1. Historically, how did Harley-Davidson manage to dominate the U.S. motorcycle industry? Starting in the 1970s Harley-Davidson got into trouble; what changed? 2. What were the major ingredients of Harley-Davidson’s transformation process and what is your evaluation of that process?
3. As at the time of the case study, evaluate the sources of Harley-Davidson’s competitive advantage and their sustainability? If you were leading Honda, where do you assess Harley-Davidson as being vulnerable? 4. In terms of challenges facing Harley-Davidson as it enters the 21st Century, explain your evaluation of the Company’s strategy as described in the case?
Porters’ 5 forces analysis during the earlier years (1903 to 1950’s) 5.2
Porter´s 5 forces analysis after the entrance of the japanese (1970´)
Porter’s Generic Positioning Strategy for Harley-Davidson (Pre-AMF vs Post-AMF)
Buyers Needs and Values – Dimensions of Differentiation (early 1900’s to late 1950’s)
Harley-Davidson’s Transformation process in the 1980’s (through Kotter’s Change Management model)
Key ingredients in Harley-Davidson’s Transformation process (through the Capability Platform)
Harley-Davidson’s Competitive advantage (incl. Buell) and their sustainability compared to Honda through the Positioning Model
Porters’ 6 forces analysis on Harvey-Davidsons for the future – with a focus on the heavyweight bike segment (2005 – 2020)
HARLEY – DAVIDSON: Preparing for the Next Century
1. Historically, how did Harley-Davidson manage to dominate the U.S. motorcycle industry? Starting in the 1970s Harley-Davidson got into trouble; what changed?
2. Historically, how did Harley-Davidson manage to dominate the U.S. motorcycle industry? Starting in the 1970s Harley-Davidson got into trouble; what changed?
Harley-Davidson (Harley) was founded in 1903 as a small business and became the largest motorcycle company in the world after 15 years of operations. Moreover, by 1950, Harley-Davidson was the leader in the U.S. Market with over 60% market share. Historically, the key success factor in Harley-Davidson combined two important ingredients: several competitive advantages and favorable conditions in the motorcycle industry since the industry was almost new and the barriers to enter or the forces affecting it were weak (see appendix 5.1). After the victory of Walter Davidson riding a Harley-Davidson in a race and the development of unique innovations such as the V-twin engine, Harley obtained a strong reputation of being the pioneer in the motorcycle industry. Further, a high investment in Research, Development and innovation, an adoption of an “image and lifestyle” marketing strategy, the “raw power” appearance of its products, and the powerful connection with the American national symbols, made Harley-Davidson very attractive for the society, and help the brand in gaining customer´s loyalty (especially the men). Through Porter´s 5 forces framework (see appendix 5.1), it can be noticed that by the moment Harley-Davidson entered to the industry, the market was plenty of business opportunities and this context allowed Harley-Davidson to obtain a strong position until 1960: low barriers to entry due to the technological investment required and the lack of tariff barriers imposed by the government, low rivalry, weak supplier´s and buyer´s power (not concentrated groups). The threat of substitutes was also low but increasing (low-medium). The industry type at that moment was considered an oligopolistic industry (just two competitors in the market: Harley and The Indian). Moreover, Harley-Davidson strategy (Porter´s Product Generic Positioning Framework) was focused on the narrow and differentiation quadrant (see appendix 5.3-A). Harley started producing the V-twin engine which had unique cylinders, design, and allowed owners to tinker with their engines. With its rough image and high prices,...
References: * 5.1. Porters’ 5 forces analysis during the earlier years (1903 to 1950’s)
* Type of Industry: Oligopolistic
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