Harley Davidson: Strategic Competitiveness That Spans Decades

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Objective ...............................................................................................................................22

Alternatives ..................................................................................................................................................................23

Alternative 1: Build the Image...............................................................................................23 Alternative 2: Tourist Attraction............................................................................................24 Alternative 3: Strategic Alliance............................................................................................25

Recommendation.......................................................................................................................................................26 Action Plan ....................................................................................................................................................................28

Corporate Level......................................................................................................................28 Business Level .......................................................................................................................29

Concept of Implement Strategy..............................................................................................30 External Involvement..............................................................................................................31 Internal Involvement...............................................................................................................32 Marketing Action Plan ...........................................................................................................33

Strategy Timeline....................................................................................................................35

Gantt chart...............................................................................................................................36

Contingency Plan....................................................................................................................37

Situation Analysis

Current Situation

Harley-Davidson Motor Company was founded by William S. Harley and Arthur Davison in 1903. The first Harley-Davidson success was its first motorcycle, which were the contemporary bicycles with small engines retrofitted to the frame in 1904. Later on, during the World War II, Harley-Davidson dedicated its production to the U.S. Army which results in the loyal customer base from the soldiers. It was taken over by the American Machine and Foundry (AMF) ‘[in 1969. The reduction in sales was representative of a poor level of quality in the Harley bike compared to their Japanese counterpart. In 1985, CEO Richard Teerlink convinced lenders to accept a restructuring plan. Using management principles adopted from the Japanese, new marketing strategies, and manufacturing techniques, Harley improved quality and began the long battle to regain its market share. In 1987, Harley-Davidson become publicly traded company, this is the turning point of the company where the firm focused more on efforts to operate efficiently and effectively. Harley shifted to three major initiatives: improved manufacturing process, restructuring business management to a modern system. and aggressive management of its brand name through dealership management.

At the present, Harley has continued to invest in its products to protect the quality of its brand image. The company operates in both domestics and international markets. It has over 1,500 dealers worldwide in 30 countries. Therefore, the U.S. competitors does not affect Harley’s market share, and the firm still hold the primary position and sales volume in the U.S. market. Harley-Davidson could not hold significant market share and high amount of sales volume in the international market compared to its international competitors such as Honda, Yamaha, and Suzuki which hold the larger market share than Harley. Due to the fact that competitor of Harley-Davidson's base outside the United States where it has greater financial and marketing resources of the international marketplace.

Harley-Davidson’s market focus primarily on males age between 29 to 55. However, the firm has targeted female customers as a new target customers, and also the baby boomers as the current target customer of Harley is “greying” which are their repeat customers tend to purchase less on the new product. Hence, in order to capture the new target market, the company has to improve quality aggressively Harley continues to hold a dominant share of the heavyweight motorcycle market, but competitors with feasible substitutes have the potential to erode this dominant position if expansion efforts prove faulty. The company’s transportation vehicles segment continues to struggle to keep up with the industry main competitors, and has seen its market share shrink over the past five years.

Marketing Portfolio (4ps)

Place

Harley Davidson distributes it product through dealer that almost exclusively sells Harley Davidson motorcycles. Dealerships are licensed and fully authorized to sell and service new motorcycles. Some company’s dealer have their own secondary location to provide additional service to customers. These secondary location are called Alternate Retail Outlets (ARO) and Seasonal Retail Outlets (SRO). ARO usually located in high traffic area such as airports, vacation destinations, tourism spots, or malls. These shop usually sell just parts, accessories, and general merchandise. Similarly, SRO are also located in high traffic area but only operate on seasonal basis. Both type of outlet are not able to sell new bikes. Lastly, the company also featured its product in yearly auto shows around the world.

Promotion

The company currently uses advertising and promotional activities such as television, print, and radio direct mailings. Recently, the company focuses more on electronic advertising and social media to market its product due to higher popularity. According to research, 30 percent of marketing budgets come from advertising in movie, 40 percent in TV commercial, 10 percent from print ads, and 20 percent from events targeted toward “Young Influentials”