A CASE STUDY ON HARLEY
DEFENDING A PIECE OF DOMESTIC PIE
About Harley Davidson
Founded in 1903 by William S Harley
and the Davidson brothers.
Symbolizes the all-American attributes of individuality, freedom and passion for adventure.
By 1960 Japanese motor companies hit the country
In 1969 AMF, a recreational equipment conglomerate
By 1976 Harley-Davidson offered 4 models
With the 80s Harley-Davidson started its revitalization program with the government help.
Harley-Davidson Inc. had $1.04 billion net income (up 8.7% from '05) it sold 349.196 units to retailers (21,7 % abroad) and it has a domestic market share of 49,3% for heavyweight motorcycles.
Strong investment in research and Customization
The only American manufacturer
Not the best Engines
American Company, so not a very good image abroad
Current markets becoming too narrow for higher profits
Increasing Immigration in US
Harley Davidson: a victim of unfair competitive
practices or its own lack of strategic vision ?
In the 60s and 70s Japanese technology bumped the world. Harley Davidson should have been prepared to the entry of new products, reactions with strong advertising and campaigning.
It should have developed better products and processes before the Japanese could come into the market.
Despite the lack of data to defend the Japanese against selling below costs (dumping), it looks like they were more efficient in their processes. Therefore, Harley Davidson was not a victim of unfair competitive practices.
Harley Davidson: Does Size Matter ?
Being a small scale producer can pose to be a disadvantage or rather a problem when competing with a producer who is able to reap the benefits of large scale economy.
The Japanese were selling their products worldwide, they could reduce their costs due to large scale production.
Therefore, size does matter !
There are two main strategies
So at the end we have four strategies :
-Leading by costs in a wide objective
- Leading by costs in a narrow objective
- Leading by differentiation in a wide objective
- Leading by differentiation in a narrow objective
Until now they have been focusing in a single market
It is recommended for Harley Davidson to open its scope and increase its exporting efforts.
They could be the American symbol in America, but should also focus the advertisements in Europe and Asia to the freedom.
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