An Analysis of Harley-Davidson's Strategy

The Harley-Davidson eagle logo is one of the world's 10 most-recognized brands, behind McDonald's, Coca Cola, and Microsoft(Johnson & Scholes 1996;Nee 1998; Mintzberg 1994) and, in 2002, the company celebrated its 100th Anniversary. In the company's annual report for 2002, published on its website, the Chairman of the Board, Jeffrey L. Bleustein, stated that the company, in 2002, produced 263,653 motorcycles "a 12.5% increase over 2001. In turn, motorcycle revenue was up 18.3% to $3.16 billion. Anticipating another strong year, we have set a production target of 289,000 units for 2003. In the United States, Harley-Davidson retail sales climbed nearly 18% in 2002. As the undisputed leader in the domestic heavyweight motorcycle market, we are also steadily growing our business in other regions of the world" (Bleustein 2002).

Financial analysts and market observers tend to track Harley's recent growth as a result of a strategy of innovation that began in the 1960s when Harley, which had for all practical purposes owned the market for heavy road machines was passed by Honda which was using several techniques of "Just in Time" manufacturing to pare costs, increase productivity, and compete with Harley (Davidson 2002). Davidson, in his historical account of the company (written as the grandson of one of the founders, admits that the company underestimated the threat of the Japanese imports, and let some design i

and not easily copied, and the brand identity is quite strong. A new entrant is always a possibility, but that new entrant would pose a threat to both Harley and Honda (Strischek 1988). The Force of Competitive Rivalry This is the primary force that Harley must contend with. Authors Dave Nelson, Patricia E. Moody, and Rick Mayo, in their 1998 study of Honda and its growth which was fueled by a primary focus of beating Harley (1998) details the strategic thinking that led Honda engineers to launch product assaults and strategic planning master goals that were ignored by Harley. The authors note that one of Honda's master philosophies was the management goal of "Honda's supply-based excellence program which, among other things, entails developing great suppliers rather than merely leveraging existing ones (Nelson, Moody, Mayo 114). Harley, as it was shown in Davidson's book, learned lessons from the Honda situation and used the same techniques to launch offensive battles. In fact, most observers agree that there are few distinctive character differences between the two companies, which, to Porter, means that the primary competition is price and service sensitive. The field is best characterized as "consolidated" (defined by

Category: Business - A