Please read the information in the background material (see attached word document), look for more information and review some of your previous readings , and then provide a 4 to 5 pages response (double spaced) for the executives of HD corporation by answering the following questions:
1.) What strategy (or combination of strategies) did Harley Davidson use to become such a successful organization?
2.) To what extent has Harley Davidson's strategy (or combination of strategies) changed over the years, or been constant?
3.) How does Harley Davidson's strategy (or combination of strategies) "fit" with the environment of the motorcycle industry?
4.) How does Harley Davidson's strategy (or combination of strategies) "fit" with the internal resources and competencies of the firm?
5.) Based on your analysis and findings, what would you recommend to the executives of Harley Davidson Motorcycle Corporation?
NOTE: Please make proper citations and references in APA format. You must use the sources from the background material together with the sources you find your own.
This response should include:
An introduction stating the thesis, position, or central theme you plan to take in your paper, a main body discussing focusing on the key assignment specifications, and a conclusion concisely stating the main points of your analysis and the conclusions you reached.
Be sure to document your sources and provide in-text citations whenever you use information you obtained from a background reading or other outside source, as well as a separate reference list at the end of the paper.
Harley Davidson is a multinational company which was founded in 1903 in the US when William Harley and Arthur Davidson created the first Harley Davidson in their family building. H-D is known for its iconic high powered heavy weight custom and touring bikes. H-D has over 1500 dealers worldwide and a presence in 30 countries with 7900 employees.
Here we will attempt to perform a strategic audit of Harley Davidson. We will look at the strategies that made it such a powerful brand, its strategies over the years and how they fit in with the external and internal environment that the company is exposed to. We will look at the challenges the company faces and whether the current strategy will help the company to overcome these challenges. We will go on to explore strategies that the company might adopt in the future to enhance profitability and productivity, while retaining its position as a powerful motorcycle brand.
1. What strategy (or combination of strategies) did Harley Davidson use to become such a successful organization?
Focused Differentiation Strategy - exploiting the luxury segment
H-D follows a "focused differentiation strategy" by offering its flawless, high quality, high image bikes for a premium. To expand and capitalize on its strength, the company launched a "Delivering results through focus" in October 2009(Gandhi, 2013).
The segment that H-D focuses on, in the different countries, can be profiled as one of the status conscious, wealthy and hungry for brand image consumers. H-D targets this segment by relying on its image and status conveyed by a luxury brand. Like the traditional styling and dated mechanical movement of a Rolex, the value of an H-D motorcycle is in its status and image. H-D motorcycles fall into the highest end of the market in terms of price, quality and finish - the luxury segment of the motorcycle industry. H-D motorcycles add value to the consumer's lifestyle. The European luxury goods market is 38% of the global market. Europe has also doubled its seniors who control more wealth and are likely to spend it on luxury goods. Japanese luxury goods account for 12% of the global market. Prestige is valued in Japanese culture. China, India and Russia, is part of the golden triangle, the newly wealthy who are thirsty for luxury goods. China is said to surpass Japan, by 2015, as the second largest consumer of luxury goods. Consumers are status conscious, wealthy and hungry for brand image. In India sales of luxury goods has risen by 20% per year. In Japan, the VRSC model is popular with the thrill seeking Japanese youth. In India and China, the niche segment rich youth fancy the H-D motorcycles for the status it conveys and this is consistent with the company's focused differentiation strategy. Australia, New Zealand, Canada, Brazil and Mexico are strong markets for the H-D bikes.
Segmentation Targeting and Positioning strategy in new segments across the globe
This strategy has worked beautifully from the beginning in the US. While the offering and positioning is similar across markets, the demographics of the segment in the US seem to differ from that in other countries. In US the profile of the customer has been middle aged white American Male, while in other nations the demographics tilt in favor of the youth. H-D has benefited from the fact that there exists a segment in the US who enjoys casual and recreational riding.
New Product Development and Innovation strategy
This focus strategy entailed improvements in productivity and profitability through continuous upgrading in manufacturing, new product development and operations. H-D, as part of the new strategy, introduced flexibility and customer orientation in its operations. Product development times were shortened and manufacturing was made more flexible to accommodate a variety of new models.
Aggressive Marketing strategy
The other parts of the strategy that contributed to the success of H-D were the efforts to keep the brand image strong through strong marketing effort and top notch after sales service. The strategy also involves differentiating on the basis of the rugged macho image, power, custom accessories and the H-D logo strongly emblazoned on the bikes.
The Distribution Strategy
The strategy also included having a strong and trusted network of dealers.
Global Expansion strategy
Also the new strategy involved global expansion to exploit the niche segments in these attractive new markets (Gandhi, 2013).
1.) To what extent has Harley Davidson's strategy (or combination of strategies) changed over the years, or been constant?
The focused differentiation strategy has been a constant for H-D over the years, and underpins all its other seemingly varied sub strategies. What has changed is the demographics and nationality of the H-D consumer.
Expansion Strategy - exploring new demographic segments
Traditionally, H-D profiles its consumer as the white middle aged male, belonging to the generation of baby boomers. But as the baby boomers aged and retired, this segment started to shrink, resulting in declining sales. The serious challenge to H-D bikes was shaking the image among youngsters as being 'Granddad's bike'(Roese et al, 2013).But H-D through its new branding strategy and marketing efforts has managed to bring in young adults, females, Hispanic and African -American bikers into its fold( Barrett, 2011). The proof of success in the strategic change was evident from the fact that the ...
The paper looks at the business strategy of Harley Davidson and how it fits in with its external environment and internal capabilities. It also looks at how its strategy has worked over time.