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Navistar's Innovation During Recession

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Navistar a manufacturer and marketer of medium and heavy trucks and mid-range diesel engines. (NYSE:NAVZ) viewed an economic downturn in 1990-1991 as an opportunity to refocus and think long-term.

During the 1990-1991 recession, Navistar strengthened its market position through innovation by creation of new and/or evolving their products and/or services such as Heavy-duty trucks, Midsize trucks, School buses, Standard truck and trailer aftermarket parts, Diesel engines, Engines for industrial, agricultural and marine applications, and Standard engine and aftermarket parts. Relative to the competition, Navistar doubled its already higher-than-average level of spending on research and development during this timeframe. However, during the same timeframe (during recession) Navistar spent significantly less on sales, general and administrative (SG&A) than its competition.

During the recessions Navistar was committed to business development through innovation, and came out stronger when the economy rebounded.

Although there was an increase in spend in advertising by market leaders when economy rebounded. Conversely, Navistar spent smaller amounts of money in periods of growth since the innovations helped them to market their product and services quickly with minimal spend on Marketing.

Overall, by the end of the 1990-1991 recessions, Navistar viewed the recession as an opportunity to gain market-to-book ratios that were 25 % higher than that of its competition. The common thread that appears to run through Navistar’s tapestry of success is that it emerged stronger after a recession by taking a long-term approach and increasing spending in vital areas such as sales.


YouSigma. (2007). "Navistar's Innovation During Recession." From

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