Upload
phungdiep
View
222
Download
0
Embed Size (px)
Citation preview
The Global Marketplace With Harley-Davidson: Market Entry Strategies
in India
Group - 4
Arpita Banerjee Preeti Sharma Priya Pawar Deepika Nalwale Pratik M. Vaibhav Datey Sagar Gore Prateek R.
Global competition is intensifying and few U.S. industries are now safe from foreign competition.
To compete, many U.S. companies are
continuously improving their products, expanding into foreign markets and becoming Global Firms.
Global firms face several major problems:
Variable exchange rates, Unstable governments, Protectionist tariffs and trade barriers, Corruption.
Looking at the Global
Marketing Environment
Deciding Which Markets
to Enter
Deciding How to Enter
the Market
Deciding on the Global
Marketing Program
Deciding on the Global
Marketing Organization
Deciding Whether to
Go International
Country’s Industrial Structure
Subsistence Economies
Raw Material Exporting
Economies
Industrializing Economies
Industrial Economies
Income Distribution
Government Bureaucracy
Attitudes Toward International
Buying
Monetary Regulations
Political Stability
How Customers
Think About and Use
Products
Business Norms and Behavior
Cultural Traditions,
Preferences, and
Behaviors
Reasons companies might consider International expansion: Global competitors attacking the domestic market, Foreign markets might offer higher profit
opportunities, Domestic markets might be shrinking, Need an enlarged customer base to achieve
economies of scale, Reduce dependency on any one market, Customers might be expanding abroad.
Most companies do not act until some situation or event thrusts them into the international market.
Marketer’s Checklist for Identifying Market
2. Geographic Characteristics.
3. Economic Factors.
4. Technological Factors.
5. Sociocultural Factors.
6. National Goals and Plans.
1. Demographic Characteristics.
Potential
Direct Investment
Joint Venturing
Exporting
Am
ou
nt o
f C
om
mitm
en
t, R
isk, C
on
tro
l,
an
d P
rofit P
ote
ntia
l
Greater
Lesser
Straight
Extension
Communication
Adaptation
Product
Adaptation
Dual
Adaptation
Pro
mo
tio
n
Don’t Change Product
Adapt Product
Product
Don’t Change
Promotion
Adapt Promotion
Product Invention
Develop New Product
5 International Product and Promotion Strategies
Export Department
International Division
Global Organization
Deg
ree o
f In
vo
lvem
en
t in
In
tern
ati
on
al
Mark
eti
ng
Acti
vit
ies
Motorcycle is the major contributor to the automobile sector of the India.
There are wide growth opportunities in future due to increase in
disposable income.
Advanced technology, low maintenance cost, and ability to perform well on Indian roads are the major growth drivers for the industry.
Overall economic development is another reason for the increase in the demand for motorcycles in India.
There are variety of motorcycle brands available in India.
Major players operating in India are HONDA, SUZUKI, KAWASAKI, YAMAHA,DAELIM,LML, HERO, KI NETIC,TVS, BAJAJ etc. who have adopted different market entry strategies to enter in India.
The factors which influence consumer buying decision : 1. Product quality 2. Performance & design 3. after sales services 4. Brand image 5. Cost • Major demand among Indian consumers is for 100cc (light
weight) bikes. Current scenario suggests that demand for higher engine
capacity bike is increasing in India. The current players in market are making suitable changes to meet the demand.
Harley-Davidson often abbreviated H-D or Harley is an American motorcycle manufacturer. Founded in Milwaukee, Wisconsin, during the first decade of the 20th century, it was one of two major American motorcycle manufacturers to survive the Great Depression. The company sells heavyweight(over 750 cc) motorcycles designed for cruising on the highway. Harley-Davidson motorcycles (popularly known as "Harleys") have a distinctive design and exhaust note. They are especially noted for the tradition of heavy customization that gave rise to the chopper-style of motorcycle
Harley Davidson attributes can be grouped according to kind of Purpose it is used for-:
Touring Bikes -Big Twin engines and large-diameter telescopic
forks
Sports bikes -For the Sportster Evolution engines used since the mid 1980s,there have been two engine sizes XL1100, XL1200
Dyna-Models utilize the big-twin engine (F), small-diameter telescopic forks
Revolution - Models utilize the Revolution engine (VR), and the
street versionsare designated Street Custom (SC) Softail - Models utilize the big-twin engine (F) and the Softail
chassis (ST)
Considering growth opportunities for high engine capacity bikes, HD was eager to enter Indian market since 2005.
Due to higher import duties and stringent emission norms, H-D is struggling to enter in Indian market.
In addition, there is a trade dispute between India and US government related to the ban imposed on Indian mangoes.
A part from this, there were no emission guidelines for motorcycle with engine capacity above 500cc.
In India H-D is targeting the youth with higher disposable income.
In April 2007, a deal was struck between US and India which mutually benefitted both countries.
According to the emission guidelines India has agreed to apply Euro-3 norms for large bikes.
Most of the foreign motorcycle companies entered in India either through technical collaboration and joint venture.
Suzuki and Honda adopted licensing and established subsidiaries in India.
Royal Enfield from England entered into Indian market by establishing an assembly unit.
They import parts from England and assemble them in India as duties payable on parts is less compared to completely built units.
The German large bike manufacturer, BMW entered into India through joint venture with Hero group in 1997.
But it failed in India due to high price. Despite reducing price by more than 50%, sales of BMW bikes did not increase and so it had to terminate its venture in India.
Vice President of H-D,Timothy K Hoelter has announced that whenever they enter Indian market it will be through the sourcing route.
The Feasible Market entry strategy for HD in India is through import of CKD and then assemble in India.
Import CBUs as price does not matter for niche customer. Thus Dealership is one of the best entry strategy for HD.
Own Subsidiary is not a viable option for the following reasons Large Capex, Sales Volume very low/niche, Import of Technical Expertise, Time consuming for ROI.
Product Modification, After sales services and Accessories availability should be the main things to concern.
As it is a symbol of Rugged Individualism, Independence, Logos, HOGs and their Ride For Fun should be focussed and thus the market segmentation should be done according to that.
CompetitionOligopoly, with Harley Davidson as
main threat (48.1% of US market share),
particularly in terms of brand.
Other competitors are
Triumph, Yamaha, Honda
(on price/technology)
& BMW
Bargaining Power
of BuyersPower is high due to branding and loyal
customer base, so Harley buyers
unlikely to switch, as costs are too high.
New entrants unable to touch Harley’s
licensees, as they are locked in dealer
networks
Bargaining Power
of SuppliersPower may be low within the
market, due to Harley’s
dominance.
High power with regard to new
entrants, due to high switching
costs
Threat of
SubstitutesLow threat from
Cars, as consumer likely to have one
in addition. Low threat from other
types of motorcycles, as for
different markets.
Threat from
New EntrantsDominance and strength of Harley brand
suggests high entry barriers, so low threat
from new entrants. No dominating brand
in Europe means here threat from
new entrants higher in Europe
Porter’s Five Forces (1979), (1980), and (1985)
in analysing the cruiser market
Figure 1.
Strengths
Technical Excellence
Efficient Value Chain ensure quality
Strong Brand
Location Advantages
Effective management
Strategic Alliances
Weaknesses
Narrow Target Audience
Polarized sales
Low economies of scale
Sparse Dealer Network
Limited Growth since yr. 2000
Opportunities
Fast growing segment
Customers of Japanese motorcycles
have low brand loyalty
Reduction in international trade
barriers
Threats
Low price of competitors
Competitors enjoy lower costs
Competitors have high economies
of scale and low cost of capital
•http://bikes.pricedekho.com
•Total 16 Harley Davidson Bikes available in India online.
•Harley Davidson Bikes are available in Indian markets starting at Rs.5,50,000.
•The lowest price model is Harley Davidson Superlow Xl883l.
•Most popular Ducati Bike is Harley Davidson Fxdc Super Glide priced at Rs. 11,50,000.
•Harley-Davidson executives have already met with Indian vendors and dealers in early talks about establishing a dealer network, and word has it the new bike will debut at the 2014 New Delhi Motorcycle Show.