Strategic management analysis report on: report on Harley Davidson strategy
Abstract
The paper comprises of different sections effectively focused on two brands known as Harley Davidson and Honda.
Both of the company’s strategies is discussed in the below sections in the different parts. In the first part, it discussed about the Harley Davidson strategy.
In the next section, paper talks about the comparative analysis and in the later paragraphs, it discusses about the threats as well as enhancement of competitive edge with regards to Harley Davidson.
Thus at the end, the paper concludes the important points with proper recommendations.
Introduction
Harley Davidson is known as the financially stable and the strong company, the growth of the company decreased with respect to past several years in the company. Harley Davidson spent a lot of amount in research and development so as it is boosting the financial performance today. The company was established in the year 1903 and William Harley as well as Arthur Davidson made it available to the company. By the year 1920, the company was recognized as the most important and the largest motorcycle manufacturer in the world. It was supported by not less than 2000 dealers and in not less than 67 countries. For the next 46 important years, the company was known as the American manufacturer of heavyweight motorcycles.
The company upgraded its production facilities and opened the new plant in the country such as Pennsylvania. They expanded in the year 1992 and opened the new manufacturing facilities in the town. The company improved a lot in terms of business and supported the military during the world wars. They have also become the American icon and they were well known for the American machine and Foundation Company and they were also well known about the products manufacturer. Harley Davidson remained dominant in the heavyweight motorcycle industry. The company maintained the market share of about 50% for heavyweight motorcycles and they were the only motor cycle manufacturer on motorcycles. The other important players such as Honda, Yamaha and Suzuki arrived in the industry to grow their futures.
The major statement of the company is to fulfill the dreams with experience and providing the motorcyclists to the general public with strong networks of expansion. Thus Harley Davidson is an action oriented and international company that helps to commit the continuous improvement to the mutually beneficial relationships with stakeholders, employees, customers and society. They use to believe the key success that is to balance the interests of the stakeholders and to empower the focus on the employees with respect to value added activities.
The mission of the company is to become the best motorcycle brand company in the world. The best motorcycle will be provided by the company with strong commitment and other important services. Customer satisfaction is the major goal and this helps to experience the taste of reality in terms of motorcycle with respect to satisfaction. Harley Davidson is dedicated to the use of advanced and high technology to produce and to deliver the most superior motorcycles in the domestic so as the international market. The company stays competitive and continues its growth with the best survival and profitable business. This way, the company has been dedicated to the use of advanced technology so as to deal with the importance of customer satisfaction. Thus the employees were the major foundations of the company and they were the driving forces behind the name of the company. They were competitive and were continuing with their growth and profits. The major foundations of the company were the employees and the effort of the total team was devoted to the fulfilling of dreams so as the excellence created the superior quality in the company. Honesty and customer loyalty were the important morals of the heartbeat of the company. This supports the environmental laws and determined the commitment for the stay. (Melief 2006)
- Harley Davidson strategy
To analyze the strategy in the proper terms, the company dealt with certain factors that will be explained with the help of five forces analysis in the below sections:-
Harley Davidson is one of the important and the most admired as well as recognized companies in the world today. The company introduced more than 1000 aspiring motorcyclists to the sports industry in the year 2000 and it is known as one of the major manufacturer of V-engine configuration. It carries the wide variety of products with respect to the performance, its standards and tourism as well as custom. It faces challenge in some legal problems in Asian countries but in India, the company carries 60% of tariff and other taxes. Thus the noise pollution and other emission standards of Harley Davidson deal with the level of countries across the globe.
Five forces:-
Internal rivalry: The market for heavyweight motorcycles is concentrated on the basis of four major firms such as Honda, Suzuki, Yamaha and all the companies of Japan. The company had increased in its growth of sales twice over the last fifteen to twenty years but today the market is maturing for the company and it is assumed by the experts that the market will decrease its growth in the sales. Thus Harley Davidson traditionally has become the dominant market player in the market with the strong market share. Honda has been the major competitor in the same market and Harley Davidson is heavily relying upon its brand and they are trying to maintain the strong base of the customers. Honda has really become the major internal rivalry for the company with its improved strategies in the products. (Itami 2007)
Potential entrants: There are high barriers of entry in this segment and it requires lot of investment and capital for the industry. There are significant increases in the economies of scale for the better production and capital requirements with the help of extremely high and in the small scale. There are four main competitors in the industry and the whole business is dependent on high reputation so as it appeals to better enthusiasm and is completely dependent on the focus of custom bikes. There is some scale segments that produces the custom made motor cycles and it increasingly creates the interest of the general public.
Substitutes: The heavyweight motorcycles are the luxury items that create the vast majority and increase in the few close substitutes with serious affect in the market. Honda, Yamaha and Suzuki are also the small manufacturers which are the closest substitutes by the passenger cars and scooter bikes. They were the most important heavyweight motorcycle and were not seriously considered the important options. Passenger cars are weak substitutes that rarely are purchased by the consumers to satisfy the requirements of the transportation. In India, the major substitute product is Enfield.
Power of supplier and buyers: The Company operates in every stage of the motorcycle production. It deals with the raw materials like steel, basic electrical components and extensive independent dealership network. There are many suppliers of the inputs that matches the manufacturing operations that is very little than the single supplier can exist in the market. If there is only one supplier, it increases the profits of high price and it would not be difficult with respect to significant disruption in the production. The wide span of suppliers creates the increase in the price rate and they can easily move to the alternate suppliers without any production related problem. On the same side, the customers of the company are largely the individual customers and they make it difficult for the financial situation of the company. It also creates the bad situations for the dealers. Thus the consumers are individual and this cannot affect the financial position of the company.
- Comparison of Harley Davidson’s resources and capabilities with respect to Honda:-
Honda motor company is the world’s biggest motorcycle producer and it is also known as the lead supplier of the automobiles. It was founded in the year 1948 and the strategy was built around the expertise of development in the manufacture and the production capabilities. This successfully creates the capability of wide range of products. Both the companies have similar resources and these resources were developed and exploited with respect to its strengths and importance so as it also provides the competitive advantage. Honda managed to develop the use of resources in the form of perfection and it is more advanced with the terms of technology so as it is not restrained and restricted with the low budget with limited amount of capital. With respect to finances, Harley Davidson is limited and Honda possesses the financial strengths with the high capability to deal with heavy and strong investments. Honda focuses on modern plants and equipments so as Harley Davidson deals with few plants. The location of Harley Davidson are associated in U.S, Brazil and Honda on the other side deals with the low cost markets and invest in the plants throughout the whole world. Honda focuses on advanced technology whereas Harley Davidson is behind the strategies of Honda. There is strong reputation and brand image of Harley Davidson whereas Honda focuses on affordable bikes with proper brand image and reputation. There are highly trained and skilled work force in the company known as Honda and the company invested highly in human resources. (Teerlink 1996)
With respect to capabilities, Honda was far ahead of Harley and with respect to low cost production, innovation and attractive designs of motorcycles, Honda created the excellent product development and low cost manufacturing capabilities. The heavy investment in research and development strategically develop the demand and make the name of the global company. This also helps to develop the strategy to ensure the greatest effect of resources and the new product development. When compared to Honda and Harley Davidson’s resources and capabilities, the product development and design of Harley Davidson is weak whereas Honda focuses on the product innovation and design. The engineering operations of Honda possess the core technical strength so as Harley Davidson deals with the weak technical strength. When compared to the research and development, Harley Davidson is weak with regards to Honda and Honda focuses on strong research and development so as it meets with the innovative and fast cycle new product development. The marketing of Harley Davidson deals with excellent brand management and reputation with regards to excellent customer service and Honda meets the customer demands and trends successfully.
There are certain important parameters that will help to understand the analysis in the deeper manner such as:-
The economies of scale: Harley Davidson ships less than the third of a million motorcycles every year whereas Honda’s sale is very wide.
Technology: Harley is not just the manufacturers of motorcycle but does the successful business and Harley possess the huge experience in the automobile industry. It is known as the world’s largest leader of automobile with superior technology and innovations but Honda is the first mover advantage. (Capello 2012)
The cost and differentiation analysis: Harley is not able to obtain high amount of cost advantages over Honda and it is differentiated successfully from its competitors. Harley offers the unique and styling products and is the major part in the American culture. The company is able to sustain the differentiation focus on the geographical advantage and other competitors. Thus there is 50% market share for the super and the heavy weight motor cycles market segment. (Grant 2001)
Threats
With respect to continued success, the threats might have been faced by the company is as follows below:-
Population of aging: Harley has been the American baby boomers for the past two decades and they will not at all be the target group. The future of Harley does not look bright and attractive if its target group is the younger customers because through this strategy, it won’t be able to attract the target group. (Ufl.edu 2012)
The competition is very huge and intense thus Harley broadens its market and the company was established in the segment of heavy weight so they entered the performance of the motorcycles. Harley still lacks the economy of scale to compete the major manufacturer known as Honda. With the help of superior technology, the company has become able to increase its brand name and reputation and also it decreased the cost strategy for retaining the customers.
Honda can easily implement the aggressive marketing plan and could introduce the pricing wars with regards to market shares obtained by Harley.
Thus Harley is more of a statement that creates the desire to ride and they can develop the new products and technologies with the help of proper trends. (Jenkinson 2005)
- Competitive advantage enhancement
The company can be able to sustain and enhance the competitive position with certain aspects and strategies such as:-
The development internationally needs to penetrate the company with respect to international market and Harley also is required to reinvest its profits from North America into the marketing overseas. Harley could also deal with large number of scales to bring the more audience for the products and to gain high economy of scale. The demand of its products is really high so there is the way that could go with bringing the new products for the company. New focus and new ways of research and development will also help to gain the competitive edge. Harley will meet the needs of the customers with respect to art and technology thus there will be proper analysis of achievement with respect to the partnering automobile segments such as GM or Ford. This will help the company to maintain its image and also it will increase the development of the models by the international market. This is highly dependent on the market on the basis of increase in overseas. The restructuring and downsizing deals with the less overheads and it needs to become the more nimble in terms of organization. Harley will do great and will increase the sales as well market reputation with respect to financial bottom line and also with the help of better technologies and department. Thus it will help to meet the top management in a simultaneous manner so as it will increase also the no layoff policy. This will create the parts of outsourcing with respect to reduction in the overheads and through this approach, the company will be able to sustain and enhance its competitive advantage. So, to recommend the organization needs to focus on the important strategies with regards to add high amount of values so that the customer will be maintained and managed for long term. (Barkley 2005)
Conclusion
The paper concludes important factors for competitive strategies with respect to comparison of two important players in the automobile industry known well as Harley Davidson and Honda. The paper focused on the current strategies of both the company with regards to the importance of its resources as well as capabilities for better growth strategies and analysis so the paper effectively met with the discussion on the comparison analysis of Harley Davidson with respect to Honda.
The resources and capabilities of Honda has been found the most innovative and creative when compared to Harley so the paper dealt with the competitive advantage and its recommendations especially for Harley Davidson to meet with the better edge of competitiveness. (Brno 2008)
