Harley Davidon 2004 Case Study

HARLEY DAVIDSON

Case Study: Harley-Davidson in 2004

This case study is seeking to analyze the competitive strategy of Harley-Davidson and the resulting strengths and weaknesses that have led the company to success, or in some instances failure. Harley-Davidson’s vision is to fulfill dreams inspired by the many roads of the road by providing remarkable motorcycles and extraordinary customer experiences. Along with that they fuel the passion for freedom in their customers to express their own identity. This vision has helped Harley-Davidson build upon their image, brand, and customer experience over the years. The increased intrigue in motorcycles became a phenomenon towards the end of World War II as veterans began to purchase their own personal motorcycles as a result of having enjoyed them during the war. The growth of biker gangs, led to increased mystique and popularity among the rugged motorcycle style offered distinctly by Harley-Davidson, and this occurrence has helped carry the company through even the roughest times.

1. What are the dominant business and economic characteristics of the global motorcycle industry? What is the industry like?

The outlook for the global motorcycle industry looked promising in 2003 with over 28 million motorcycles in operation worldwide, over 950,000 motorcycles sold in the U.S. alone that year, and expected growth of 5% annually through the year 2007. The industry is segmented based off of engine size and vehicle style, with engines ranging from 125cc (cubic centimeters) up to 650cc and 651+cc, and style varying by usage from performance bikes to touring and heavyweight. The industry wide demand for motorcycles increased by 10% in 2002, while the demand for 651+cc bikes grew almost 17%. Other characteristics of the global industry include the U.S. being the largest market for heavyweight motorcycles with Europe following not far behind, Europe holding strong as the largest market overall for motorcycles with 1.1 million registrants for 125+cc motorcycles in 2002. Lastly, the dynamics of the industry are greatly affected by government entities and agencies across all nations that motorcycles are operated in. For example, in the U.S. motorcycles are regulated by the Environmental Protection Agency, National Highway Traffic Safety Administration, and state environmental agencies. Another agency that affects the industry heavily is insurance agencies, and they not only create standards that are imposed on producers, but also policy regulations that affect the owners of the vehicle. All of these elements look to a lucrative environment as far as the demand and potential buyers of the product line, yet simultaneously regulations imposed by agencies have the potential to cap the possible growth.

2. What cross