Strategy Analysis of Harley Davidson Unit
StrategyAnalysis of Harley Davidson
HarleyDavidson (HD) is one of the most recognized brands in the motorcycleindustry globally. The firm has over 100 years of experience inmotorcycle manufacturing. It is headquartered in Milwaukee,Wisconsin, USA and has operations in Europe and Asia. Other thanmanufacturing motorcycles, the firm markets associated brandedmerchandise and also offers financial services for financingdealerships and retail clients. This product range has seen the firmperform significantly well until the 2008 global recession thatforced the firm to re-strategize to fit into the new businessenvironment. This paper assesses how the firm’s new long-termstrategy addresses markets needs and segments the market.
Thenew strategy called “delivering results through focus” waslaunched in 2009. This new strategy sought to adapt flexiblemanufacturing, being more effective, continuous improvement and arenewed focus on customer needs. This is not unique to the firm.Schiffmanand Kanuk (2010)acknowledge that firms usually reinvent themselves to respond tochanging business environment usually after major events that maketheir previous business approach ineffective. In the case of HD, thisnew strategy was launched in 2009 after the 2008 financial crisis.The strategy bore immediate results with net profit for the 2011fourth quarter hitting $105.7 million compared to a net loss of $46.8million in the corresponding period the previous year (Masseeha &Purkayastha, 2014).
Concentratingon the firm’s key strengths has been central to the HD’sperformance. The brand represents raw power, adventure, fun and heavycustomization. This has been critical in allowing the firm to adaptan effective market segmentation strategy. Lamb et al (2010) definesegmentation as the grouping of consumers into large unique groupsaccording to several matching needs and characteristics. This allowsfirms to target these groups, henceforth called segments, as one unitpossibly through a unique product set or an integrated marketing andcommunication approach. For instance, baby boomers that form a uniquesegment of the HD market are unique in their demand for raw power intheir motorcycles while the youth are into more sporty bikes(Masseeha & Purkayastha, 2014).
Thefirm has thus launched lighter sports bike variants to serve youthfulriders. This market segment is however, highly competitive withEuropean and Asian motorcycle brands that have flooded the US marketdominating in this category. They include BMW, Kawasaki, Honda,Suzuki and Yamaha. HD management has thus had to conform to industrystandards being set by these foreign models and at the same timeretain the brand identity and meet customers’ specific expectations(Lamb et al., 2011).
Thefirm has used various factors to segment the market to meet specificneeds. New niche market segments that the firm has identified in therecent past through the new strategy can loosely be identified assports bike enthusiasts, luxury riders, fuel efficiency enthusiasts,female riders and high performance sports bike. In short, seatheight, age, sex, ethnicity, and engine capacity are some of thefactors used to identifying specific market segments in the US andforeign operations (HD bids 2014). In the case of HD, the ethnicityfactor is critical unlike other market segmentation factors as thereexists a close relationship with different ethnic groups andconsumption appears to have taken ethnic lines and even createdsubcultures. However, identifying these market segments alone is notenough (Lamb et al., 2010). Firms must develop unique products thatmeet the specific needs of these market segments. HD has achievedthis through various models and on top of that allows for productcustomization to meet personal preferences which allows premiumpricing (Schiffman& Kanuk 2010).
Fromthe above case, it is clear that HD has optimized market segmentationand product differentiation well. The firm has reaped the benefits ofa strategy that recognizes different needs of different sections ofthe market. Each market segment thus draws optimal utility from a HDproduct.
Harley-Davidson`sBid In The Growing Luxury Motorcycle Market In India (3/18/2014).Forbes.
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