Chatae M Falls

Argosy University

April 15, 2015

H-D is reputable globally for manufacturing of heavyweight motorcycles, accessories and parts. The company sells cruiser, custom and touring motorcycles in addition to offering H-D motorcycles parts, riding gear and apparel, accessories and general merchandise (Katz, 2015). In addition, H-D offer retail financing and wholesale, and insurance coverage for its customers and dealers.

Branded programH-D offer branded program that builds closer relation with

the customers. H-D Ride Planner allows visitors to the website of the company to create a route entering the starting point and the ending points and the desired stops. The outcome is a detailed map that can be saved and shared with other people. In addition, the site has a Photo center that allows placing of memorable photos of trips for family and friends to enjoy regardless of their physical location (Lenz, 2010).

Experience of freedom and camaraderieConsumers go for the Harley Davidson products brand

promise of experience of freedom and camaraderie. H-D marketing messages and brand experience support that is consistent across customer touch points lure customers to purchase the branded products feeling sense of freedom and move closer to achieving personal freedom.

The Life-Span Perspective

Target on specific groupsH-D has had profound target on specific groups with

tailored products to meet their needs e.g. example, cultivating interests among the women riders through The Ladies of Harley support group. The company has been focusing on heavyweight motorcycle segment that concentrates primarily on the mini niches such as touring, customized and standard motorcycles in the heavyweight division.

The Life-Span Perspective

Harley Davidson GroupH-D created Harley Davidson Group that allows owners to

share network and experience through rallies, rides, and other events. H-D created Rider’s Edge in 2000 that provides lessons for basic and advanced motorcycling skills that led to increased opportunity to target segments. Moreover, Barret (2013) argues that H-D has created a website for women motorcyclist and initiated outreach programs that target racial minorities to attract more customers.

Brands similarity and difference The various differential strategies have one similarity. Nonetheless,

they differ in the essence that the particular differential strategies exploit different market segments. They are geared to attracting more customers, and maintaining the existing customers of the lifestyle brand. H-D’s long presence in the market has enabled to gain economies of scale that have gown its strength and size to ensure it threatens new entrants to the market, and build customer’s confidence by producing high quality products. However, has implied by Katz (2015), it clear it exists a gap with respect to the differential strategies that H-D use, the company has not fully tapped into the young adult market yet it has great market potential for the company.

Joint venture possibilities

From the critical analysis, the H-D needs to consider having a joint venture in regions such as Asia and Europe. This is because the market within the regions is still gaining as a power in the world economy while also already achieving superpower status. Join venture will enable H-D to source and assemble powertrain components for use in potential new motorcycle products suitable for Asia and European market opportunity. Asia and Europe would be a good place to have a joint venture because Asia and Europe is currently a place going through dramatic political and economic development. Furthermore, the region is generally willing to remove trade barriers, unify financial regulations, create uniform minimum technical product standards and offer a common currency.

The Life-Span Perspective

Strength - corporate responsibility and EthicsH-D is strong ethical business and adheres to clear

code of business conduct. The company utilizes the ethical code of conduct in expanding its business in a responsible way that permits its customers to feel comfortable with the products. Thus, the code shapes the company that has enabled it to focus in producing high quality and excellent products and services.

Strength – strong brand image H-D owns a strong brand image globally that helps it to lure

and retain loyal customer base. The company has established a robust brand image with its motorcycles attaining iconic status and being ranked has the leading valuable brands. Indeed, H-D is the market leader in the US heavyweight market and has a strong market position in some European countries. H-D is famous for its durable, styling, quality and design simplicity that have contributed significantly to the success of the company by ensuring a strong market recognition and loyal customer base over the years.

Strong brand image - improving profitabilityHarley-Davidson, Inc. (2014) points out a strong fact that H-D

has been reporting improvements in its performance. For example, in FY2013, the company registered 17.6 percent increase in its net income up from the previous year. The company operating costs of FY2013 as a percentage of revenue reduced to 80 percent in comparison with the 82 percent in FY2012. In addition, the company income within the same period increased by 15 percent up from FY2012. Thus, in FY2013, the company operating margin and net profit margin rose to 19.5 percent and 12.4 percent respectively in comparison with the 17.9 percent and 11.2 percent in FY2012.

The Nature of Development

The Nature of Development

Strength – broad service portfolio and productH-D offers a wide variety of services and products

through the financial service segment and the motorcycles and related products segment. The specific services and products offered by H-D under its business segments provide a competitive edge to the company in achieving the larger market share and ensuring strong bottom line.

Weakness – overdependence on the USH-D predominantly relies on the US market and hence,

its business risks may increase due to the changes in the economy, demographics and weather conditions. Thus, any severe economic conditions in US could affect H-D’s results of operation.

Theories of Development

Theories of Development

Weakness – underutilize European market potentialH-D has a low European market share yet there is a lot of

potential for growth. The company is not utilizing its potential in the region.

Weakness – adherence to traditional products The company has limited ability in developing modern

(non-traditional) and technologically sophisticated products. Hence, the company places itself strategically vulnerable.

Opportunity - executive leadershipH-D has a great potential for growth in the

European international market. Thus, the can need to penetrate it by hiring European executives who have better understanding of the regions in terms of preference and tastes.

Opportunities – focused researched and development (F&D) endeavors

H-D has a robust strong research and development unit that ensures innovation and lure industry attention. The continuous R&D activities ensure the company is on the lead in custom and touring motorcycle market and develop products for the specific performance segment.

Threats – new emission standards Harley-Davidson, Inc. (2014) reports that motorcycle

stakeholders in Europe expressed intention for stringent emission standards. This could hurt the company since it the company will be forced to redesign its vehicles resulting in increased operational costs.

Threat – procurement of raw materials H-D depends majorly on suppliers to get raw materials and

provide components for utilization in its manufacturing of motorcycles. The company relies on single supplier for specific raw material meaning that the company’s business depend on the capability of the supplier to avail the raw material within time. Thus, occurrence where there is delay in receiving raw materials, delivery of the product to the customers is hindered which potential may negatively affect the business and customer relations.

Threat – human capital development frameworkH-D focused a lot on business resulting in its

concentration on recruiting. This rendered other HR practices such career development, performance review and succession planning back seat. Hence, making it hard for the new entrants to the company who are unaware of the H-D culture; the company therefore became susceptible to losing its competitiveness, as the new employees had no programs for growth and improvement.

Theories of Development

Through careful analysis of the Harley Davidson growth and profitability strategies, the company should focus on the following recommendations to build its strength and minimize on the effects of its rivals and threats in the global market. H-D should focus on the production of good quality heavyweight cycle to maintain its current market share. The company should focus on maintaining amicable and friendly customer relations even after the sale of the products.

H-D should focus on the strategy to providing the young adult customers with very stylish new created motorcycles to enhance their loyalty.

H-D should ensure it considers its older groups by providing them with easy and safe to ride motorcycles so that it builds strong customer confidence with its products. In addition, the company will reign over its competitors since many of them do not offer age limited cycles.

Theories of Development

Harley Davidson should focus on the production and sales of its high quality products on its foreign market so that it can boost its sales. Therefore, the company should ensure it opens up new delivery areas across the high potential markets in the world.

Theories of Development

Lenz, S. (2010). Harley-Davidson, Inc.: A Strategic Audit.

Katz, J. (2015). International and outreach continue to drive unit demand at Harley, providing profit growth. Available in: http://analysisreport.morningstar.com/stock/research?t=HOG&region=usa&culture=en-US&productcode=MLE

Harley-Davidson, Inc. (2014). Financial and Strategic Analysis Review

Barret, R. (2013). In quest to expand market, Harley-Davidson reaches out to women. Available in: http://www.jsonline.com/business/in-quest-to-expand-market-harley-davidson-reaches-out-to-women-b9984573z1-221524671.html

Harold, S., Cheese, P., & Cantrell, S. (2006). "Focusing HR on growth at Harley‐Davidson: Sustaining widespread success by prioritizing employee development", Strategic HR Review, Vol. 5 Iss: 2.

Research in Life-Span Development