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Harley Davidson Case Solution

Decent Essays

International Management - Class 6 - Year 2010/2011 STRATEGY AS POSITIONING “…the legend rolls on…” Harley Davidson brand operates in three traditional heavyweight markets: Custom, Touring and Sportster motorcycles. Buell operates in all of the sport markets (heavy or lightweight segment). MV Agusta operates in the sport markets (heavy or lightweight segment) in Europe. I would favor a more direct approach. You have been asked to assess the challenges that HD faces. But you begin with a chart that shows several aspects of HD’s business and strategy that does not, on its own, convey very much and lacks any explanation to link it to the possible problems that HD may face. Again, your diagram shows that HD has a v …show more content…

Ducati would solve the previous issues, bringing several advantages: • the actual market trend is rewarding Ducati performance motorcycles, since customers are more interested in untraditional design and technologically advanced features; • Ducati has already settled successful racing teams both in MotoGP and Superbike; • HD would increase its bargaining power with suppliers; • the current excess capacity could be exploited by producing an increasing amount of Ducatis. But why should HD buy Ducati rather than other companies? Ducati and HD present several consistencies: first, both are strongly market focused and developed customers loyalty through the conveyance of a particular lifestyle, the building of a community and the organization of periodic social events. Moreover, they possess high design capabilities. Finally, the committed dealership model of HD could be reproduced within Ducati dealership network. The acquisition seems feasible: Ducati 2007 turnover was € 397 mil, with an € 51 mil EBITDA. HD instead showed greater figures: a $ 5227 mil 2007 turnover and a $1426 mil EBITDA. Furthermore, the main owners of Ducati are investment funds, usually willing to make capital gains through sellouts. Concerning Agusta and Buell, Buell’s and Ducati’s offerings are overlapping. Thus, the investment in Ducati would imply the divestment from Buell; instead, Agusta would remain a high priced and

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