Strategic Management: Internal Analysis Name: Institution: Harley Davidson is the world’s leading manufacturer of heavyweight motorcycles. The company is based in Milwaukee, Wisconsin and has been producing motorcycles for more than 100 years. The company provides wholesale and retail financing and insurance programs principally to its dealers and customers. It operates in two business segments: motorcycles and related products segment and the financial services segment. The company undertakes building its position in the marketplace through new product launches, restructuring initiatives and strategic alliances. The company operates in an industry characterized by fierce competition. Its main competitors include Yamaha and Honda. Initially, the company operated in the United States and the European markets but of late it is venturing in the emerging markets. Strong brand image, operational efficiency and wide range of products and services on offer are the company principal strengths. The company boasts of one of the strongest brands in the world that has helped the company in attracting and retaining a loyal customer base. The company managed to establish a powerful brand image with its motorcycles attaining iconic status and being ranked among the most valuable brands in the world. Harley Davidson is permanent feature among the top 100 brands in the world. The high level of innovation and heavy investment in research and development has enabled the company to build resilient motorcycles known for durability, quality, design simplicity and traditional styling. The creativity of the company has enabled it achieve industry recognition for high quality, robust performance, best design and unwavering customer confidence a... ... middle of paper ... .... The company has also altered its marketing efforts in a bid to appeal to the young people and women. Previously, the company market initiatives targeted middle-aged men only. The company has also outsourced its manufacturing processes to reduce the cost of production enabling the company to offer its products at better prices. In addition, the company is planning to introduce low cc motorcycles that are relatively cheaper as it endeavors to diversify. Harley Davidson future outlook is bright. Its decision to enter emerging markets presents growth opportunities as the income levels in these countries rise. An increasing number of people in these countries have sufficient to afford luxuries such as motorbikes. Similarly, outsourcing would permit the company price its products competitively thus it gaining a competitive edge in the industry. References:
It is important that the company continues to produce high quality saddles and accessories for a wide range of street motorcycles, dual sports, quads and scooters. At the same time, the company's further success will depend on venturing into additional products while securing new customers.
motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments (Harley-Davidson website, p.2)."
The next ratio we will review is gross profit margin. Gross profit margin (GPM) measures the percentage of each sales dollar remaining after the firm has paid for its goods. The higher the gross profit margin, the better. Harley Davidson's gross profit margin was 35.08% for 2001, 34.09% for 2000.
BMW having high market share in European and U.S luxury car markets, started facing issues with launch product qualities and also facing a fierce competition from Japanese producers. Currently the market share was still stable but the rigorous growth of Japanese producers would affect BMW in future. These Japanese competitors had set higher standards of conformance.
The concept of recreational riding is new to the Chinese; therefore, HD has had to promote leisure riding to move their heavyweight bikes. Toward this end, HD established its Harley Owner Group (HOG) chapters in Beijing, Chengdu, Qingdao, and Shanghai; these owners clubs sponsor rallies and bike rides that promote leisure riding (Miller, 2012). Furthermore, they cooperate with local governments when planning their rallies, demonstrating benefit to the community and instilling confidence in Harley.
Harley’s fourth strength is that they have a strong brand equity. Brand equity is the value of a company that is calculated through the brand’s popularity. Having a strong brand equity is great, because it means that the company is in good standing. The company’s fifth strength is that they have a strong brand loyalty. Brand loyalty occurs when a customer repeatedly buy products from the company, even though they could bring their business someplace else. This is especially importantly for Harley Davidson because customers that have experience with the company are more likely to purchase new products that are released. Having brand loyalty also creates an image to prospect customers that it must be a good company if people are continuously buying its products. Harley’s sixth and last strength is that their products are incredibly durable. Because their products are so well made, they last a long time. Customers want to buy a product that is well built, so they don’t have to buy a new one. Since Harley Davidson has this strength, they attract more
This case study is about “Specialized Bicycle Components Inc.” known as Ride the Red “S”. Specialized was founded in 1974 by Mike Sinyard. According to Chris Murphy, director of marketing for Red “S”, specialized is for serious riders. He says, “The customer is buying the ride from us, not just the bike.” The company began to produce its own bike parts by 1976, and introduced the first major production mountain bike in the world in 1980. Specialized now has an extensive global distribution network of 5000 retailers in 35 countries in Asia, North America, South America, and Australia. They maintained a reputation as the technological leader in the bike and bike accessories. The formal mission is still the same since they established the company “To give everyone the best ride of their life.”
II. The Challenge HD has chosen the strategic direction of targeting women and the younger market that is technologically conscious in order to increase its share in the first time motorcycle owner market space. With the introduction of the new VRSC’S, and the new lowered sportster 833 L and the 1200 L, designed for small riders who want more power, also promoting the already existing HD motorcycle owners to step forward and purchase a bigger model. HD is in a position to attain a sizeable share in the first time motorcycle owners, the young males, and females’ marketplace. To target the women and the young market with the new product line, the company has adopted the following marketing objectives: to expand its current market (market expansion), diversify its product line (product diversification), and modify its marketing mix to target women and the younger demographic.
Honda, like other automotive companies, also came to the conclusion of firming a joint venture. At the moment, Honda was already famous for motorcycles in UK, but it was less well known in terms of the automobiles. While Honda’s cars enjoyed reputation for good quality and durability, the import restrictions limited its success it the European market. However, the European market was essential for the company’s global expansion. With the joint venture, Honda could avoid the restrictions on the import quota by assembling cars locally, because these cars would be considered locally produced. Moreover, a local partner could assumedly offer a better insight of the market.
Our company’s strategy is to sell consumers an experience, not just another motorcycle. We are geared to allowing our customers and potential customers experience what a Harley-Davidson motorcycle is all about. At Harley-Davidson, we don’t consider our motorcycles as automobiles but as a way to get from point A to point B in an exhilarating, exciting and fun way. We are also focusing on earning more market share globally especially in the Asian markets. We are also trying new product launches to appeal to more consumers other than just heavy
Italian manufacturer Piaggio ranks as one of the world’s top four players in its core business. It has consolidated leadership in the European 2-wheeler market. Piaggio should not miscalculate its competitors. Competition in the industry is very powerful, not only nationally but internationally as well. This is due to two well-established companies in this sector which are the Japanese Yamaha and Honda. Yamaha and Honda strengths are their long-run experience in the sector and the high quality image of products. Due to participations to the motorcycle championships, these two companies constantly receive positive feedbacks to their efforts in researching for first class products. In the future, other kinds of competitors are expected to arise: Chinese companies whose ability to imitate and create similar products at highly competitive prices is getting more and more dangerous (Piaggio, 2008)
Honda- focused differentiation, medium pricing, breadth of product line is high. Strengths are quality, reliability, overall value, and styling.
James, W. B., & Graham, B. (2004). Strategic change in the face of success? Harley-Davidson, Inc. Strategic Change, 13(4), 205.
"We fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments."
BMW has captured the attention of automobile drivers from all around the world with their “Ultimate Driving Machine.” The BMW Company was originally established in Germany and has extended nationally reaching over 12 countries. With Germany and the United States being the top two target countries, BMW has established their products as a combination of luxury, safety, and comfort with product lines to suit all styles of living. Revenues have been increasing each year since before 1996 with profits coming from product line of automobiles and motorcycles. In 2001, BMW came out with a new product group, the Mini. The Mini also contributed to the revenue increase in 2001. BMW has current developments in their sports cars, the Z8. BMW has created a trustworthy name for the automobiles they produce and has all the potential to continue their success in the future.