The company logo has come to be associated with a symbol of American individualism. The custom chopper brand is well recognized and has allowed the company to venture into apparel and other merchandise.
Loyal customer base
The corporation has the biggest motorcycle enthusiasts group in the world, HOG, with close to 1 million people. This social organization consists of the faithful believers of the Harley brand and hence provide the company with excellent support and value.
Harley Davidson has more than a century since the company made the first bike in 1903. The many years have built up a wealth of experience which is visible in their uniquely customized motorbikes.
Narrow product line
The company had restricted itself to the production of heavyweight bikes for the rough rider. They neglected the lightweight market claiming that it had no future in the industry. This narrowness cost them their title when Honda became the highest seller in America by capitalizing on this segment.
Limited global reach
Honda and other Japanese companies had dominated the Asian and European markets before coming to America. On the other hand, Harley Davidson generated 80% of their sales from North America. Their presence in emerging markets is ineffective.
Outdated production techniques
The company was spending a lot in production line inventory, unlike the Honda who used the Just-In-Time methods which made bikes to order. The Harley Davidson method resulted in high production costs and inefficiency.
Harley Davidson customers buy the bike for various purposes. Chief among them is the need for a fast and powerful bike to ride on country roads on the weekends. The bikes were even popular amongst highway patrol officers who used them to conduct high-speed chases. Other customers bought the bikes for their stylish customization and association with celebrities like Elvis Presley. The motorcycles became a status symbol of American power and individualism.
Harley Davidson sets itself apart as the provider of premium heavyweight motorcycles. The company believes in this market segment and has concentrated most of its efforts there.
The company is also renowned for its customization techniques. They have hundreds of concepts and ideas for customers to choose from, unlike other companies that have standardized production. The chopper-style is one of the examples of the company's ability to customize.
The corporation has created a social club that brings the motorcycle owners together for races and celebrations. The HOG is an example of how the company has built social capital by keeping the customers engaged in events. These groups support the social community and culture of Harley Davidson
Opportunities and Threats
There are several opportunities in the future for the American corporation.
Harley Davidson has traditionally been concentrated on the North American market with numerous dealerships. The company is yet to venture into emerging markets sufficiently. Places like China have failed to identify with the heavyweight motorcycle and rugged culture. The company ought to capitalize on its global brand recognition.
The entry of Honda in the American market was successful due to their focus on the lightweight market that made motorbikes accessible to a broader demographic. Harley managers have the opportunity to venture into the light market and capture more customers who identify with the brand. The company has traditionally focused on older white males, and hence they can diversify their range of products to reach other people like women and people looking for convenience.
Harley Davidson has registered significant amounts of revenue by licensing its brand to other companies. It makes the brand accessible to all people including those who dont own bikes.
Other companies are busy making motorcycles to satisfy the low-end market. Cheap and fuel-efficient bikes have proved successful in emerging markets in Asia and Europe. Honda and other Japanese makers are dominant in America and Europe while China is littered with major manufacturers like Lifan.
Harley Davidson has experienced significant challenges in navigating the Chinese market. The laws result in substantial additions to the total cost of production which is passed to the customers. The products become prohibitive due to the high prices thus they lack market penetration.
Other companies are making models that resemble Harley Davidsons chopper due to its considerable pull on bike lovers. This trend is likely to cut in further on the companys revenues.
Harley Davidson stands at a significant point where the managers must make radical strategic decisions on how to run the organization. They must decide how to keep up with the competition by scattering to the primarily ignored lightweight market.
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