Harley Davidson: Preparing for the Next Century

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NATURE OF THE SITUATION Harley Davidson (HD) sales have endured a roller-coaster history of growth and decline since its start in 1903. From extreme growth in its initial years, to declines during WWII, HD made its come back with larger, more powerful bikes and its image of “raw power” and enjoyed a 60% market share. Its popularity soared to iconic level in the 1950’s and became a lifestyle with unique brand loyalty. New, Japanese competitors, in particular Honda moved the market towards a smaller, quieter, less expensive bike; and by 1965, Honda represented half of all bike sales. HD employed every technique to raise capital from going public in 1965, to selling to AMF, to selling back to the employee group, and to once again…show more content…
In the past, HD has not consistently taken a customer-led approach; but has learned from its mistakes. For example, when the market wanted sleeker, light weight, performance bikes, HD made no technological improvements or changes to its designs; consequently, competitors entered the market and eroded HD’s market share. Another example was HD’s hesitation to change its design and develop a high performance motorcycle until its V-rod in 2001. This reluctance to respond to a target market segment’s desires put HD behind its competitors. HD has attracted younger riders and women across various demographics, and will need to push its advertisement to these segments even more. When Japanese competitors began targeting the performance segment, they employed high advertising expenditures to attract the segment. Similarly, HD will need to invest heavily in advertising to this segment in order to overcome their traditional “raw power” image and to combat the brand’s association with the older generation which can deter a younger customer. Overall, HD will need to remain in touch with all of its target market segments in order to gather continuous information on what segments desire in a motorcycle and from HD. In gathering more information, HD can better understand customers’ purchasing behavior and post-purchasing behavior. HD’s traditional market segment is greatly

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