Harley-Davidson is a manufacturer of heavyweight motorcycles primarily in United States and has small markets in Europe, Asia Pacific, Latin America and Canada. The Davidson brothers established the company in 1903 in Milwaukee. The motorcycle rose to fame during the two world wars when the company assisted the American army with 20,000 and 90,000 military standard motorcycles respectively. This was the reason for the survival of the company in 1930, the year of financial depression of the US. The year 1986 made the company to be owned publicly and regain the market shares from rival companies such as Honda and other companies that entered the US market around the 1970s. The company found itself on the New York Stock Exchange in the year 1987. Apart from manufacturing of motorcycles, the company undertakes philanthropic activities such as imparting education, restructuring of community and supporter of art and initiatives to save the environment (Siegal, 2014).
The four brothers William S. Harley, Arthur Davidson, Walter Davidson and William Davidson primarily owned the company and had equal partnership in the profit and losses of the company. The company went public in the year 1986 and the shares were distributed amongst the public. However, the majority of the shares are still held by the family members who were the pioneers of the company (Pacheco & Demczuk, 2015).
The entrepreneurial characteristics of the company are that it is known for the manufacture of chopper bikes. The traditions, habits and the values of the company help in influencing the behaviors of the employees and the managerial decisions. The main characteristics of the company are:
This helps the company to establish themselves in the current US market, as the chopper bike culture is prevalent in those markets. The people in these markets associate the customers of this company as bold and rebellious (Burke, 2015).
The company promotes sustainability in its leadership attributes through entrepreneurial activities. It helps the company to improve the human resource management for sustainable leadership in its organization (Diniz, 2014).
The loan crisis of 2007, crisis with respect to finance in 2008 and the economical crisis of 2009 had heavy toll on the financial statements of Harley-Davidson. The company prior to this was not developing in an efficient manner, which led the company to be affected by the financial turmoil that was happening on a global scale. The financial year 2007-08 saw the company experiencing drastic financial results, for instance, the turnover dropped by 2.31 percent that is from 5,726 million in 2007 to 5,594 million in the year 2008. The net income of the company also reduced by 29.9 percent that is from 933 million in 2007 to 654 million in the year 2008. The market share of the company fell by 25.3 percent that is from 3.74 in 2007 to 2.79 in the year 2008 (Zarco & Ben-David, 2015). The shipment of motorcycles also faced a reduction of 8.2 percent that is from 330,619 units in 2007 to 303,479 units in the year 2008. This led to an increase of 3.41 percent in the credit rate for the Financial Services in the business sector.
In a simpler way, it can be said that the company was losing its market share at a fast rate, which led to an impact on the profit of the company as well. On seeing this, the company diversified its products and entered new markets to increase its profits and create a vast brand image (Lee & Strategos, 2014).
The period of 1970s to 1980s saw the sales drop of the company as the preference of the customers shifted to the cheap imports that were available in the US markets. This made the company to face bankruptcy nearly, as it could not compete with these companies. Though, the company served the US army during the war period, it was seen that the customers who owned a bike of the company were considered to be illogical (Kranz, 2016).
The company thought of a new business model where they would consider the feedbacks of the customers. This gave the company an opportunity to understand the problems of the customers and change their approach accordingly. When the company started to incorporate these changes in their models, the customers started to notice these new models and once again, the company was gaining lots of attention from the media as well. In this way, the company managed to attract few customers but it did not achieve the target that it wanted (Gassmann, Frankenberger & Csik, 2016).
It again changed its business model by allowing people to test drive their models. The company took their new bikes to the rallies where the people criticized the company earlier. They allowed the people to ride the new models for fifteen miles if they flashed their driving license. This made the people realize the artistry of the bike and the result was amazing for the company. The distinctive noise of the bikes made the sales propel up for the company as the people showed keen interest in purchasing the new models (Kranz, 2016).
This initiative was taken up by the company because of the increasing awareness among the masses with respect to the pollution in the environment and the elimination of carbon emissions from different vehicles. The company took it as an advantage and manufactured environment friendly motorcycles, which aroused the interest of the customers (Rapaccini & Visintin, 2015).
This strategy was taken up by the company to minimize its risk and increase its revenues by selling the products in new markets available on a global scale. This led to avoiding the financial crisis and the fluctuations that it faced in its parent country that is USA. The Japanese competitors were able to minimize their risks because of the operations that they had in different countries (Adams, 2016).
The company shifted its focus on manufacturing lightweight motorcycles, which ranged from 110cc to 450cc. products. Earlier, it used to manufacture motorcycles that ranged from 800cc to 1800cc, which attracted only a specific customer base. Due to the change in its production line, the company was able to attract customers from all sections. It also included the launch of hybrid motorcycles, which attracted customers who wanted ecologically clean products (Rapaccini & Visintin, 2015).
The strengths of the company are that it has strong brand image in the market, which helps in selling the products at a faster rate. It also has the support of the loyal customers that keep track of the new products that are being launched by the company on a regular basis. The company has mastered the art of customizing the chopper style of motorcycle production, which is unique to them and gives them a competitive advantage over the rival companies (Das, & Ara, 2014).
The narrow product mix of the company prevents the company from reaching more market segments. The company also has this weakness of selling most of the products in North America, which leads to profits being stable. The company has no significance in the developing countries where the company can make a market for itself. The limited supply chain of the company has hampered the expansion of the company on a global scale in the motorcycle market (Beqiri, 2014).
Harley Davidson has the opportunity to expand in the developing markets if it expands the product mix, which will include a diverse range of motorcycles and products related to it. The company has the opportunity to merge with other established business, which will increase their reach in the market (Das & Ara, 2014).
One of the major threats of the company is the aggressive competition that is present in the world with respect to two wheelers. Some manufacturers such as Toyota manufacture and sell low-cost motorcycles with the same specifications that are offered by Harley Davidson. The company also faces a threat of being imitated as many other companies are offering custom chopper bikes presently. The conservation of the environment poses great threat for the company because it is known for the internal combustion engine for producing the familiar noise for which the company is famous (Beqiri, 2014).
The image of the company represents freedom and independence, which is liked by the Americans very much. The symbol of the company includes an American flag and an eagle that represents passion and freedom that the Americans like to enjoy. The average buyer of Harley Davidson ranges from a blue-collar person to a top executive who has his organization on a global scale. Harley unlike its competitors does not promote technology and features on the product instead they promote the feeling of riding free and owning the motor (Babin & Zikmund, 2015).
The company maintains strong bond with the customers that is when a customer buys the product they automatically become a member of Harley Owners Group (HOG) for a year that was developed in 1983. The program currently has 295,000 members across 900 local chapters and is one of the largest company-sponsored groups of enthusiasts. The rallies encourage people to share their excitement of riding the motorcycle with others (Whiting & Deshpande, 2014).
Since the motor company is a public company, the public interprets and changes the performance of the company periodically. The company does not try to hide any information, which may hamper the relation with the investors. If some areas of the company are not progressing in a proper manner, the company will discuss it with the investors and will strategically plan to improve those areas that may result in a desirable result. The company is effective in handling its relations with the investors because of the tactics that it uses to control the media. The official site of the company provides all the information regarding the press releases, annual reports, teleconferences and events related to shareholders (Sheth, 2017).
The company keeps the official website of the company updated on a regular basis so that the customers are aware of the latest products of the company. The company maintains a good relationship with the customers, which helps in increasing the sales of the company. The introduction of the V-rod product in the market has helped the company gain a sizeable share in the market and grab the attention of the customers online. The diversification of the products that the company has undertaken has helped the customers to know more about the company from the official websites. The company updates the customers about the rallies that will happen so that they can join and share the excitement with others. The online activities that the company undertakes have helped to attract young customers in trying out the products as well (Babin & Zikmund, 2015).
The company mainly carried its operation in United States, which proved fatal due to the financial fluctuations in the country. The increasing competition in the country led to the sales being dropped of the product of the company. To overcome the barrier in competition, the company decided to try out the international markets in Europe, China and the Scandinavian countries. It turned out to be profitable for the company as it was seen that the progress in those countries were more than the parent country. The company had a rise in the shipments from 2 to 4 percent in the year 2015 and is expecting to increase the shipment by 4 percent in the current year. The company then expanded its business in Latin American countries especially Brazil where the market proved to be promising. The company however failed to tap the resources that were available in the developing countries, which could have increased the profit ratio of the company. On realizing the opportunity that they had in these countries, the company started to sell its products through a third party supplier (Schlegelmilch, 2016).
Reference List
‘Rapaccini, M., & Visintin, F. (2015). Devising hybrid solutions: an exploratory framework. Production Planning & Control, 26(8), 654-672.
Adams, N. (2016, June). New approaches to multicultural marketing: Examining the communication strategies used by multicultural marketing agencies. In 4 th International Conference on Contemporary Marketing Issues ICCMI June 22-24, 2016 Heraklion, Greece (p. 257).
Babin, B. J., & Zikmund, W. G. (2015). Essentials of marketing research. Nelson Education.
Beqiri, G. (2014). Innovative business models and crisis management. Procedia Economics and Finance, 9, 361-368.
Burke, R. J. (2015). The Changing Faces of Leadership [dagger]. Effective Executive, 18(4), 7.
Das, K. K., & Ara, A. (2014). ‘Harley Davidson’Success Speaks-Brand Image and Culture: An HR Perspective. Bonfring International Journal of Industrial Engineering and Management Science, 4(2), 48.
Diniz, C. (2014). Participating in the Market as Entrepreneur or Employee. In The Luxury Market in Brazil (pp. 148-164). Palgrave Macmillan UK.
Gassmann, O., Frankenberger, K., & Csik, M. (2016). Innovation Strategy: From new Products to Business Model Innovation. In Business Innovation: Das St. Galler Modell (pp. 81-104). Springer Fachmedien Wiesbaden.
Kranz, M. (2016). Building the Internet of Things: Implement New Business Models, Disrupt Competitors, Transform Your Industry. John Wiley & Sons.
Lee, Q., & Strategos, P. E. (2014). Lean in hard times.
Pacheco, I. B., & Demczuk, P. G. (2015). The’mototourism’and the wanderlust Harley Davidson lifestyle: a study about the Chapter HOG-The One Curitiba (Paraná, Brazil). Turismo e Sociedade, 8(2), 234-254.
Schlegelmilch, B. B. (2016). Segmenting Targeting and Positioning in Global Markets. In Global Marketing Strategy (pp. 63-82). Springer International Publishing.
Sheth, J. (2017). Revitalizing relationship marketing. Journal of Services Marketing, 31(1).
Siegal, M. (2014). Harley-Davidson: A History of the World? s Most Famous Motorcycle. Bloomsbury Publishing.
Whiting, A., & Deshpande, A. (2014). Social Media Marketing: A Myth or a Necessity. The Journal of Applied Business and Economics, 16(5), 74.
Zarco, R., & Ben-David, M. (2015). Cycle City, Ltd. v. Harley-Davidson Motor Company: Can Statutory Law or the Implied Covenant of Good Faith and Fair Dealing Override Express Provisions of Contract?. Franchise Law Journal, 35(1), 47.
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