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Different Strategy Development At Harley Davidson Business Essay

Harley-Davidson used Myerson game theory to gain a competitive edge over its Japanese competitors. This theory can be involved about the interrelationships between the competitive moves by a set of competitors. Hence the move by Harley to partition the US government to impose a 40% tax on imported motorcycles.

Global Strategy

Harley-Davidson has been a major US maker of motorcycles and the country's top seller of heavyweight motorcycles. With a product offering of more than 30 models of touring and custom built Harleys, through a worldwide network greater than 1, 300 dealers. The company manufactures and markets five families of motorcycles: Touring, Dyna, Softail, Sportster, and VRSC. Additionally, their strong applied research and development strategies have allowed them to manufacture three-wheeled motorcycles. Harley sells attitude and culture using its brand-name products which allow customers to feel a greater part, ownership, belonging and empowered when they use their products. Harley's distribution network allows for their products to get to the market quickly.

This strategy has determined Harleys' future opportunities and strategies for example, their entry in to the India market. Their design and manufacture of motorcycles which appeal to women coupled with their additional and diverse product line in clothing fitted to bikers and also other products which can appeal to a diverse market which includes people who do not own and could never own a Harley.

Acquisitions

Their acquisition of Buell Motorcycle Company was also a strategic move as it allowed the business to enter a segment of the marketplace that was untouched by them, through Porter's low cost strategy, zero-maintenance motorcycles which were appealing economically and environmentally. Because of this Harley was poised to take pleasure from economies of scale since they could actually increase production while lowering the price per unit of production as Harley and Buell could enjoy synergies from the acquisition as surplus engines from Harley was able to be used by Buell. By acquiring Buell, Harley was able to build rather than buy market share.

However, because of this of the global recession of 2008 the synergistic alignment enabled the business to continue to manufacture their low-cost single-cylinder Buell Blast. Harley benefited from the integration as they were better in a position to respond to the marketplace need and demands. Because they were/are able to adapt to market changes and improve efficiency in the manufacturing, design and safety features.

Consequently, Harley divested MV Augusta that they acquired in 2008, this divestment can be credited to the effects of the recession as the business was also experiencing a financial crisis. By selling title and ownership they were poised to target and implement strategies which allows them to keep competitive leadership.

Through Ansoff's product-market growth strategy matrix, Harley-Davidson penetrated new markets as they sought to expand by partnering and engaging with dealers across the world, to fully capture new markets with the Buell product offering.

Through the acquisition of MV Augusta Group Harley-Davidson was further allowed to capitalise on Ansoff's product development strategy where they entered new markets with a new light-weight motorcycle. This product was particularly attractive to women cyclists given that they were better able to independently control the machine.

To survive the depression of the 1930's Harley-Davidson diversified to motorcycle engines to be able to capture new untouched segments of the marketplace. Diversification according to Ansoff identifies a strategy where is pursued by an organisation through its new product offerings which allows these to enter new markets.

This strategy enabled Harley-Davidson to increase their market power and gain greater efficiency as sales increase there is more profits which enabled them to invest in better technology, research and development.

In 1907 Harley captured the emergent market being the police department as they were venturing into motorcycle patrol as a result they were in a position to penetrate the forex market which before did not exist.

ENGINE TYPE

YEAR

DETAILS

FLATHEAD

1909-1936

Had a displacement of 45 cubic inches (742 cc) and produced about 22 horse power

KNUCKLEHEAD

1936-1947

The Knucklehead was mainly developed and used through the wars.

PANHEAD

1948-1965

This vehicle engine was 60 cubic inch (990 cc) and 74 cubic inch (1200cc), which produced 50 and 55 horse power.

SHOVELHEAD

1966-1983

Displace 74 cubic inches (1200 cc) and produced 60 horsepower.

EVOLUTION

1983-1966

The Evolution was the first motorcycle in a string which manifest improved quality following the acquisition of AMF. These vehicles did not leak oil and the displacement was 81. 8 cubic inches (1340 cc) and produced 70 horsepower.

TWIN CAM 88

1999-PRESENT

The Twin Cam 88 has an engine of 88 cubic inches (1450 cc) displacement, producing 80 horsepower. These engines remain air cooled and overhead valves are widely-used.

REVOLUTION

2001-PRESENT

This engine is presently being found in only 1 Harley product, the VSRC. It is 60 degrees, with overhead cams, fuel injected and only 69 cubic inches (1130cc) production 115 horsepower.

Through the process of diversification Harley-Davidson was able to reengineer their products to meet and satisfy the changing needs and demands of the market and therefore they have been able to penetrate and capture new markets that have been once untapped.

Harley have had the opportunity to overcome their once tarnished reputation of unfair business practice as a result of the application to the united states Tariff Commission for a 40% tariff to be imposed on imported motorcycles into the US.

Harley utilizes personnel selling and advertising for their promotional mix in getting the merchandise to their customers. They also target various segments of the market by advertising in national magazines such as Road & Track, Popular Science, and Fortune as well as specific motorcycle magazines such as Easy Rider. Additionally, Harley uses personnel at their 595 dealerships located throughout the United States to get the merchandise to the buyer as a when they are required. Harley uses publicity and public relations to gain a far more positive

image for the business. Celebrities such as Jay Leno and Wynonna Judd are engaged in the company's promotions enjoying riding motorcycles and wear Harley-Davidson apparel.

The conduct of an SWOT analysis would reveal Harley's customer loyalty to the company's brand that was strength for Harley and a threat with their competitors. Harley offers all its products on-line where they could be delivered through-out the earth. Online skilled rider courses are also offered, parts are custom-made to suit the needs and taste of their individual customers thus creating the ultimate ride.

CORPORATE-LEVEL STRATEGY

Their Corporate-level strategies focused on the strategic scope of the whole enterprise. Harley's strategies included the company's decision to enter niche markets, acquisitions and the entry into new geographic markets with new and innovative products. This also contains their staffing issues were 440 employees were retrenched, their decision also to outsource also contributed to the business's cost leadership position. Furthermore, their market diversification to strategically penetrate the India market over an interval of twenty to five years that have been protecting their local Indian Tata Nano market. Their corporate strategies implemented under the business's leadership of Richard F. Teerlink the former CEO, Harley has also been able to market gift items ideal for women, men, youths making them a one-stop surprise shop.

The underlying premise of Harley's focus strategy is that the firm is better able to serve its segment than its competitors serving a broader range of customers being that they are better positioned to find out, anticipate and gratify the changing needs with their customer. Harley has had the opportunity to differentiate them predicated on meeting customer needs through their differentiated, low costs and competitive pricing for specialty goods.

Their corporate strategies represent the long-term direction for the business which has gone to become the top motorcycle manufacture in the world.

Why have Harley-Davidson been more or less successful in their strategic planning approach?

Portfolio Matrices

Growth/Share (BCG) Matrix

Issues addressed as part of a company's corporate strategy includes diversification, acquisition, strategic alliances, and formulation of home based business ventures. The corporate strategies implemented at Harley incorporate their plans for the whole organization and change to be industry specific market such as manufacturing motorcycles that are light-weight and fitted to women. The BCG matrix classifies business-unit performance based on the unit's relative market share and the rate of market growth.

Products and their respective strategies get caught in one of four quadrants. The typical starting place for a fresh business is really as a question mark. If the product is new, it does not have any market share, but the predicted growth rate is good. What typically happens within an organization is the fact that management is confronted with lots of these types of products but with too little resources to develop all of them. Thus, the strategic decision-maker must determine which of the merchandise to try and develop into commercially viable products and which ones to drop from consideration as Harley did with the Buell Blast. Question marks are cash users in the business. Early in their life, they contribute no revenues and require expenditures for market research, test marketing, and advertising to construct consumer awareness.

If the right decision is made and the product selected achieves a high market share, it becomes a BCG matrix star. The Harley-Davidson company comprises of multiple sections, its corporate strategy centered on decisions which can increase sales and allow the company to gain competitive advantage by maximizing the potential of their core competencies and the resources both financial and non-financial.

As stars have high market share in high-growth markets they generate large cash flows for the business enterprise, nonetheless they also need large inputs of finances to maintain growth. They required large expenditures to promote, research and development continuously enhance the product which would permit it to determine a dominant position on the market. The business's strategic arrangement with the US Army together with the exceptional features and functions RoadKing and Sportser allowed the business to gain high market share and high market growth.

The diversity of the products is considered in conditions of its related and unrelated diversification. However, performance at the business level of the company suffered resulting in workers striking consequently the business was then sold to thirteen investors strategically lead the business.

The "Fat Boy" though in the 1990's was a market leader and cash cow for Harley however, its market share was high and low-growth as the merchandise reaches its maturity stage of the product life cycle. This product was a well-established product with wide consumer acceptance and therefore sales revenues were high.

The strategy for such products is to invest little money into maintaining the product and divert the top profits generated into products with more long-term earnings potential, i. e. , question marks and stars which Harley did with their FXR models.

Dogs are businesses with low market share in low-growth markets. These are often cash cows which may have lost their market share or question marks the business has elected never to develop. The recommended technique for these lenders is to dispose of them for whatever earnings they will generate and reinvest the money in more attractive business such as into the Fat Boy.

A more stringent approach, but still one with weaknesses, is a competitive assessment. A competitive assessment is a method for ranking an organization in accordance with its peers on the market. The advantage of a competitive assessment on the BCG matrix for corporate-level strategy is usually that the competitive assessment includes critical success factors, or factors that are necessary for an organizational to prevail when all organizational rivals are competing for the same customers.

Porter's Diamond

Porter's Diamond shows that the reason why are inherent why some countries tend to be more competitive than others, and likewise why some industries within particular nations tend to be more competitive than others. That is evident in Harley's case as the US army chose to support their local industry to provide them with motorcycles during the world war. There is also what appears to be a lifelong contract with the authorities department to market motorcycles to them.

Trade embargo was also imposed by the government to protect Harley from competitive rivalry using their company greatest competitor Japan and this helped Harley in building brand. Harley also created a false demand for his or her product by creating an artificial shortage.

Global sourcing

Global sourcing refers to purchasing services and components from the most appropriate suppliers surrounding the world irrespective of their location.

Harley source it component parts where the cost is cheaper and more affordable and therefore they were able to provide motorcycles at affordable and cost efficient prices. Because of global sourcing of component parts Harley could ensure that parts were always available when and where they were required.

The internationalization is potential of Harley is clearly determined and measured by the following factors. Harleys market has been diverse, comprising of a broad global demographic, their products have been design for the comfort, safety and enjoyment of both their male and female customer base. Harley has developed and implemented a differentiated strategy where their prices and product offerings have been attractive and affordable to all or any income brackets.

The company has already established the favor of the US government and the loyalty with their customers, based on the support that they have given to the US through the war. However, countries such as India have imposed tariffs to safeguard their own local industries from large multi-national companies. However, to strengthen their competitive ability, Harley diversified its products to attract new markets, acquired other companies which allowed them to get financial strength by capitalizing on the financial resources and gaining access to markets which the company were unable to before.

Internationalization according to Barlett and Ghoshal relates to the various structures for multinational companies. Harley's global strategy and its own resources of competitive advantage that Harley gets from being truly a transnational company are its efficiency through its manufacturing processes which permit it to enjoy economies of scale and develop a reputation to be envied by its competitors.

The internationalization of Harley's motorcycles has an uncertain relationship to financial performance as forex rates may fluctuate producing a lost to the company if the exchange rate is decreased in the business that they export to.

To acquire and keep maintaining first-mover advantage Harley has been able to continuously revitalise its products to meet and gratify the changing need and taste of the customer base. Through research and development the company has been able to keep one step ahead of their competitors, inserting at a much better off than their rivals therefore to be first to advertise with a fresh progressive product.

Harley's global strategy works because they have got a solid global distribution network which ensures an efficient and speedy distribution of motorcycles to customers. Together with the emergence of the internet a customer can stay static in Trinidad and buy a motorcycle from anywhere in the world.

GROWTH STRATEGIES

Harley's growth strategies are designed to expand performance which is usually measured by the degree of sales, profits, product mix, market coverage, market share due to trade embargoes.

Diversification strategy involved the business entering different markets by adding different products to its marketing mix. Harley's products are targeted towards all members of the family and are related to existing product offerings.

RETRENCHMENT STRATEGIES

Harley's retrenchment strategies involve a reduction in the scope of the organization's staff number by 440 in 2007 and the sale of assets associated with discontinued product or service lines, consequently Harley sold MV Agusta in 2010 2010.

FUNCTIONAL-LEVEL STRATEGIES

The functional-level strategies of most organizations are worried with the coordination of the functions of the business that happen to be marketing, finance, human resources, production, research and development, etc. This area upholds and plays a part in individual business-level strategies and the entire corporate-level strategy as it means that set goals and objectives are achieved.

At Harley employees' involvement are critical to the accomplishment of the business's vision and mission and therefore Harleys has cultivated the imagination of their workers. Employees aren't treated as machines but permitted to be impressive and involved in the creative development of the business. This Accenture Human Capital Development Framework (HCDF) was first implemented in 2004 and reintroduced in the business in 2006. Harley also partnered with the union which strategy allowed for change to be flexible, this is an essential component in motivating employees and encouraging them to buy-in to any change in strategy which management wanted to implement at Harley. The strategy resulted in a motivated workforce who felt a feeling of belonging and ownership. The company encouraged a democratic style leadership instead of a dictatorship, through greater employee participation and collaboration as explained by: Teelink (2003)

"The biggest takeaway [to my experience in a circle organization] is the fact that. . . [positive] change will happen as long as you don' try to force it your way. If you lead participative change, it'll work. "

Harley fosters a culture of team-building which ensures that employees are focused and motivated towards attaining the corporate goals and objectives of the organization.

Employees are also motivated and encouraged to create as they have got stock ownership this strategy gives employees a sense of belonging and they are incredibly important and mixed up in organization and are prepared to embrace changes within the business without resistance.

These initiatives were adopted because the business's new management recognized that to survive in an extremely competitive and global market it was critical to help make the company a continuous learning and enhancing organization where communication is open and free throughout the hierarchy of the organization. Employees must recognize and fully comprehend their job functions and its importance to the efficiency in the manufacturing process as well regarding the long-term survival of the company.

Harley made significant progress at surpassing their internal benchmarks with the implementation of HCDF as employees' performance and output improved and increased. Thus performance is now able to be measured by a balance scorecard.

Balance Scorecard

Balanced Scorecard is something used to measure a companyHYPERLINK "http://www. coursework4you. co. uk/essays-and-dissertations/analysis-of-companies/analysisofcompanies. php"'HYPERLINK "http://www. coursework4you. co. uk/essays-and-dissertations/analysis-of-companies/analysisofcompanies. php"s activities in terms of its vision and strategies, as a gives managers a thorough view of the performance the business enterprise. This process to strategic management originated in the first 1990s by Kaplan and Norton. This system allows organization to visually clarify their vision and implement strategies which can improve organizational functions.

Harley's study the logistics of building and selling motorcycles in the first 1980's, when it was near bankruptcy. Harley's balance scorecard review the procurement process, inventory stock theory and practice, and the parts marketing process to ensure a holistic, end-to-end supply chain management to supporting the business vision which ensures that the company's products reached its customers. Through performing an intensive study with their entire supply chain, Harley Davidson's logistics personnel have been able to define, measure, and enhance their processes in order to boost efficiency in manufacturing process. A prime corporate decision was introduced to reduce the amount of suppliers from 500 to 200. An inferior supplier base made quality improvements better to implement and facilitated the detection as there is increase standardization of process and procedures, tracking, and resolution of quality problems.

Conclusion

The success of Harley can be contributed to the executive management team which includes taken strategic initiatives including the investment in their recruiting, by empowering them to address the weakness from the Company. This investment has also given Harley a competitive advantage in the motorcycle industry. THE BUSINESS has exploited the opportunities in its external environment to build new revenue streams for itself.

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