Harley Davidson

2736 Words Jan 4th, 2004 11 Pages
Identification of Harley-Davidson's strategy and its rationale explaining its resources and capabilities. After that i compare these to those of Honda. Wfat does my analysis imply for Harley's potential to establish cost and differentiation advantage over Honda. Knowing that, what threats does Harley face? And then how Harley can sustain and enhance its competitive advantage?

Question 1: Identify Harley-Davidson's strategy and explain its rationale.

The fundamentals of the Harley-Davidson business strategy turn around three main points: The products, the relationship between the company and consumers, and the distribution network.

First of all, before I explain these three policies, we can try to see what was the problem that
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They also had to carry out a full line of Harley replacement parts and accessories, and to perform services on Harley bikes. So, the improvement in network distribution leaded to higher demand that outstripped supply.

Question 2: Compare Harley-Davidson resources and capabilities to those of Honda. What does your analysis imply for Harley's potential to establish cost differentiation advantage over Honda?

First of all, we can do a table dividing resources and capabilities of each company.

HARLEY HONDA

Resources:- Since 1903- Domination in heavy and super-heavyweight segment (cruiser and touring bikes) focused in US market- 620 US dealers (exclusivity)- Poor technology advances, not diversified, cannot share technology- Property and equipment: $627.8 million (1998)- LT debt: $280.0 million (1998) Capabilities:- Smaller volume of bikes, low production capacity- Local advertising and promotion- Difficulties to access economies of scale, low bargaining power- International expansion (Latin America, Asia, Europe)- Sales: $2,064 million (1998)- Prices: between $5,500 and $19,000 Resources:- Since 1947- Entered US market in 1959- Performance and touring bikes segment- Go directly to retailers, largest dealership network in the US.- Diversified (automobiles) so share technology- Property and equipment: $ 8,811.4 million (1998)- LT debt: $5,130.6 million (1998) Capabilities:- Larger motorcycle manufacturer,

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