Harley-Davidson is the only American manufacturer of motorcycles. The company competes with strong Japanese competitors, including Honda, Kawasaki and Yamaha, as well as with European competitors such as BMW. The company specializes in the super-heavyweight class of motorcycle, with engines of more than 805 cubic centimeters (cc) in displacement. HarleyDavidson is a study in an American company that has survived hundreds of domestic competitors, two world wars, economic downturns and a significant quality problem to become a dominant force in the motorcycle market. This research examines the company's marketing strategy, compares it to major competitors, and examines the company's current financial position.
Harley-Davidson was founded in 1903 by Bill Harley and three brothers (the Davidsons). The company dominated the superheavyweight class of motorcycle for most of its history, but suffered severe quality problems during the 1970s and early 1980s. Some dealers found that they had to make repairs on bikes delivered from the factory before they could sell them, and stories circulated throughout the industry that Harley owners bought two bikes: one to ride, and the other to use as a source of spare parts (Voss, 1993, p. 26).
At the same time, there was increased competition from Japanese manufacturers who produced lighter, cheaper and more dependable motorcycles, and who targeted a different class of rider than Harley. While the super-heavyweights were increasingly associated with biker gangs, the Japanese cruisers were aimed at the burgeoning class of urban professionals. By 1983, Harley-Davidson's domestic market share had falling to a low of 23 percent, a steep decline from the 90 percent figures it held just a decade previous (Voss, 1993, p. 26).
In 1969, the company merged with the American Machine and Foundry Corporation (AMF), which resulted in members of the founding family losing virtually all control. The ...