Harley Davidson

PRESENTED BYAKSHAYA MALI

Overview
Started with William Harley, alongside Walter and Arthur Davidson opening a factory. These men tried selling their newly invented motorcycles to the masses. Harley Davidson began selling the bikes recreationally. After WWII, it became a mode of transport and a way to relieve stress among many. Initial image of Harley was a happy all American one until a motorcycle riot took place, which changed the way bikers were being viewed forever. The newly developed class of more affluent riders have nearly pristine riding gear that displays some sort of Harley-Davidson logo as often as possible.

ANSOFF MATRIX

Market Penetration
Despite the fact that in 2009 Harley-Davidson occupied 57.8% of the US motorcycle and scooter market in the UK, they only managed to occupy 4.5% of the market according to Mintel 2010.

Due to their exceptional reputation in the industry and the power of the Harley-Davidson brand, it is possible for the company to gain further share not only in the UK, but other existing markets such as Asia and India. Currently, due to riding restrictions in larger cities, Harley-Davidson are slowly managing to gain market share in China.
In 2010 The company established a subsidiary, Harley-Davidson India, in Gurgaon, near Delhi, in 2011, and created an Indian dealer network.

Product Development

The product development transformation focused on key areas such as reducing the time taken to bring new products to market through lean product development techniques. Developing products that appealed across generations and cultures, and increasing production capacity by using best-in-class planning systems. Through the option of H-D1 factory customization customers could design a Sportster 1200 online, order it through a dealer, and get it built it at the factory.

With celebrities such as Bruce Willis, Brad Pitt and Vin Diesel riding Harley-Davidsons, the brand and image attached to riding a motorcycle has begun to appeal to the younger generation.

Continued
The company employed Rich Christopher in 2007 to design the Harley XL 1200N Nightster, a bike that had enough attitude to lure younger riders . However, it must be said that the majority of individuals that fall into the above age bracket, have student debts attached to their names and a financial inability to pay for a bike on finance, thus purchasing a Harley-Davidson not always possible. Also high youth unemployment is keeping many first-time riders out of the market. In an attempt to successfully target the younger generation, HarleyDavidson could provide a financial scheme for young riders or graduates, whereby interest rates are low and affordable.

Market Development
Significant opportunity for Harley to increase its sales in Latin American regions, Europe, Japan, China, India, and other emerging markets by strengthening its operations and regional teams in these regions.

In 2009, Harley-Davidson announced their plans to enter into the Chinese market. Through their alliance with Zongshen Motorcycle Group, they are looking to overcome potential obstacles present in trying to break into the China. In 2010, Harley established dealer points in 13 developing markets including India, Russia, Mexico, Turkey, Jordan, China, and Ecuador.
The company also opened regional headquarters offices in Singapore for the Asia Pacific region and in Miami for the Latin America region.

Horizontal Diversification
HD has acquired Buell Motorcycles and Eaglemark Financial Services, in order to provide new product lines for their customers. Buell was acquired in order to be able to provide customers with a V-twin powered Sport motorcycle. This type of motorcycle has become increasingly popular with the younger and European riders. Eaglemark provides motorcycle financing, motorcycle casualty insurance and extended service contracts for HD and Buell motorcycles. They also issue the HD Chrome VISA Card, allowing riders and customers to show their brand loyalty

PESTLEE ANALYSIS

Political

The main political issues that Harley-Davidson faced are the import/export rates on their products. Import taxes have both advantage and disadvantage for the company. Advantages: By petitioning the restriction of Japanese models coming into America in the 1980's it meant they had more leverage over other competitors and could compose itself in the American market once again (Harley-Davidson, 2009b). However, by establishment of 100% import tax, the cost of the bikes for the market will be too much for some. Harley-Davidson have ambitions to enter the Chinese market, however currently face Chinese political issues as motorcycles are prohibited in 170 of its cities and obtaining a motorcycle licence costs time and money

Economic

Confidence in economy is directly proportional to the purchasing of consumer items. Increase in the price of many key raw materials in manufacturing such as increase in the prices on steel and aluminum which increases the cost of production. Increase in oil prices. Decision to expand its presence in the international markets as slow economic growth had curbed the demand for high end motor cycles in US.

Social

Average purchaser of a U.S Harley-Davidson motorcycle is a married male in his mid-forties. Average purchasers of a U.S Harley-Davidson have a household income of $78,600. 30% of the Harley-Davidson buyers have college degrees. Only about 11% of Harley-Davidson U.S retail motorcycles are to women. Changing consumer demographics. Efforts to attract riders outside of its main demographics. One of the biggest challenge for the company is to increase sales by attracting young riders without alienating its traditional customer base. Most Asians consider motorcycles as a basic means of transportation.

Technological

Harley-Davidson is one of the main manufacturer and user of VENGINE configuration. Harley-Davidsons have a wide variety of products according to Standard, Performance, Touring & custom. More technological advancement required as customers are looking for energy efficient and technologically advanced bikes now a days.

Legal

Harley-Davidson is facing some legal problems in Asian countries, in India there is 60% tariff and various other taxes will cause the price of the bike to double. Noise pollution and some emission standards of Harley-Davidson bike is not up to the level of some countries across the globe. About 100 cities in China, including Beijing and Shanghai, have restrictions that include banning two-wheel vehicles from elevated highways and major thoroughfares to curb noise and thefts, according to the state-affiliated Society of Automotive Engineers of China.

Environmental

Focus on reducing the environmental impact of its operations throughEfforts to reduce waste. Increase recycling. Reduce water use.

Reducing energy use and associated greenhouse gas emission.( companies greenhouse gas emission dropped 40% from 2004 to 2010)