Harley Davidson International Management

I. Summary of the case study "Harley-Davidson - rockers' idol"

So, this case study is about Harley-Davidson, a brand of motorcycles and more precisely about its development since his foundation in 1903 by 21-year-old William S. Harley and 20-year-old Arthur Davidson.

So, in 2003, it was the celebration of the 100th birthday of the Harley-Davidson. And, in order to commemorate it, fans of this famous brand rode until Milwaukee to see the parade of 10 000 Harley-Davidson motorcycles. Through this celebration, we can see how recognized this brand is for the owners, or should I say fans. Indeed, this case also shows how the strategy and the marketing of Harley-Davidson are good; because Harley has fans and they will do all they can for their bikes and their brand.

For its 100th year, Harley Planned for selling 290 000 bikes. And in 2002, the firm reported a gross profit of US$ 1.4 billion on US$ 4 billion sales.

But, its history has never been so easy. Indeed, after 50 years of growth destroying the local competition in the US, Harley has known almost 20 years of hard competition in his market, and especially with Honda. And seeing a deterioration of its market share (only 30%), Harley has decided to abandon overseas markets. 1969 saw Harley-Davidson merge with the American Machine and Foundry Company (AMF). The merger would last until 1981, when 13 senior executives from Harley Davidson buy back the company. After the buyout is made official, the phrase "The Eagle Soars Alone" becomes a rallying cry.

So, this merger has ensured Harley-Davidson to continue its development and its improvement, and succeeded its come back in the first line. This new team achieved this thanks to a good marketing strategy, in other words creating customer value. This new strategy has ensured to create the feeling for the owners to belong to a family, such as the Harley Owners' Group. One of the key issue of the new strategy is thus to accord importance to fidelity.

The most interesting point of this case is that Harley has different marketing strategy according to countries. Indeed, in some markets (US, Australia, Japan, Spain, Denmark) Harley-Davidson tries to attract new customers using advertisements, but in other markets such as the Europe, the strategy is more the usage of the promotion in specialized magazines. Another interesting point is that the Harley's market shares in Europe in very low although the Europe market represents 35% of the worldwide large motorcycle market.

This case study shows too that Harley's customers are not the "metal bikers" customers who used to be in the past. Indeed, Harley-Davidson attracts now more profession such as lawyers or doctors about 45 years with a medium income level. And, according to customers, buying a Harley-Davidson, it is like a dream and the possibility to be a part of the myth. The dream is about to escape the bored life riding a Harley-Davidson which is relaxing.

But, the brand stretching strategy of Harley-Davidson didn't have the expected effects. Indeed, products such as wine and cosmetics (with a partnership with L'Orйal) have not a high volume of sales. However, products such as leisurewear and fashion ranges feel better.

So, the main issue of this case study is to know why Harley-Davidson has chosen different strategies according to markets, understand the idea of the brand stretching strategy of Harley-Davidson, and also to give some recommendations and ideas for the marketing strategy of Harley-Davidson.

II. Strategy of Harley-Davidson

1. Marketing environmental analysis

First of all, Harley-Davidson has realized since the 80's an impressive marketing strategy giving to Harley-Davidson a brand name more than ever recognized, even compared to its first 50 years.

Indeed, the strategy was not to focus on reducing the costs, or on the distribution improvement, but the main element was to create customer value. In other words, H-D's will was to give more credibility, trust, safety, desire, quality of product and service, and thus fidelity to its brand.

And in order to reach that goal, H-D centralized its marketing on these topics, creating for example a Harley Owners' Group who rallies more than 900 000 members worldwide (www.harley-davidson.com). The main interest of this group is to ensure members to know each other, and become a second family who share the same interests, wills, and thoughts. And this strategy ensures Harley-Davidson to maintain a strong relationship with its customers, and thus a strong brand name all over the world. According to customers, the owners of H-D say that this brand understand them and their needs, and also that they are always there if a problem appears. These remarks can be linked with Harley-Davidson's values. Indeed, according to H-D "Our values are the heart of how we run our business. They guide our actions and serve as the framework for the decisions and contributions our employees make at every level of the Company."(www.harleydavidson.com); these values are:

Be Fair

Tell the Truth

Keep Your Promises

Respect the Individual

Encourage Intellectual Curiosity

We can also link this strategy with the mission statement of Harley-Davidson:

"We fulfill dreams through the experience of motorcycling by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments"

Harley Davidson Inc.

So, through these first elements of explanation of Harley's success, we can clearly see what Harley-Davidson's strategic objectives are. Indeed, in order to be successful, organizations must determine clear financial and strategic objectives. Thompson-Strickland, in his book ("Strategic Management", eleventh edition), outlined a number of strategic performance objectives and Harley-Davidson applied some of these. Harley-Davidson focused on gaining a greater market share, achieving higher product quality than rivals, maintaining a stronger reputation and a better branding strategy than its competitors, increasing levels of customer satisfaction and finally attaining stronger customer loyalty.

Thanks to the establishment of the strategic objectives of the company, managers can decide what the main goal of the company is, and therefore decide