Harley Davidson Case Study
I) Problem/Issue Statement:
Harley Davidson, a highly distinctive motorcycle company whose success was built on its brand image, may have reached the pinnacle of its growth in the late 1990s and early 2000s. The combined effects of a market focus on a narrowing demographic group, the difficulty experienced in gaining market share in Europe, and short-term forecasting problems led to the concern of the company’s future.
II) Alternatives: a) Status-quo b) Focus on building the Buell name brand c) Market the Harley Davidson image to foreign nations (e.g. discovery channel)
III) Analysis: a) Status-quo
Harley Davidson motorcycles focused a specific segment of the bike industry. Through this focus, Harley dominated the U.S. motorcycle industry. The type of bikes Harley had produced was custom bikes – custom bikes were the largest segment on the U.S. heavy weight market for motorcycles and had become the curiosity for non-cyclists in the United States. Between 1198 thru 2002 the custom motorcycle segment accounted for over 50% of the total heavy weight motorcycle market. The current strategy had proven to be a winning direction for the U.S. based corporation. In the heavy weight segment of the motorcycle industry, Harley dominated the market with approximately 50% of the market share in the U.S. from 1998 to 2003. However, market shares abroad were not as successful. In Europe, Harley held between 5 to 8 percent of the market shares from 1998 to 2003.
A contributing factor to Harley’s inability to capture a larger market in the foreign countries is the segment the Harley Davidson motorcycle focuses on. As indicated earlier, Harley Davidson motorcycles were primarily custom bikes – highly priced, highly personalized, impractical vehicles. However, these types of bikes did not appeal to many foreign nations. For example, many consumers were looking for low-cost transportation due to the high cost of fuel or lack of income – e.g. Europe &
Harley Davidson, a highly distinctive motorcycle company whose success was built on its brand image, may have reached the pinnacle of its growth in the late 1990s and early 2000s. The combined effects of a market focus on a narrowing demographic group, the difficulty experienced in gaining market share in Europe, and short-term forecasting problems led to the concern of the company’s future.
II) Alternatives: a) Status-quo b) Focus on building the Buell name brand c) Market the Harley Davidson image to foreign nations (e.g. discovery channel)
III) Analysis: a) Status-quo
Harley Davidson motorcycles focused a specific segment of the bike industry. Through this focus, Harley dominated the U.S. motorcycle industry. The type of bikes Harley had produced was custom bikes – custom bikes were the largest segment on the U.S. heavy weight market for motorcycles and had become the curiosity for non-cyclists in the United States. Between 1198 thru 2002 the custom motorcycle segment accounted for over 50% of the total heavy weight motorcycle market. The current strategy had proven to be a winning direction for the U.S. based corporation. In the heavy weight segment of the motorcycle industry, Harley dominated the market with approximately 50% of the market share in the U.S. from 1998 to 2003. However, market shares abroad were not as successful. In Europe, Harley held between 5 to 8 percent of the market shares from 1998 to 2003.
A contributing factor to Harley’s inability to capture a larger market in the foreign countries is the segment the Harley Davidson motorcycle focuses on. As indicated earlier, Harley Davidson motorcycles were primarily custom bikes – highly priced, highly personalized, impractical vehicles. However, these types of bikes did not appeal to many foreign nations. For example, many consumers were looking for low-cost transportation due to the high cost of fuel or lack of income – e.g. Europe &