Harley Davidson SWAT
HARLEY DAVIDSON CASE ANALYSIS
GLOBAL STRATEGY & POLICY MAN 4720
INTRODUCTION
For over a century, Harley Davidson has excelled in providing consumers with distinctive style and outstanding quality. The motorcycle industry is a consolidated industry where they have high barriers to entry, differentiated products, well established brands and high profit margins. In my opinion, Harley Davidson maintained its competitive advantage by following the generic competitive strategy model of differentiation. The reason why I think Harley Davidson is following this strategy is because of the company’s ability to endlessly improve its dealer relationships, customer loyalty and product diversification. The thing that I found most interesting about Harley Davidson is how they market to consumers who really love the product. To maintain and build strong loyalty among customers, the company formed an owners’ club that is staffed by Harley personnel and financed by company funds. Every buyer receives a free membership for a year to the club plus a subscription to a bimonthly magazine covering upcoming events, and promoting new Harley products and accessories. Simultaneously, it keeps the company close to its customer and maintains a data base for future marketing needs.
STRENGTHS
Harley Davidson had a net income of $761mm in 2003, which is 30% more compared to the previous year 2002.1 Their net profit margins have continued to increase since from 1998 through 2004. This is an example of one of Harley Davidson’s tangible resources.
WEAKNESSES
The company is having difficulty gaining more market shares in European countries. If Harley Davidson can continue to be cost effective and innovative in the American market and gain more customer loyalty and pricing advantages internationally, they can continue to reap large domestic profits and expand their global market saturation.
OPPORTUNITIES
The opportunities for Harley-Davidson are ever-present
GLOBAL STRATEGY & POLICY MAN 4720
INTRODUCTION
For over a century, Harley Davidson has excelled in providing consumers with distinctive style and outstanding quality. The motorcycle industry is a consolidated industry where they have high barriers to entry, differentiated products, well established brands and high profit margins. In my opinion, Harley Davidson maintained its competitive advantage by following the generic competitive strategy model of differentiation. The reason why I think Harley Davidson is following this strategy is because of the company’s ability to endlessly improve its dealer relationships, customer loyalty and product diversification. The thing that I found most interesting about Harley Davidson is how they market to consumers who really love the product. To maintain and build strong loyalty among customers, the company formed an owners’ club that is staffed by Harley personnel and financed by company funds. Every buyer receives a free membership for a year to the club plus a subscription to a bimonthly magazine covering upcoming events, and promoting new Harley products and accessories. Simultaneously, it keeps the company close to its customer and maintains a data base for future marketing needs.
STRENGTHS
Harley Davidson had a net income of $761mm in 2003, which is 30% more compared to the previous year 2002.1 Their net profit margins have continued to increase since from 1998 through 2004. This is an example of one of Harley Davidson’s tangible resources.
WEAKNESSES
The company is having difficulty gaining more market shares in European countries. If Harley Davidson can continue to be cost effective and innovative in the American market and gain more customer loyalty and pricing advantages internationally, they can continue to reap large domestic profits and expand their global market saturation.
OPPORTUNITIES
The opportunities for Harley-Davidson are ever-present