Harley Davidson Case Study

2678 Words Mar 30th, 2005 11 Pages
1. Introduction

Established in 1903, The Harley-Davidson Motorcycle Company has travelled a somewhat rocky road to success. Saved from the brink of bankruptcy by a management buyout in 1981, Harley has succeeded in building a truly global brand that is the envy of its competitors.

Faced with a declining market, a poor economic climate and fierce competition from Japanese manufacturers, the Harley-Davidson Company was forced to re-look at its competitive strategy. The essence of Harley-Davidson's success is rooted in its repositioning strategy, which it undertook shortly after the management buyout. Prior to the buyout, the Harley-Davidson motorcycle was perceived as being an inferior quality product to that of its competitor's. By
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Lastly, brand loyalty reduces the threat of rivalry in a market (Porter, 1979).

A key issue for the leadership of Harley-Davidson is whether the strength of the Harley-Davidson brand will continue to grow, especially in global markets. Further, do global customers, view the brand simply as another symbol of American culture, or do they see Harley-Davidson as a truly global brand?

2.3 Harley-Davidson's Generic Strategy

Faced with increasing competition and an erosion of their market share in the early 1980s, Harley Davidson had to rethink its marketing strategy. Harley-Davidson had always tried to achieve its competitive advantage by positioning itself as, what Michael Porter would call, a focused differentiator in the motorcycle market. A focused differentiation strategy targets a segment or limited number of segments in the market with a unique product, or service features, which persuades customers that it is superior to competitor's offerings (Porter).

The characteristics of Harley-Davidson's differentiation strategy are as follows:

The company only chose to compete in the "heavyweight" motorcycle segment. The heavyweight segment consists of motorcycles with engine sizes greater than 650 cc.

Harley-Davidson's target customers, as mentioned above, are baby boomers, particularly older males, of above average income, and not necessarily motorcycling enthusiasts. Speed and superior performance were not seen as

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