Harley Davidson Case Questions

Harley Davidson Case Questions

Please read the case and answer the following questions. Try to answer the questions as concisely as possible. This case is from 2006 and therefore I would do some research to determine where Harley is today and how it has weathered the economic doom and gloom of the recession. I am interested in your opinions and evaluation as dictated by the following questions. Remember to keep the answers as concise as possible and to the point. I don’t need a thorough retelling of their corporate history.

1.      Historically, how did Harley Davidson (HD) manage to dominate the U.S. market? What were its sources of competitive advantage? HD got into trouble in the 1970’s, what changed both internally and externally?

 

HD motorcycle is part of American iconography and is associated with U.S. flag and the bald eagle.  This association would be unprecedented brand loyalty. This competitive advantage enabled them to sell the motorcycle at higher price.

After Japanese manufacturers accounted for more than 85% of U.S. motorcycle, HD agreed a friendly takeover by AMF and gain capital for changing from niche player to beat Japanese companies.

 

2.      What were the major ingredients of the HD transformation process? What elements seemed to you to be the most important? What is your own personal evaluation of the transformation process?

 

It is admirable that their immediate change of system after HD senior manager visited Honda factory and saw their minimum paperwork and things flowed smoothly. HD actually didn’t have such as just-in-time system but HD found their lacks quickly and tried to change their system and the process is very straightforward.

 

3.      What is Harley’s current source of competitive advantage? If you are Honda, Where do you see HD being vulnerable?

 

Now is the time of appreciating Japanese Yen. This means it is efficient and easy to import HD products into Japan. This is totally HD advantage to sell in Japan. However, there is a risk that Japanese company proceeds into United States.

 

4.      What is the Harley mystique?

 

When Japanese young people use highway and find Harley motorcycle, they always speak “he has money, high sense of philosophy and muscle” in an excited voice. They think the person who rides the motorcycle is perfect man.

The bike can be tinkered. This also can be their attractive point of view from Japanese. The mystique comes from their originality, creativity, novelty. The one of reason why HD succeeded in foreign market such as Japan rather than their country is they think foreign product is rare, quality and high-grade even if it is not true.

 

5.      What are the challenges ahead for Harley in the 21^st century? Do you agree with their current strategy? Do you have any recommendations for HD in terms of their short term and long term strategy?

 

Top management required to consider foreign currency and foreign economics. In this global business era, the two factors are indispensable. The current strategy can be efficient but they need to consider it more global and make risk assessment for global financial incident.