Identify Harley- Davidson’s strategy and explain its rationale
Harley Davidson opted to follow a Differentiation Strategy, fact that becomes evident since everybody knows that acquiring a Harley means much more than just having a motorbike.
But let us go deeper in this. What is it understood by a Differentiation Strategy? Obeying to Michael Porter’s model, firms can follow two types of business strategies in order to fight against the competitive forces (threat to substitutes, buyer power, supplier power, rivalry and barriers to entry):
While the first one is focused on offering the product at the lowest possible cost, the second one pursuits developing and adopting a system that leads the customer to see its product as something different and unique. In this scenario, it becomes obvious than Harley’s brand implies more than having a vehicle; it represents a way of life.
But how has this business been possible? Harley’s design tries to represent the American dream, freedom, adventure… If it would be made an interview to a general biker, they would affirm that Harley’s owners are not the typical bikers, it is more than that. They pretend to show a kind of elegance and respect for the American world, they are very centered on maintaining and promoting a very personal relationship with the customer, in order to make them be seen as different.
It is worth mentioning that one key factor for a differentiation success is the brand loyalty from the customer. In this sense, Harley Davidson decided to create Harley Owners Group (1983), in order to make their customers participate and comment their experience.
It must not be forgotten the interesting fact that Harley’s investment is much lower than its competitors, and as a result, Harley’s engines are a good example of technological backwardness. On the contrary, this technological backwardness represents per se an issue which is quite valued by the costumer and...
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