Income Tax Law

Harley-Davidson, Inc., February 2004
1.Identify Harley-Davidson’s strategy and explain its rationale.
Brand image:
Harley-Davidson (Harley) doesn’t just sell motorcycles; it offers its customers a whole new lifestyle and experience. The brand image represented the fundamental American values: “individuality, freedom, and adventure.” Harley’s products distinguish themselves with the unique exhaust growl, and the company furthers the possibilities with customization, such as aftermarket chrome, offered by dealerships. Besides the products, Harley formed the Harley Owners’ Group (HOG) to organize people with the same interests to enjoy the Harley experience. This marketing strategy stabilizes the company’s market share, and brings repeating buyers: as much as 50%motorcycles sold between 1999~2003 are to previous Harley owners.
Concentration on specific market segment:
Harley’s marketing strategy concentrates on only the super-heavyweight motorcycle segment of the market. This particular segment not only consists of motorcycles with the most profitable margins, but also corresponds to Harley’s masculine image.
Distribution:
since the late 80’s, Harley has reorganized its distribution network. Harley realizes that it has to have the appropriate environment to market to “professionals who possessed the disposal income to layout $17,000 on a motorcycle for occasional leisure rides”, and thus retired many poorly managed shops, and established exclusive dealerships with offering to Harley’s full line of motorcycles, parts, service, rental, courses, etc.The comprehensive before and after sale services offered more exposure and opportunities to Harley’s motorcycles.

2.Compare Harley-Davidson’s resources and capabilities to those of Honda? What does your analysis imply for Harley’s potential to establish cost and differentiation advantage over Honda?
Economies of scale:
Harley ships less than a third of a million motorcycles per year, while Honda’s world... [continues]

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