Harley Davidson Strategy
1.0 Executive Summary
Harley-Davidson is a company that despite enjoying nearly 15 years of being a leader in the market place and capitalizing on strong sales growth, find themselves reevaluating their overall strategy. The analysis below goes through the each level of the market-place to determine where, what and how change can take place. At the industry level, it is clear that the mature product life cycle necessitates stronger price competition, further expansion into foreign markets and more diversification of their product-lines. Next at the firm-level, Harley-Davidson needs to continue to capitalize on their strengths like brand equity and supplier relationships, focus on their value adding functional-level practices like quality management and finally, begin to see weaknesses such as high-price sensitivity and narrowly defined target markets as an opportunity to creatively tap into unexploited demographics markets such as women and consider challenging their premium price strategy, if even for brief time. To achieve the corporate-level objective of increasing international sales it is vital that continue to explore markets that can economically support premium priced, luxury products, are politically stable and friendly to foreign investment from the United States. Since this is a tall order for many viable countries, Harley Davidson must be willing to challenge their deeply entrenched status-quos. This will mean lifting off-shore shipment limits and letting go of the reluctance to move motorcycle assembly abroad.
2.0 Problems
2.1 Slowing Domestic Growth
Despite domestic market leadership for the past 17 years and a market share increase of 9% from 2001-2005, Harley-Davidson was experiencing a slowdown in domestic growth. The unit sales growth rate was at 14% in 2001 however by 2005 it had dropped to 2%. Luxury heavyweight motorcycles are rarely sold as primary means of transportation which means sales are susceptible to economic
Harley-Davidson is a company that despite enjoying nearly 15 years of being a leader in the market place and capitalizing on strong sales growth, find themselves reevaluating their overall strategy. The analysis below goes through the each level of the market-place to determine where, what and how change can take place. At the industry level, it is clear that the mature product life cycle necessitates stronger price competition, further expansion into foreign markets and more diversification of their product-lines. Next at the firm-level, Harley-Davidson needs to continue to capitalize on their strengths like brand equity and supplier relationships, focus on their value adding functional-level practices like quality management and finally, begin to see weaknesses such as high-price sensitivity and narrowly defined target markets as an opportunity to creatively tap into unexploited demographics markets such as women and consider challenging their premium price strategy, if even for brief time. To achieve the corporate-level objective of increasing international sales it is vital that continue to explore markets that can economically support premium priced, luxury products, are politically stable and friendly to foreign investment from the United States. Since this is a tall order for many viable countries, Harley Davidson must be willing to challenge their deeply entrenched status-quos. This will mean lifting off-shore shipment limits and letting go of the reluctance to move motorcycle assembly abroad.
2.0 Problems
2.1 Slowing Domestic Growth
Despite domestic market leadership for the past 17 years and a market share increase of 9% from 2001-2005, Harley-Davidson was experiencing a slowdown in domestic growth. The unit sales growth rate was at 14% in 2001 however by 2005 it had dropped to 2%. Luxury heavyweight motorcycles are rarely sold as primary means of transportation which means sales are susceptible to economic