CASE CONTENT & OUTLINE
2.0 Harley-Davidson’s Emergence into India
2.1 Political Environment:
How India’s Political & Economic environment influenced Harley-Davidson’s strategy. 2.3 Culture & Ethics:
Explanation of Harley-Davidson’s managing of cultural differences, and the company’s handling of ethical issues while breaking into India’s market. 2.4 Comparative Advantage:
A discussion of absolute and comparative advantage and economies of scale. 2.5 Government Influence:
A discussion of the impact of tariffs on Harley-Davidson’s strategy to enter India.
2.6 FDI Strategy:
Factors explaning how India’s FDI & Government policies influenced Harley-Davidson to enter India’s market.
Section 1.0 INTRO
“It’s not the destination, it’s the journey.” The long-used slogan of Harley-Davidson represents the American Dream. Harley-Davidson is the leading producer of heavyweight motorcycles in the United States. They are the most iconic producer with a fan base that stretches all around the world. It all began in 1903, in Milwaukee, Wisconsin, USA, when Bill Harley and Arthur Walter Davidson developed a one-cylinder motorcycle which built in a small wooden shed. By 1905, they had produced 11 motorcycles and were producing 154 by 1908. Other members of the Harley and Davidson families quickly joined the team. In 1909, they produced the 1000 CC V-Twin which is still in use today. In 1917, one-third of all Harley’s were used to aid in the WWI war effort which continued through WWII. By the end of the wars in 1945, 90,000 Harleys had been provided to the WWI and WWII efforts combined. In 1953, Harley’s competitor, Hendee Manufacturing, went out of business. As a result, Harley-Davidson was the only American manufacturer of heavyweight motorcycles for the next 46 years. (Melief, Budgaard, & Hathaway, 2006 )
In 1969, Harley merged with the American Machine and Foundry Company (AMF). Sales and quality declined during this time because they slashed the workforce which resulted in lower quality bikes. It was not until 1981 that Harley became independent again. Harley-Davidson witnessed a revolution in the 1970’s with the birth of the Cruiser. This was a new bike with a sporty front that led Harley to win the AMA Grand National Championship in dirt track racing. Two other models were produced that decade in an attempt for a sportier appearance. (Harley-Davidson, 2012)
Harley-Davidson represents an American culture. Harley has extremely loyal customers and maintains this loyalty in the community through events, clubs, and a museum. In fact, Harley-Davidson brand and logo items accounted for $40 million of the company’s revenue in 2010. Many riders even show their love of the company with a logo tattoo. (Harley-Davidson, 2012) In the 1980’s, half of its consumers were under the age of 35. Today, the median age has risen to almost 47. Harley-Davidson motorcycles are associated with various subcultures including motorcycle clubs and outlaw motorcycles gangs. To further riders’ commitment to Harley-Davidson Harley Owners Group (H.O.G) was formed for motorcycle owners to show their passion and pride for owning this great piece of machinery. The group currently has more than one million members and has gone international, with the first official European H.O.G. Rally occurring in 1991. (Harley-Davidson, 2012)
Harley-Davidson continues to be a leader in the motorcycle industry, but their market share has declined to 50% for heavyweight motorcycles. They have seen increasing competition from Honda, Suzuki, Yamaha, and other Japanese companies. One of the biggest problems Harley-Davidson is facing is the aging baby-boom generation, the generation with the most commitment to Harley-Davidson. This phenomena has caused Harley-Davidson to seek opportunities in international & emerging markets in Asia and Europe. (Melief, Budgaard, & Hathaway, 2006). In one such quest for a new consumer base,...
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