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Introduction
Harley Davidson is one of the largest motorcycle companies in the world. It has been financially stable over the years because of exceptional strategies such as strong corporate governance, a strong brand image, a good HDFS strategy, and acquisitions/ mergers. This report aims at analyzing Harley Davidson strategies through briefly discussing them and associating their success or failure to its success factors such as a stable corporate governance and its core competencies and capabilities.
Discussion
Harley Davidson Motorcycle Corporation prides itself in its globally renowned brand image that is associated with heavyweight touring and custom motorcycles. The company even has a motor that says HD motorcycles are a lifestyle and not about transportation(Kinzer, 2012). This branding strategy has helped the company grow over the years to where it currently is. The motorcycles are, especially, an American icon with Harley rallies across the U.S. The most famous rally associated with the brand image is the Black Hills rally, which is held in South Dakota(Kinzer, 2012). Such rallies help enhance the brand image of the company and attract more customers and help maintain a loyal consumer base.
Second, Harley Davidson has a stable financial services business unit. The HDFS allows Harley Davidson allows everything to be done by Harley Davidson for their consumers during their one stop shopping. It improves their consumer experience through providing financial services(Melief, Bundgaard, & Hathaway, 2006). This strategy not only allows a goo shopping experience because of convenience, but it also promotes sales for Harley Davidson products. Once customers have purchased their motorcycles, they can also purchase insurance covers and financing at Harley Davidson, based on their credit history. They do not need to go and purchase financial services from third parties. Also, Harley Davidson offers its customers favorable rates on the insurance. This helps attract more consumers and increase sales for financial services.
Third, Harley Davidson uses merging strategies to expand its businesses. For example, in 1969, Harley Davidson merged with the American Machine and Foundary Company in order to create more market presence because AMF was a well-known brand name for the manufacture of leisure products(Melief, Bundgaard, & Hathaway, 2006). When Harley Davidson gained market presence and became a strong brand name in the motorcycle industry, its executives bought it from the merger and made it independent. This was a very good strategy not only for creating market awareness, but also for gaining market share and creating a strong brand image. In 1993, Harley Davidson bought a minority interest in Bluell Motorcycle Company. It increased its share in the company in 1998 and became a majority shareholder. This acquisition aimed at increasing Harley Davidson’s market share in the Motorcycle industry(Melief, Bundgaard, & Hathaway, 2006).
Fourth, Harley Davidson has a very stable corporate governance strategy. This strategy has been constant over the years(Harley Davidson, 2011). For example, the company has a very strong Board of Directors that is well accomplished with leaders from different industries. They meet regularly to discuss the company’s performance, in line with the company’s goals and objectives(Harley Davidson, 2011). This helps the company to align all its strategies with its mission and vision in order to achieve organizational goals and objectives.
Finally, the company has a sustainability strategy. Just like any other company, Harley Davidson needs to ensure that its activities do not negatively impact the environment. For example, according to the company’s official website, Harley Davidson has a sustainability campaign called “renew the ride”. The company has partnered with The nature Conservancy in a sustainability campaign to plant 110, 000 trees in the Atlantic Forest(Harley-Davidson, 2013). The trees aim at promoting cleaner air and water. This is a good strategy that will help the company gain competitive advantage because they associate riding with the need for clean air and a clean environment.
Harley Davidson has changed some of its strategies over the years. Although it has not drastically changed, there are new strategies, such as sustainability strategies, that have been added to the organization’s key strategy list. The need for sustainability is rapidly increasing across all industries. Harley Davidson added sustainability to its corporate strategies in the 2000s in order to stay competitive in the market. Also, Harley Davidson’s corporate governance strategy has remained constant over the years. The company has been using a stable Board of Directors to keep the company in line with its goals over the years(Harley Davidson, 2011). It has also been involved in community development activities over the years in order to enhance its brand image. Third, Harley Davidson has been using similar motorcycle designs over the years. The only noticeable changes in its models are insignificant because it only changes designs for parts like speedometers. This is a constant strategy that needs to change because the heavyweight motorcycle is not as small as it used to be. Major competitors have entered the industry with substitute products(Melief, Bundgaard, & Hathaway, 2006).
In the social environment, Harley Davidson has associated its brand name with America. It has done this through creating a perception that Harley Davidson is an American icon. This helps attract American consumers because of patriotism. The company’s brand image is also included in its social environment through advertising a perception that Harley Davidson is a lifestyle and not about transportation. It achieves this through Harley motorcycle clubs and academies such as Rider’s Edge(Kinzer, 2012). In addition, there are increased interests in Harley Davidson motorcycles from other demographics rather than the main demographic of males in their 40s. The company is investing in R&D in order to come up with products that will cater for these demographic(Reuters, 2011). Second, in its economic environment, Harley Davidson has lowered rates for some of its financial services in order to cater for diverse customer needs. It is catering for premium financial needs as well as low end financial needs. Its financial services are also strategized in a way that they attract new and maintain current consumer bases. This is achieved through offering one stop financial services where customer s buy the motorcycle and insurance from the same place.
The company has core competencies such as strong and stable human resources and capital resources. It also has stable innovation resources from its HR and suppliers. It also has strong reputational resources such as a strong brand image, a good reputation with suppliers, and strong product perception. The company is capable of integrating technological resources; for example, through using information system in order to ensure smooth flow of production. It also employs highly skilled employees and provides high level training programs for the employees in order to add value to the company. It is also capable of manufacturing high quality products through its manufacturing plant that produces many motorcycle models.
Recommendations
Based on my analysis, the executives of Harley Davidson Motorcycle Corporation need to reinforce more strategic alliance engagements within the company’s international distribution channels. It should not just base its sales mainly in America(D'Aveni, 2010). This is because lack of or just a few strategic alliances leads to lack of expansion and loss of good market opportunities. In order to achieve this, the company needs to invest a lot of dedication and time in the international market for successful expansion into the market. The executives should appoint country based leaders and staff members to bridge cultural barriers and make wise cultural based decisions. The company should also take advantage of international trade agreements and create good relationships with foreign governments in order to enhance trade relations in the internationalmarkets. It should also have more participation in WTO activities. This strategy would help increase sales in the international markets, and enhance the company’s brand image in the international market scene.
Second, Harley Davidson should create more attractive financing options with low interest rates. This is especially because the company’s financial services have been weakening in the U.S. over the years. This can be achieved through extending marketing campaigns of HD financial services through channels such as Social Media, e.g.) Facebook and YouTube, and loyalty programs. This strategy would help in increasing HDFS sales, and targeting the lower end markets who cannot afford premium financial services. Third, HD needs to invest more in R&D in order to cater for environmental needs(Bruce, 2008). This is because of the rise in environmental compliance regulations. This will help come up with improved products that are environmental friendly through reduced oil consumption to save energy and use of green energy and bio fuel to reduce environmental impact. Finally, Harley Davidson has been losing market share to other market competitors because of lack of innovation(D'Aveni, 2010). The company has a trend of making insignificant changes, such as radio and speedometer, between its motorcycle models. Instead of this trend, Harley Davidson needs to come up with groundbreaking motorcycles designs that will appeal to current consumers and even attract new consumers to its customer base.
Conclusion
Harley Davidson is a global motorcycle company that is considered an American icon. Its brand image is associated with its being an American brand. The company has many strategies, such as corporate governance and sustainability. It also has core competencies and capabilities such as manufacturing its own products, a strong brand image and a good reputation with its suppliers. However, the company has been facing decrease in sales because of its lack of innovation in its product designs. This has led to a loss in market share to competitors. In order gain sustainable competitive advantage, the company needs to make strategic changes such as create strategic alliances in international markets and become innovative in its designs.
References
Bruce, F. (2008). A Case Study of Harley Davidson's Business Practices . Louisville, KY: University of Louisville.
D'Aveni, R. (2010, March 17). How Harley Fell Into The Commoditization Trap. Retrieved from Forbes: http://www.forbes.com/2010/03/17/harley-davidson-commoditization-leadership-managing-competition.html
Harley Davidson. (2011). Corporate Governance. Retrieved from Harley Davidson: http://investor.harley-davidson.com/phoenix.zhtml?c=87981&p=irol-govhighlights&locale=en_US&bmLocale=en_US
Harley-Davidson. (2013). Sustainability. Retrieved from Harley Davidson: http://ridefree.harley-davidson.com/renewtheride/?locale=en_US&bmLocale=en_US
Kinzer, T. (2012, August 21). The Harley-Davidson Experience . Retrieved from Cycle World: http://www.cycleworld.com/2012/08/31/the-harley-davidson-experience/
Melief, M., Bundgaard, T., & Hathaway, J. (2006). Strategic Report for Harley Davidson. Claremont, CA: Pandora Group.
Reuters. (2011, December 6). Harley-Davidson tries to lose its geezer appeal . Retrieved from Newsday: http://www.newsday.com/classifieds/cars/harley-davidson-tries-to-lose-its-geezer-appeal-1.3369571
