Identify Harley Davidsons Strategy

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Identify Harley's strategy and explain its rationale.
Harley is a globally recognised brand firmly associated with large motorbikes with a historic emphasis on style, individuality and freedom rather than on technology, speed or sports. From a segmentation view they belong in the heavyweight motorcycle market and are particularly strong within a sub-segment of super heavyweight. Their bikes are strongest in the Cruiser motorcycle segment, feature in the Touring bikes segment (focus on their style and image) and through acquisition of Buell, now have a presence in the Performance models segment. The Harley-Davidson image and the customer loyalty earned and sustained by the unique ‘Harley Experience' are its greatest assets. The appeal of the Harley brand was central to the corporate strategy. The focus of the strategy was to reinforce and extend the relationship between the company and its consumers. The Harley Owners Group was established to be a vehicle to unite management, employees and customers in a special community and to foster relationships and shared experiences towards a bonding with the brand and the company. The loyalty of Harley owners is evident in their repeat purchase behaviour – over 50% of sales between '99 and '05 were to previous owners, while brand attraction helped account for a 20% share from first time buyers. The brand was also successful in effecting a demographic and socioeconomic shift away from young workers to middle-aged, higher income owners. Harley lagged behind its competitors in terms of technological innovation and rapid progress but insisted on playing the game on their home strengths of distinctive features and traditional designs. They lacked the economies of scale of their competitors who could spread the costs of research and development across higher unit volumes of products and multiple product lines. Instead they concentrated on incremental improvements to their engines, frames and gearboxes to increase reliability and...
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