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Disadvantages of international expansion
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Harley Davidson is a company with many strengths. The first strength that they have is a strong loyal customer base. It is important to have loyal customers because they continue to come back and purchase more products, thus making more profit for the company. Harley Davidson’s second strength is that they wide product range keeping consumers interested and wanting to return. Having a wide product range gives the customer an opportunity to find a bike that suits them best. If the company were to have a small product line it would not only limit the customer’s ability to find a bike that fits them, but if they were to not like the bike they chose, they might have to find a different company that supplies a bike they would like. So all-in-all, …show more content…
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 …show more content…
The bike company has three manufacturing plants. This might not seem like a weakness but Harley Davidson does not just sell to the United States, but the entire world. Therefore having only three manufacturing plants limits the amount of bikes they can produce to satisfy weakness to such a big company. Most of Harley Davidson’s sales are generated from the United States. There is little to no revenue recorded from other parts of the world. The second weakness that they have is the expensiveness of the products. Since there is a limit on how much the company can grow in solely the US market, they should definitely focus on expanding globally. Compared to other brands, Harley’s prices tend to range higher. This is a weakness because it limits the amount of people that can afford one. The third and final weakness of the company is that the people that buy these bikes are limited to a small age demographic. This demographic would be people over forty five years old. Now the problem with this is that the people that buy these bikes are getting older and starting to die off. The bikers are not being replaced by younger people. A Harley Davidson may not be as attractive to younger people as may a Ducati or some other sort of motorbike. The company’s product line is not diverse enough to advertise to customers of the younger
When one thinks of classic Americana, they reminisce about the 1970s and 1980s and the notion of the nostalgic past in terms of what is the classic American image. It was a time of economic prowess where the blue collar factory worker would work 9 to 5 and then go to the local bar with his coworkers. However, times have since changed. The industrial plants that once dominated the Great Lakes economic region has become a shell of its past to the point where it is now none as the Rust Belt as industry left and white collar jobs became the norm. Since this degradation has settled into this once industrial cities, many cities and companies have sought to rebrand themselves in order to build from their reputations in the past to appeal to the nostalgia felt today. One such case where these is a correlation between a company and city are that of Harley Davidson, founded 1904, and Milwaukee, Wisconsin. Both have sought to rebrand themselves to the public and consumer, with Milwaukee seeking to transformation its image into that of a young and vibrant and city while Harley targets a new clientele. It is this shift to Harley’s "cult branding" to attract new clients that parallels Milwaukee's attempts to integrate itself to a service sector economy based on touristic leisure and the consumption of
Allstate insurance is the second largest property and casualty insurance company by premiums in the United States. Allstate insurance handles about 12% of the U.S home and auto insurance market. (Allstate, 2014). Many of Allstate’s customers fall under what one could refer to as a traditional selection of insurance for automobiles. Recently, Allstate has noticed a major shortcoming in lifestyle insurance, which includes coverage for motorcycles, boats, and other recreational vehicles, in comparison to its competitors. The motorcycle insurance sector is a 10.4 billion dollar industry and growing (PRWEB, 2012). The U.S. Department of Transportation website reports some astounding figures, including that 5,370,035 motorcycles were registered three years before the article, 7,138,476 motorcycles registered at the time of the article, and grew to 9,477,243 registered motorcycles at the end of 2012 (NHTSA, 2013). It is obvious as to why Allstate would identify motorcycle insurance as a worthy lifestyle product to devote marketing research dollars into in order to develop new strategies for cornering a share of the market.
Harley-Davidson states their mission as “We fulfill dreams through the experiences of motorcycling by providing to motorcyclists and to the general public an expanding line of motorcycles, branded products and services in selected market segments.” They have performed wonderfully over the past hundred years, and have not forgotten their mission or where they came from. Over the years they have stuck with the things they know, and also expanded into related services and products. Out of the 151 motorcycle manufacturers, Harley-Davidson and Indian were the only two companies to survive the Great Depression. Harley-Davidson was the only one in America after Indian dropped out in 1953, but face Indian again now since they re-entered the market in 1999.
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.
...es how powerful of a symbol it has become. You wouldn’t consider the fact that someone drives a Honda Accord a defining characteristic of his or her identity but somehow that changes when it becomes a Harley Davidson Heritage Softtail. "Four wheels move the body two wheels move the sole" (Harley Davidson Ad/ 1992). It becomes clear that the motorcycle is much more than a vehicle; it is a manifestation of American values. When you break it down nothing seems more American that freedom, and brotherhood. Film has fully capitalized on these characteristics helping make the motorcycle a powerful image that has had a defining impact on American culture.
The series of activities that are enacted by a firm that add value to a product beyond the cost of the production are referred to as the value chain. Harley Davidson offers a combination of superior performance and unique attributes within its value chain that promotes their core competencies and provides them with a competitive advantage.
Strengths: low price, strong brand name, excellent merchandise, exceptional employees, huge membership base, economies of scale, efficient distribution and operation.
• The people in the company and the passion which the people have for what they were doing. Weaknesses • Sales amount was going down. • Dealers don’t have the time to educate customer in each product of every line that they carry. • Just focus on the retailer instead of the end-users. • Competition - There are now more than 20 manufacturers in the bicycle industry and Specialized will need to stay at the forefront in order to keep its leadership.
During the 1970's, HD was facing a decline in market share due to increased competition with Japanese companies. By phasing out weak models, becoming more selective, and limiting sales and promotions, HD was able to carve out a niche in the marketplace which it enjoys today. Now again faced with a period of decline, HD is relying on its newly adopted marketing objectives. First, HD needs to expand its potential customer base to include enthusiasts and non-enthusiasts young males, and females into buying HD motorcycles over any other competitor. This thought is accomplished through the introduction of the VRSC’S, and the lower and narrow Sportsters, Dyna’s, Softail’s and positioning them in the market to a younger demographic. Secondly, HD needs to position the VRSC’S, Sporster, Dyna and Softail to also appeal to first time buyers of motorcycles. HD's strong brand identity can help pull in new clients.
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.
Hunsk Engines is a motorcycle company that made the fatal mistake of expanding its research in the market on its new products. The companies main competitors were companies like Harley Davidson, where they sold classic products that were seen as something with altering respect. Marty Echt is hired on by Hunsk Engines to restore the company’s image, on what used to be classic motorcycles. He argues that the company made the mistake of forgetting about its original products and, “lost its identity”. This problem frequently happens when companies attempt to grow, in order for new products to make it in the market place you have to carefully strategize its competitive characteristics and know when to introduce a new product through Michael Porters life cycle.
James, W. B., & Graham, B. (2004). Strategic change in the face of success? Harley-Davidson, Inc. Strategic Change, 13(4), 205.
Harley-Davidson institutes a pull strategy in the promotion of the FXDS-CONV Dyna Convertible. Due to the limited number of dealerships (for example, there are only five in Nashville and the surrounding communities) customers must actively seek out a location to purchase this bike. Also, because so many customers decide to customize their Dyna Convertibles, they must place a special order with the dealer, who in turn must contact intermediaries along the distribution channel in order to satisfy the customer. Further, the fact that demand for Harley motorcycles far exceeds the supply indicates that a pull strategy is in place.
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.