Case Study for Harley-Davidson

Topics: Marketing, Strategic management, Value chain Pages: 8 (2347 words) Published: September 3, 2010
1.0 Introduction
This report is to discover and solve the problem caused by the internal and external of the company. Harley-Davidson is a famous motorcycle manufacturer. But within high competition, Harley finds that it is lack of technology advantage, inapposite strategy for development, and gets more competition by analysing its capabilities and resources and its competitive environment. To solve these problems, Harley has to take three steps which is mention in recommendation.

2.0 Company Profile
Harley-Davidson is a major US maker of motorcycles and the nation's #1 seller of heavyweight motorcycles. The company offers 35 models of touring and custom Harleys through a worldwide network of more than 1,500 dealers. Harley models include the Electra Glide, the Sportster, and the Fat Boy. (From BaiduBake)

3.0 Harley-Davidson Performance
Harley-Davidson was founded in 1903. During 1903 to 1981, Harley-Davidson was stepping into maturity. It gained great market share in US. But Honda had replaced Harley as market leader in heavyweight motorcycles in the US, by the end of 1970s. In 1981 Harley-Davidson took new production methods and developed new spirit of cooperation between workers and management. Harley-Davidson got back to US market. (See table 8.2)

This table shows that Harley-Davidson current performance is good in domestic market. It almost gets 50% market share in US. But it also reveals its weakness on international expansion, especially in Europe. Harley-Davidson has only about 7% market share in Europe. This means most of the European market share is hold by its competitors such as Honda or BMW. 4.0 Harley-Davidson Strategy

4.1 Porter’s Generic Strategies

Cost leadership: This strategy emphasizes efficiency. By producing high volumes of standardized products, the firm hopes to take advantage of economies of scale and experience curve effects. The product is often a basic no-frills product that is produced at a relatively low cost and made available to a very large customer base. (From Market Planning & Strategy)

Differentiation: Differentiation is aimed at the broad market that involves the creation of a product or services that is perceived throughout its industry as unique. The company or business unit may then charge a premium for its product. This specialty can be associated with design, brand image, technology, features, dealers, network, or customer service. (From Market Planning & Strategy)

Focus: In this strategy the firm concentrates on a select few target markets. It is also called a segmentation strategy or niche strategy. It is hoped that by focusing marketing efforts on one or two narrow market segments and tailoring marketing mix to these specialized markets, to better meet the needs of that target market. (From Market Planning & Strategy)

Harley-Davidson focuses on its heavy-weight motorcycle market. Harley’s competitive advantage lay with heavy-weight bikes. Its big, throaty and V-twins had closely linked to Harley’s image since its early years. This impression not only influence the company’s marketing but also to its strategy.Beside image influence, customer’s different demand also affects Harley’s strategy. These customers between 30 to 40 years old show more interests in its heavy-weight motorcycle. And the younger people prefer Harley’s competitors’ products as its high technology engine and more fashion design. This may be caused by Harley’s old-style image. But it majorly shows one of the weaknesses for the younger customers. Harley’s technical development can not satisfy customer’s demand. Harley hardly gains tech advantage to compete its competitors such as Honda and BMW. So at present Harley-Davidson has to focus on heavy-weight motorcycle as its good image and customer base. But the case shows that Harley-Davidson trend into differentiation strategy in future development.

5.0 Industry Environment
5.1 Porter’s Five Forces
Porter’s Five Forces of Competition...
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