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Harley Davidson - Business Strategy

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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.

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Introduction

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 ...

Solution Summary

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.

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See Also This Related BrainMass Solution

Strategic Management of Harley Davidson Motorcycle Corporation

Please read the information below and the attached info and in a 4 to 5 pages report for the executives of HD corporation, please help me by answering the following questions:

What strategy (or combination of strategies) did Harley Davidson use to become such a successful organization?

To what extent has Harley Davidson's strategy (or combination of strategies) changed over the years, or been constant?

How does Harley Davidson's strategy (or combination of strategies) "fit" with the environment of the motorcycle industry?

How does Harley Davidson's strategy (or combination of strategies) "fit" with the internal resources and competencies of the firm?

Based on your analysis and findings, what would you recommend to the executives of Harley Davidson Motorcycle Corporation?

Please read the information below and in a 4 to 5 pages report for the executives of HD corporation, please help me by answering the following questions:

Information
Strategic Choices or Alternatives
Strategy formulation takes place at three different levels:
►Corporate Level: Concerned with the selection and management of a portfolio of businesses in which your company should compete.
►Business Level: Concerned with developing and sustaining a competitive advantage for the products/services the business produces.
►Functional Level: Concerned with the development and coordination of resources at the operating level.
Making the right choice strategically at each level of the company is what divides the successful company from the ones who are now in the pages of history.
Making the right choice strategically at each level of the company is what divides the successful company from the ones who are now in the pages of history. In this course, however, we have been focusing mainly on the business level of strategy and we will continue this focus in this module.
In formulating a strategy, which will then influence the day to day choices made by the firm in pursuit of its mission, the organization must:
• Take into account their resources and capabilities
• Accommodate the restrictions and opportunities imposed by the environment
• Integrate knowledge of strategy and organizational architecture
Although companies seem to follow an endless variety of different strategies, in truth, there are only a handful of generic strategies - though the choices of how to implement them may indeed be endless. To learn about the role of the basic four types of strategy in building a competitive advantage read:
Tutor2u.net (2011). Competitive advantage. Retrieved, from: http://www.tutor2u.net/business/strategy/competitive_advantage.htm
The key to organizational viability and growth -- is to stake out a position that is:
• less vulnerable to attack from competitors, both established and new, and
• less vulnerable to erosion from the direction of customers, suppliers, and substitute products/services.

Review the materials from HD's investor web page.
Harley Davidson. (2012). Quick Links (Investor relations page). Retrieved from: http://investor.harley-davidson.com/phoenix.zhtml?c=87981&p=irol-govhighlights&locale=en_US&bmLocale=en_US
The following readings demonstrate the relationship between Porter's generic strategies and the threats from competitors. customers, suppliers, and substitute products.
Quickmba.com (2010). Porter's Generic Strategies. Quick MBA. Retrieved August, 2011, from http://www.quickmba.com/strategy/generic.shtml
Tutor2u.net (2011). Competitive advantage. Retrieved, from: http://www.tutor2u.net/business/strategy/competitive_advantage.htm
Also take review the following document that outlines Harley's alliance with Lehman Trikes:
Looney, D. C., & Ryerson, A. (2011). LEHMAN TRIKES: A STORY WITHIN A STORY. Journal Of The International Academy For Case Studies, 17(7), 45-58. (Available via the Library by way of the EBSCO database).

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