Case study: Harley-Davidson, Inc.: Troubled Times Increases H-D’s Reliance on International Sales.
Summary
Harley-Davidson
has been in the industry of manufacturing luxury goods and motorcycles for over
100 years. Harley Davidson is a legendary brand name in the automotive
industry. Harley Davidson is very well known for its study and well-built premium
bikes. It has proved itself as a constantly growing company in the automotive
industry and has directly affected the business of different automotive
manufacturers.
The company experienced a sharp
decrease in sales in 2008, in part for selling luxury goods during a recession.
The reason is attributed to providing loans and financing to questionable
subjects who failed to pay back. Once H-Ds were used, their off-market value
decreased, contrary to what it used to be since they had always retained their
value. The company layoff over 1500 employees in 2008. The only part keeping
H-D alive was international sales. Thus, this was the focus in the immediate
years after the recession.
Luxury goods are those where demand
increases more than income increases. Thus, demand increases disproportionally
to income in society. There is also subjectivity in the definition of luxury
goods. They are goods that demonstrate a person’s economic situation and power.
North America consumes 25% of luxury goods, Europe consumes 38%, Japan consumes
12%, and China, together with India and Russia, consumes about 3%. The case
study goes on to explain what happens, concerning the global market, in several
parts of the world.
Some of H-D’s competitors include
Ducati Motor Holdings, BMW, Honda, Kawasaki, Suzuki, and Yamaha. H-D has failed
in diversifying its products and market. Their market strategy, as a result of
2008, included investing in H-D brand, restructuring operations and reducing
costs, and obtaining funds.
in H-D brand, restructuring
operations and reducing cost, and obtaining funds.
Questions
1. Which of Porter’s generic
strategies is H-D using? Will this strategy work for all of the countries
described in the case? Why or why not?
1. Cost Leadership
a) “Increasing profits by
reducing costs while charging average prices of the industry”
(“Solved: Which of Porter’s generic strategies is H-D using? Will the
…”)
b) Increasing market share by charging
lower costs while still gaining profits as the firm has reduced costs.
2. Differentiation
a) R&D and Innovation
b) High-Quality Product and Services
c) Effective sales and marketing to
promote the differentiation
3. Focus – Cost Focus and
Differentiation Focus
a) Center technique is essentially the
expansion of a bonus to serve market specialty. Cost centers should be possible
by having exceptional providers, and separation centers can be accomplished by
factors like profound comprehension of the clients and their necessities.
HD, as an organization, is carrying
out the Differentiation Focus technique among the watchman’s systems. The
organization centers around the heavyweight market with clients who consider
their bikes an extravagance item. It gives clients test drives, club exercises,
and so forth to chip away at their methodology.
The nations focused on by HD are
primarily in the United States, parts of Europe, Japan, China, India…. HD is
the market chief in the US, as the explanation of extravagance and
extraordinary heavyweight cruisers is acknowledged in US plentifully.
The European market has not
acknowledged the HD picture, as they trust in execution instead of an
extravagance picture. Procurement of MV Augusta is assisting HD with expanding
their piece of the pie in Europe, however, Ducati and BMW are extreme contenders.
In China, India and Japan, the nation
principles and individuals favor bicycles under 500cc, and subsequently HD has
a somewhat low piece of the pie in these pieces of Asia. On the other hand,
Australia and New Zealand are great Markets for HD as the nation scenes suit
the picture of a HD bicycle.
Subsequently, HD’s current procedure
will not be of much good in every one of the world nations as the extravagance
heavyweight cruiser fragment as an item methodology isn’t acknowledged by all
classes and societies of individuals. HD necessities to move its emphasis in
light of various nations and requirements (Cullen & Parboteeah, 2014).
2. What does Porter’s five forces
analysis reveal about the strategies H-D has employed in recent years?
In industry, for example, bikes,
client faithfulness is so significant; hence the blasting force of the
purchaser should stay set up to the fact of the matter where they believe they
are getting the precisely exact thing they need as is the organization. The
opposition is enormous to such an extent that the substitute items and serious
contention remain closely connected. Taking a gander at the European market,
H-D is going toward the force to be reckoned with of Ducati as a substitute and
should keep up with the quality that buyers hope to see with the H-D name. In
the Asian business sectors, the opposition is gigantic, Honda, Kawasaki, and
Suzuki rule the market for a much lower cost, giving H-D a troublesome
undertaking of offering worth to customers who appreciate low cost and sound
setups. India’s market is hard in the first place for H-D as most motorbikes
are under 250cc and the limitations on emanation are severe for anything over
500cc, which gets down on basically substituting items as H-D fights the public
authority for lesser limitations (Cullen & Parboteeah, 2014).
3. How does H-D compare to its
competitors?
Rivalry in the heavyweight bike market
depends on a number, including cost, quality, dependability, styling, the item
includes client inclination, and guarantees. The European market is troublesome
for H-D, and the organization’s piece of the pie floats around 101%. The market
is appealing, in any case, since European heavyweight cruiser deals are 83% of
those in the U.S. market. In contrast to the U.S. market, the H-D picture and
wistfulness do not sell many bicycles in Europe. Over two-thirds of the
European market is contained execution bicycles, a market fragment in which the
conventional H-D contributions are not cutthroat. As I would like to think H-D
should change with the contenders. At the point when the needs of the buyers
change, organizations should change with it. They will keep missing out if they
don’t change their bike units to meet the styles of organizations like Honda (Cullen
& Parboteeah, 2014).
Recommendations
Recommendations rely on H-D’s
economical and strategic planning. Harley-Davidson applies partition as its
customary framework for advantage.
Novel thing incorporates are the focal
matter in this nonexclusive procedure. For example, Harley-Davidson supported
the chopper bicycle style through unique customization. Remarkable thing
advancement help HD with building advantage.
A fundamental objective associated
with the division regular framework is to manufacture Harley-Davidson’s
advantage considering remarkable thing advancement Harley-Davidson, offers
included cost power that might be of some value for another cruiser thing than
their adversaries and has overpowered the market with a very ardent following
of Harley bikers (Cullen & Parboteeah, 2014).
Wal-Mart is another representation of
this thought. They have made their assignments so capable and assembled such a
large scattering network that they can get better assessing of products and
offer them to purchasers for not precisely various retailers. For example, a
Lego set at Wal-Mart could sell for 10%, not precisely a comparative set at
Target. Walmart’s overall strategy is cost drive. They aim to attract the most
significant number of clients while giving the most decreased cost available
item. They have been suitable in doing as, for example, they partake in the
cash saving benefit, control their expense drivers, and constantly search
efficiencies out of their creation organizat
Conclusions
Harley Davidson has a substantial
operational area, operating from the most developing countries of the world to
the least developing countries, consistently implementing strategies to the new
market. In creating market-friendly motorbikes countries, this company has
generated significant revenue and provided benefits to the company.
By having operational flexibility
across the different cultures and the market, Harley Davidson has changed its
product types according to the market related to product flexibility and
implemented the overall flexibility in its organization to provide better sales
and service.
In addition, by implementing new
technologies into the system, Harley Davidson has a competitive advantage over
its competitors, directly enabled by analytical marketing.
References
Cullen,
J.B., & Parboteeah, K.P. (2014). Multinational management: A strategic
approach(6th ed.). Mason, OH: South-Western
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