Harley Davidson Case AnalysisJoin now to read essay Harley Davidson Case AnalysisDespite their conception in 1903, Harley-Davidson and the motorcycle industry as a whole didn’t really take off until after the Second World War. Many people rode motorcycles during the war, with Harley-Davidson themselves supplying almost 90,000 motorcycles for the U.S. military during this time. Many veterans chose to purchase motorcycles upon returning home, as they enjoyed riding during the war and wanted to continue riding in their civilian life. This generation known as the “baby-boomers” quickly became the main target audience for many of Harley-Davidson’s marketing efforts. With sales increasing and the industry growing, many “motorcycle clubs” and “rallies” were introduced. Unfortunately, due to the lewd behavior displayed by most people associated with these clubs and rallies, bikers typically had an image of being disorderly and raucous. Harley-Davidson’s image itself took a big shot due to the Hells Angels. This was a motorcycle gang wishing to become notorious for “drug trafficking and other organized crime activities,” who used only Harley-Davidson motorcycles. All of this combined to lead to a decline in demand and sales throughout the entire industry during the 1960’s. The industry was really helped out with the release of the Hollywood film Easy Rider in 1969. This film helped change the public’s perception of bikers and sparked an increase in motorcycle demand which has lasted to this day.
The motorcycle industry offers products which can be viewed as luxuries or wants as opposed to necessities. When concerning Harley-Davidson, most motorcycle owners have purchased their bikes as a second vehicle, using them more during weekends and off-time instead of during the work week. This implies that the motorcycles serve for recreational purposes and thus are an item which can be expendable at times. This has hurt the industry recently with the slight recession the United States economy is facing. Another interesting thing to note about the motorcycle industry is the different appeal bikes carry in different global regions. In the United States for instance, Harley-Davidson has had much success because of the market trends and tastes people enjoy. Harley-Davidson has benefited from a U.S. market which enjoys casual and recreational riding. This isn’t necessarily the case overseas, as in Europe the trendy pick is a sleeker street bike, with a focus on speed and handling as opposed to power and comfort.
Despite these somewhat unfavorable market characteristics, Harley-Davidson has found success in the motorcycle industry. Some key factors in order to achieve this include having a strong and adaptable brand image, having a strong marketing effort (both domestically and globally), and having a strong network of dealers. Harley-Davidson has found ways to turn these factors into strengths while pursuing a strategy using focused differentiation to sell its products. This implies that the company sells a high-quality product at a premium price. The company is looking to differentiate itself from its competitors by offering motorcycles that have more power, custom accessories, and carry the Harley-Davidson brand name and logo. Harley-Davidson has tried to implement this strategy with various techniques, with the main one being creating a strong sense of community between Harley-Davidson owners. Harley-Davidson has created a network among its clients known as the Harley Owners Groups (HOG) which allows for people in certain geographic regions who own Harley-Davidson motorcycles to socialize or ride with other owners. This has helped create strong brand recognition, easily making Harley-Davidson the biggest and most recognizable names in the industry. Another thing which Harley-Davidson has done to gain more control of the market share is to incorporate apparel and accessories into its product line, which has helped in many areas where consumers don’t have the resources to purchase a motorcycle, but still wish to maintain the biker image or are supportive of the brand name.
In regards to the Five Forces Analysis, Harley-Davidson stands in rather strong position. When looking at the rivalry from competitors, Harley-Davidson is doing very well domestically, controlling nearly fifty percent of the market share within the United States. In terms of their global positioning, Harley-Davidson has fared fairly well with a strong positioning in the Asia-Pacific market. In the European market however, larger motorcycles are not used as frequently as are smaller and more efficient bikes, leading to a lower market positioning. When analyzing the potential new entrants to the motorcycle industry, one must look at it both from a domestic and global perspective. Within the United States, the Harley-Davidson brand is relatively safe from competition due to a strong brand loyalty that
hales well internationally, especially in Asia.
The recent Harley-Davidson patent litigation demonstrates how this approach could have consequences for global positioning (i.e., the possibility of an outright expansion) in the face of new competitors. However, Harley-Davidson believes it is more effective than their predecessors to ensure that it is a safe, attractive and very competitive product when looking at Harley-Davidson, because of its very high price point.
When designing the patent covers the new Harley-Davidson motorcycle, Harley-Davidson is designing a new, smaller and more effective version of its brand name, specifically, the K10 which could significantly boost their global positioning, which in turn helps to further increase motorcycle sales and profits across the US.
This case will hopefully help to dispel some myths about Harley-Davidson regarding its motorcycle name. While this motorcycle design incorporates Harley’s brand name, Harley, as such, does not actually sell the K10. Harley could sell the patent over a long period of time and then be considered as the new brand by a number of existing motorcycle companies, depending on how it sells. However, the fact that these two names are in very different places as well, for many motorcycle makers, makes it extremely difficult for them to differentiate their brand from other related models.
So how do we see ourselves as better positioned to benefit from Harley’s patented K10 design and future product innovations?
Our customers and partners in the Harley-Davidson motorcycle industry will not only benefit from the addition of the brand name Harley today, but will also benefit tremendously in the future as competition grows for the brands within Harley and in other related brands. This has been shown with BMW, for example, which has made over 200 years of industry innovation into models with unique, patented designs. If this makes Harley’s K10 for BMW motorcycles a better product than it was before the K-10’s patent was originally patented, the success likely will likely come at the expense of other brands with similar innovative designs.
The same trends will be observed if new Harley-Davidson motorcycle models are adopted, for example, as BMW has made over 150 years of motorcycle innovation into the brand name BMW. BMW’s new BMW M and BMW RX series will have different branding and models in mind, with one model reflecting Harley and another reflecting BMW.
In future, competitors will use Harley-Davidson’s innovation as a basis to attack Harley’s patent infringement case, but it is not as though we are going to be able to eliminate competing Harley-Davidson models by designating specific Harley brands for future use. This is a long-term plan that must keep Harley-Davidson in the driver’s seat and has been proven by numerous other Harley-Davidson motorcycle competitors in the past.
Of course, at this level of corporate governance, it would not be wise for Harley-Davidson to be placed on the market at all. If it is, then we are in a position where Harley will be judged by the public as an innovator for many years to come, rather than the product itself.
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Harley-Davidson
Bicycle and Motor Trend “If you’re new to the market, you’ve been doing a really good job in this space.””–Randy L. Taylor, Partner,
Cape Verde Motor Company “We have been producing all our bikes for over 20 years and that’s it. We’ve had success and growth.”–Mike M. Jorgensen, Partner,
Dodge Jeep’s Cycle Sales
— “One of the things that has been very important to us so far is, you’ve seen the bike and what is it for in terms of sales and the company as well as the potential for a success and a growth of the company. On the other hand, the potential for other, smaller American manufacturers and companies on the market to produce our bikes and we’ve been at it for a long time in the bike industry, but at this point in time we have a great opportunity to grow to become a significant player in the world of motorcycle design and manufacture, and then have the opportunity to expand to other markets, where we have to do what we have done here, so that when we do have new bike manufacturers we can be able to make sure that we can get a great deal of sales here that is going to help our shareholders, the people we serve so much. It just shows that we’re really looking forward to growing and expanding and we’ve been committed to growing, but at this point in time there is no guarantee that what we want to do, how we want to do it, that we’re gonna do it that way or that our shareholders want we gotta do it that way. So, in terms of the bike industry and the future of the business, we’re going to be very focused on growth.”–Steve Hochmiller, Associate President,
Hollywood Company “It’s been really exciting to see the growth in the bicycle sector in this time. We recently saw sales of our ‘Cabra’ class of bikes rising. We’re just getting started on those numbers, but that growth is growing rapidly. And it seems to be happening so quickly that I think we’re at the point where the business can begin to feel like we’re in a new place, but ultimately it’s just growing and it is just not gonna happen quickly enough.”–Michael R. Jansen, Assistant Director,
Lincoln Cycle Works
— “That change is something that was expected and that’s something that is very important for us about the future growth in the bicycle industry. And frankly, we’re starting to realize that that growth is not what we expect and that’s where we are heading in the future. And as soon as we have more of a vision of how we are going to do things, we’d like to continue to work with our partners in the future so that the bike industry doesn’t just slow down, but that we can continue to push for that growth back to us to continue our strong place in the world of bicycle design and manufacture.”–Gary J. Boren , President,
Dodge Jeep Motor Sales
— “It’s an incredible opportunity for us, and to continue our very successful business model in an increasingly crowded industry in many of the countries
Bicycle and Motor Trend “If you’re new to the market, you’ve been doing a really good job in this space.””–Randy L. Taylor, Partner,
Cape Verde Motor Company “We have been producing all our bikes for over 20 years and that’s it. We’ve had success and growth.”–Mike M. Jorgensen, Partner,
Dodge Jeep’s Cycle Sales
— “One of the things that has been very important to us so far is, you’ve seen the bike and what is it for in terms of sales and the company as well as the potential for a success and a growth of the company. On the other hand, the potential for other, smaller American manufacturers and companies on the market to produce our bikes and we’ve been at it for a long time in the bike industry, but at this point in time we have a great opportunity to grow to become a significant player in the world of motorcycle design and manufacture, and then have the opportunity to expand to other markets, where we have to do what we have done here, so that when we do have new bike manufacturers we can be able to make sure that we can get a great deal of sales here that is going to help our shareholders, the people we serve so much. It just shows that we’re really looking forward to growing and expanding and we’ve been committed to growing, but at this point in time there is no guarantee that what we want to do, how we want to do it, that we’re gonna do it that way or that our shareholders want we gotta do it that way. So, in terms of the bike industry and the future of the business, we’re going to be very focused on growth.”–Steve Hochmiller, Associate President,
Hollywood Company “It’s been really exciting to see the growth in the bicycle sector in this time. We recently saw sales of our ‘Cabra’ class of bikes rising. We’re just getting started on those numbers, but that growth is growing rapidly. And it seems to be happening so quickly that I think we’re at the point where the business can begin to feel like we’re in a new place, but ultimately it’s just growing and it is just not gonna happen quickly enough.”–Michael R. Jansen, Assistant Director,
Lincoln Cycle Works
— “That change is something that was expected and that’s something that is very important for us about the future growth in the bicycle industry. And frankly, we’re starting to realize that that growth is not what we expect and that’s where we are heading in the future. And as soon as we have more of a vision of how we are going to do things, we’d like to continue to work with our partners in the future so that the bike industry doesn’t just slow down, but that we can continue to push for that growth back to us to continue our strong place in the world of bicycle design and manufacture.”–Gary J. Boren , President,
Dodge Jeep Motor Sales
— “It’s an incredible opportunity for us, and to continue our very successful business model in an increasingly crowded industry in many of the countries
Bicycle and Motor Trend “If you’re new to the market, you’ve been doing a really good job in this space.””–Randy L. Taylor, Partner,
Cape Verde Motor Company “We have been producing all our bikes for over 20 years and that’s it. We’ve had success and growth.”–Mike M. Jorgensen, Partner,
Dodge Jeep’s Cycle Sales
— “One of the things that has been very important to us so far is, you’ve seen the bike and what is it for in terms of sales and the company as well as the potential for a success and a growth of the company. On the other hand, the potential for other, smaller American manufacturers and companies on the market to produce our bikes and we’ve been at it for a long time in the bike industry, but at this point in time we have a great opportunity to grow to become a significant player in the world of motorcycle design and manufacture, and then have the opportunity to expand to other markets, where we have to do what we have done here, so that when we do have new bike manufacturers we can be able to make sure that we can get a great deal of sales here that is going to help our shareholders, the people we serve so much. It just shows that we’re really looking forward to growing and expanding and we’ve been committed to growing, but at this point in time there is no guarantee that what we want to do, how we want to do it, that we’re gonna do it that way or that our shareholders want we gotta do it that way. So, in terms of the bike industry and the future of the business, we’re going to be very focused on growth.”–Steve Hochmiller, Associate President,
Hollywood Company “It’s been really exciting to see the growth in the bicycle sector in this time. We recently saw sales of our ‘Cabra’ class of bikes rising. We’re just getting started on those numbers, but that growth is growing rapidly. And it seems to be happening so quickly that I think we’re at the point where the business can begin to feel like we’re in a new place, but ultimately it’s just growing and it is just not gonna happen quickly enough.”–Michael R. Jansen, Assistant Director,
Lincoln Cycle Works
— “That change is something that was expected and that’s something that is very important for us about the future growth in the bicycle industry. And frankly, we’re starting to realize that that growth is not what we expect and that’s where we are heading in the future. And as soon as we have more of a vision of how we are going to do things, we’d like to continue to work with our partners in the future so that the bike industry doesn’t just slow down, but that we can continue to push for that growth back to us to continue our strong place in the world of bicycle design and manufacture.”–Gary J. Boren , President,
Dodge Jeep Motor Sales
— “It’s an incredible opportunity for us, and to continue our very successful business model in an increasingly crowded industry in many of the countries