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Harley Davidson 2008 Case Study

Autor:   •  March 20, 2014  •  Case Study  •  1,005 Words (5 Pages)  •  1,032 Views

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After management buyout of Harley Davidson in 1981, Harley’s output and revenue had grown every single year until financial crisis of 2008 after which Keith Wandell was appointed as new CEO in 2009.

So key issue, which Keith faced, was company’s declining sales due to financial crisis.

So therefore, Keith Wandell had to deal with high debt, declining sales and excess inventory.

To overcome this, restructuring of manufacturing options and transformation of its product development system was required to build its distribution and grow sales in emerging markets of Asia, Latin America and Europe.

But as the company chose to compete only in the “heavyweight” motorcycle segment above 850 cc, the only option was to keep expanding its high priced heavy weight motorcycles. Harley Davidson’s targeted customers were married male in late forties and as Harley’s style was originated from American culture, this strategy could only work in US (USA Today, 1998)

So it was very difficult to expand Harley as dominance in International market and emerging markets. Moreover Harley’s own US dominance was under threat due to many new Japanese companies, which offered same class bikes with superior technology and at a less price.

2.Analysis:

Harley Davidson was established in 1903 and since then company saw a lot of up’s and down’s on its road to success.

After the management buyout in 1981,Harley has succeeded in increase its revenue and sales every year until financial crisis in year 2008.

So overcoming with declining market and a tough competition offered from Japanese markets, Harley Davidson was forced to rethink its competitive strategy.

Porter’s fiver forces competition framework analysis (Porter, 2008):

Bargaining power of suppliers:

Harley’s brand image and experience is biggest asset of the company. Harley gives its customer a different lifestyle image and experience due to which Harley can sell its heavy weight motorcycles at high price.

Bargaining power of buyers:

Due to its very narrow market focus, only educated and upper class can afford Harley bikes, so the rest of the majority of the rest market segment will focus on a cheaper product.

Threat of entrants:

Harley has many tough competitors which can be high threat of Harley in it’s own market focus of high priced heavy weight bikes.

As other competitors like BMW, Honda, Yamaha also have a high brand image and these competitors much advanced technological expertise and high production volume.

Threat

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