Harley Davidson Essay

6. Outline the potential pros and cons of the 3 key strategies for developing foreign markets: exporting, licensing and franchising, and direct investment.

Harley-Davidson, Inc. (NYSE:HOG) was founded in 1903. The home base was originally founded in and even today remains in Milwaukee Wisconsin. Harley-Davidson’s popularity grew significantly during World War I, when the U.S. infantry used 20,000 of the company’s motorcycles in its war effort (Taylor, 2010). Best recognized for its manufacturing of heavyweight motorcycles, Harley-Davidson has captured half the U.S. market and a third of the global market (Wikinvest, 2010). Harley-Davidson motorcycles are noted for their classic lines, custom paint jobs, dependability, fine craftsmanship and the Harley-Davidson signature choppy sounding engine. Most importantly, it has been

Currently H-D is the leading seller of heavy weight motorcycles across the entire world. Because they are at the pinnacle they are the target for the competition. Some of Harley Davidson 's advantages are name recognition, brand loyalty, brand quality and customer loyalty (Hitt, Ireland & Hoskisson, 2013, p. 81). The company benefits by having “the made in America” image attached to its products. The image of a Harley rider and owner is one of a tough, independent, free spirit, ready and willing to take on the world type of man. The sound of a H-D motorcycle in idle or being ridden is unique and very identifiable.

Some driving forces in the motorcycle industry include a general income increase in such emerging markets as China, India, and Southeast Asia. Consumers in these markets prefer performance bikes which typically are more cost-friendly than Harley-Davidson bikes. Due

There are many things that would prevent an American company to outsource to these countries but one of the main ones is that it would simply be cheaper to produce it in America. There are many products that are just easier and more cost efficient to produce here instead of in a foreign nation. Another reason that could prevent an American company from outsourcing with a foreign country are tariffs and taxes.

1. Compare the advantages and disadvantages of acquiring the existing firm, and continuing production in Korea through acquisition for Zip-6.

International sell and purchase has provided tremendous growth for countries. There are advantages and disadvantages to sourcing overseas. Some of the common advantages to out sourcing overseas are low manufacturing cost and expertise of products (importcrashcourse.com). The disadvantages are language barriers, shipping time, as well as quality of products in some cases. Americans have found comfort in everyday life regarding products that were made in other countries. If Americans were to suddenly not be able to purchase products overseas they may find themselves at a lost for living a typical lifestyle.

Mixed Financial Profile. Harley’s financial picture between 1986 and 2007 was nothing short of extraordinary but the recession in 2008 adversely impacted the motorcycle market. Going into a detailed financial review is outside the scope of this paper but a review of Harley’s key financial ratios against industry averages indicates mixed results. Growth Rate data shows unfavorable comparisons: 5-year averages for growth rates in sales, net income and dividends paid; all are unfavorable in the Leverage area: Debt-to-Equity ratio, Current ratio, Quick ratio and Interest Coverage; there is a mix in the Equity area: Price-to-Sales is unfavorable, while Current Price-to-Earnings, Price-to-Cash Flow ratio and Price-to-Book are favorable. All indicators are unfavorable in the Profitability area: Return on Equity, Return on Assets and Return on Capital are significantly below industrial averages; and, a mix is found in

According to me, the motorcycle industry is very attractive. The main reason to back my claim is the level of competition in the industry. There is a very high level of completion between all the companies present in this particular segment. The main factors that drive this rivalry are different positions of different players within the industry, differences in technical know-how, different marketing campaigns, differences in core nature of the products and differences in strategies. The players in this particular industry don’t fight over price of their products, they rather compete with each other in terms quality of their products and the nature of their services to different segments of customers. Each player had its own unique strategy and nature of the product for a particular segment of customers, this tends to intensify the competition amongst companies in the industry.

1. IF you were CEO of Harley Davidson, How would you compare the advantages and disadvantages of using exports, joint ventures, and foreign subsidiaries as ways of expanding international sales?

Historically, how did Harley‐Davidson manage to dominate the US market? How did it do so and what were its sources of competitive advantage?

Historically, Harley-Davidson has managed to dominate the U.S. market by becoming a staple of American culture. Specifically, the Harley-Davidson motorcycle is considered “a part of American iconography” and is typically associated with well-known American symbols, including both the U.S. flag and the bald eagle. As a direct result of this association, the company has achieved strong and long-lasting brand loyalty among U.S. customers, which has undoubtedly contributed to its great success in the U.S. market.

After an investigation by the US International Trade Commission, in 1983 President Reagan imposed a 45% tariff on imported bikes and bikes over 700 cc engine capacity. The new management deliberately exploited the past appeal of their big machines, building motorcycles that purposely adopted the look and feel of their earlier models. Quality increased, technical improvements were made, and buyers returned. Harley-Davidson once again became the sales leader in the heavyweight (over 750 cc) market.

B. Discuss the advantages and disadvantages of sourcing from suppliers located overseas. Which do you think make for a more compelling argument -- the advantages or the

The best reason for exporting a product or service is to globalize your company and prosper in the millennium. It can happen for you, but you will probably need to evolve a whole new set of business attitudes and assumptions. If you want to achieve success with your export sales efforts, then check yourself on whether you are currently committing the following ten mistakes to global sales failure: