Case Analysis: Harley- Davidson Inc.
Case Analysis: Harley- Davidson Inc. This case study analyzes the differentiation strategy adopted by Harley-Davidson Inc. to differentiate itself from the competition. Further, it will address the issues and challenges faced by Harley- Davidson Inc. due to changing demographics and financial turmoil. And last but not least the case study will give an idea of what strategies Harley- Davidson Inc. could apply in the future so that it could sustain and enhance its competitive position. There are two generic business level strategies to yield a higher rate of profit over a rival according to M. Porter. First, a firm can focus on cost leadership, which generates economic value by having lower costs than competitors. Second, a firm can
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by also building cruisers targeting H.D. Due to the smaller corporate size and inability to share R&D across cars and bikes H.D.s ability to invest in technology and new products is limited. Thus, most of Harley's product development efforts in the past were limited to style changes, new paint designs and engineering improvements. In contrary, Honda has been continuously pursuing advancement of new technologies and new products. Thus, it puts emphasis on innovation in Fuel and Engine Technology. Because of the advanced nature of their research, Honda has a strong first-mover advantage over competitors such as H.D. It will be difficult for H.D., which does not actively pursue his own research to catch up with Honda. Moreover, Honda does also have a strong brand loyalty (64% vs. 48% Industry Average) and it offers multiple lines (cars, motorcycles, mowers). Further, Honda does cultivate mass production, whereas H.D. offers highly customized products, which allows H.D. to premium pricing. Moreover, Honda successfully continues to broaden the sales distribution base beyond the North American and Japanese markets to Asia, Russia and Europe. H.D. sells the American lifestyle and is rooted in American culture. The European motorcycle market focuses on performance bikes (70%) and not on H.D.s specialty, the cruisers (only 30%). Those circumstances lead to difficulties for H.D. regarding its position in the European