Polaris Industries Inc.
Polaris Industries Inc.
In September 2010 Suresh Krishna, vice president of operations and integration at Polaris
Industries Inc., a manufacturer of all-terrain vehicles (ATVs), Side-by-Sides,1
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sat in his office in Medina, Minnesota, deliberating the recommendation he was developing for a
new plant to manufacture the company’s Side-by-Side vehicles. (See Exhibit 1 for pictures of
Polaris vehicles.)
The economic slowdown in the United States had put considerable pressure on Polaris’s
profits, so the company was considering whether it should follow the lead of several of its
competitors and open a facility in a country with lower labor costs. China and Mexico were
shortlisted as possible locations for the new factory, which would be the first Polaris
manufacturing facility located outside the Midwestern United States. By the end of the year
Krishna needed to recommend to CEO Scott Wine and the board of directors whether Polaris
should build a new plant abroad or continue to manufacture in its American facilities.
Polaris Industries Inc.
Established in 1954, Polaris was a manufacturer of high-performance motorsport products,
including ATVs, Side-by-Sides, and snowmobiles. (See Figure 1 for Polaris sales by-product.)
With nearly $2 billion in sales in 2010, it was a strong player in the $10 billion power sports
market alongside competitors Yamaha, Honda, Arctic Cat, Ski-Doo, and Harley Davidson.
Polaris’s customers were primarily located in North America (85 percent); its international
customers were concentrated in Europe. Foreign markets were becoming increasingly important
to Polaris; international revenue had grown 21 percent in 2010 and was forecasted to grow even
more in 2011. Polaris products were sold through 1,500 distributors in the United States and
1,000 distributors in the rest of the world.
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