilities to different countries affect the company’s value chain?