Case Study of Harley-Davidson

Harley-Davidson's History and Impact


Harley-Davidson, which was established in 1903 by William Harley and the three Davidson brothers, is a significant player in the US motorcycle market with a concentration on the creation of a variety of high-quality bikes. The business has had consistent growth in both sales and revenue since it was founded. In example, from 1984 to 2008, the business reported increasing both output and income each year. The North American and European markets accounted for up to 88% of Harley-revenue. Davidson's However, the global financial crisis that began in 2008 had a huge impact on the company's expansion plans and caused a dramatic shift in revenue and profitability. In 2009, Keith Wandell became the CEO of the company becoming the first outsider to hold the topmost position at Harvey-Davidson. The immediate focus of the new CEO was to steer the organization back to its track of consistent growth. The paper focuses on the strategies of the company, its capabilities against Honda as well as a suggestion on how the company can enhance its competitiveness.

Harley-Davidson's Strategies and Rationale


Harley-Davidson employed different strategies that contributed to its growth. The management emphasized on its brand and image, which they perceived to be the greatest driver of its growth over the years. The bikes from the company, since its inception, was considered a symbol of status in the American society. The brand also represents the core value of the American culture, which encompasses individualism, adventure, and freedom. As a strategy, Harley-Davidson moved to utilize the Harley brand, and convey it to the target market to drive its performance agenda.Another strategy employed by the company was a focus on the customers, especially to ensure that the customers experienced the image portrayed by the company. Through the formation of Harley Owners' Group, Harley-Davidson organized social and charity events that brought together its customers (Grant, 2010). There were also road shows, rallies, and other events. Such was instrumental in attracting customers (Marthur, 2007). The rationale for bringing together the customers of the company through such events was to ensure that they feel part of the company. The customers became loyal, and this worked in favor of the company as its sales increased. The customers continued to invest in the various product offering of the company. Of the total sales by Harley-Davidson, half were made by the existing customers and can be linked to the vibrant customer relations.Significant improvements were also made to the products as a strategy for improving its performance. Harley-Davidson consistently made efforts to improve the quality and performance of its products. This resulted in up to 34 different models of bikers (Grant, 2010). The rationale for this strategy was to ensure that it is ahead of other players in the industry by offering its customers a wide range of products from which they to choose. Harley-Davidson established the Prototyping Lad to drive its product improvement and development initiatives. To account for this initiative, the company received about 188 patents awards. The distribution of the organization's products was also reconsidered in a bid to steer growth. The organization implemented dealer support programs. In turn, the dealers were required to meet high standards of after and before sales services. The rationale for this was to enhance the customer's experience and improve the sales of the company. Further, the dealers were required to have the full range of Harley-Davidson's products. Harley mainly sold its products through exclusive dealers. This approach was instrumental in increasing the sales of the company as the customer were unlikely to be I influenced by competing brands while at the dealer shops. As part of its growth strategy, the company also moved to introduce its products in the international markets. Going international, the company would have an opportunity to access a wider market and grow its sales volume (Paele. Such may be reflected in increased revenue. The international growth strategy led to the establishment of a regional headquarters in Singapore to take care of the Asia-Pacific regions. Notable changes were also apparent in the manufacturing process for its products. The company implemented lean management practices to costs while improving the quality of its products at the same time. They also applied JIT scheduling after witnessing its effectiveness in Toyota Company. The changes in the manufacturing processes were to improve quality of its products through efficient means. The changes in the manufacturing process were expected to steer its aggressive growth initiatives.

Comparison with Honda


Compared to Honda the most significant resource of Harley-Davidson was its brand image in the market. As noted in the first section, the company's image signified a higher social status in the markets it operated. Each biker who was interested in affirming its status in the society perceived Harley-Davidson's bikes to be the ultimate status. Harley's bikes also depreciated at a slower rate compared to those offered by Honda. Honda, on the other hand, had an advantage in its ability to produce its bikes in quantities. Such means that Honda was able to produce its bikes at relatively lower costs compared to Harley-Davidson. Honda also trades in multiple products, including motor vehicles. For Harley-Davidson to gain a competitive advantage derived from cost and differentiation, it must compromise on the target market from the high-end to the masses. Such means that it has to change its production to relatively cheaper brands to efficiently compete with Honda.

Threats Faced by Harley-Davidson


The changing demographic is a significant threat that the company faces. For a long time, the company's target market averaged 50 years old. However, the number of this age-group is expected to shrink further, which compromise the performance of the organization. Another threat emanates from the widespread availability of its products in the market. Initially, the motivation for the purchase of the bikes by customers was the exclusivity and uniqueness. This enhanced the image of the riders. However, due to the widespread purchase, the people are no longer motivated to buy the bikes considering the premium pricing.

What Harley-Davidson Needs to Do


The company can take strategic measures and ensure it competes effectively with other players in the industry. The company should shift its focus to the younger generations, especially those below age 35. The groups are likely to enjoy technology-based bikes. The initial market for the company is transiting. Hence they are no longer motivated to buy the bikes from the company. This means that the company has to be responsive to the needs of the market, a critical strategy to revolutionize its performance (Hill & Jones, 2008). Further, the company can diversify its products in the market. Such means that it has to introduce additional products to be able to increase its revenue. Through diversification, the company will be able to cushion itself against the adversities that often characterize the market.

References

Grant, R. M. (2010). Contemporary Strategy Analysis: Text and Cases. West Sussex, England : John Wiley & Sons.
Hill, C. W. L., & Jones, G. R. (2008). Strategic management: An integrated approach. Boston: Houghton Mifflin.
Mathur, U. C. (2007). Product and brand management. New Delhi: Excel Books.
Palepu, K. G. (2007). Business analysis and valuation: IFRS edition, text and cases. London: Thomson Learning

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