Harley Davidson Case Study

Essay by bkhullUniversity, Master'sA, April 2005

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1. Introduction

Established in 1903, The Harley-Davidson Motorcycle Company has travelled a somewhat rocky road to success. Saved from the brink of bankruptcy by a management buyout in 1981, Harley has succeeded in building a truly global brand that is the envy of its competitors.

Faced with a declining market, a poor economic climate and fierce competition from Japanese manufacturers, the Harley-Davidson Company was forced to re-look at its competitive strategy. The essence of Harley-Davidson's success is rooted in its repositioning strategy, which it undertook shortly after the management buyout. Prior to the buyout, the Harley-Davidson motorcycle was perceived as being an inferior quality product to that of its competitor's. By changing its focus from a product orientation to a marketing orientation, Harley was able to get close to its customers, and by so doing, offer them greater value.

This assignment aims to identify the current and potential issues and problems facing the Harley-Davidson Company, and by so doing, offer some recommendations that can aid in future strategy development.

2. Potential Issues and Problems Facing Harley-Davidson

2.1 Macro-Environmental Analysis

The P.E.S.T.L.E. framework is a useful analytical tool used to gain an understanding of the macro-environmental factors which have impacted Harley-Davidson's business in the past and which will impact the business in the future. Not all the components of the framework are pertinent to this case, however, I will identify the factors, which pose the greatest opportunities or threats to Harley-Davidson.

2.1.1 Economic Factors

Economic factors such as economic growth, interest rates and exchange rates can have a profound effect on strategy development in any organisation. Interest rate levels and economic growth rates determine consumer-spending patterns, especially for luxury items such as motorcycles. A growing economy bodes well for Harley Davidson, but in times of a sagging economy, sales of luxury...