Current Strategies of Harley Davidson Essay
Strategy is a powerful process that gives an organization a competitive advantage in the marketplace. A good strategy is one that allows utility of minimal resources on the greatest opportunities to increase sales and achieve a sustainable competitive advantage. A strategy is most effective when it helps in defining how the organization will engage customers, prospects and the competition in the market arena for consistent success. Strategies are mostly derived from broader corporate strategies, corporate missions, and corporate goals. They generally flow from the firm’s mission statement.
The current strategy of Harley Davidson is most evident in its revised mission statement. “We fulfill dreams by providing a unique and expanding line of motorcycles and branded products and services for our customers that wish to seize a piece of American history…. ” This statement shows a concern for survival, growth and profitability. There is the promise of providing the right marketing mix (unique and expanding), quality customer services and continuous growth. These are the premises on which the current strategies of Harley Davidson are based.
Marketing mix Strategy:
Harley has capitalized on the fact its product/image is chic. The company advertises using fashion models draped over the bikes and wearing company T-shirts. Twice a year, a Fashions and Collectibles catalog is produced with various Harley merchandise. Another marketing strategy, Harley-Davidson Cafes, have been opened in or near many dealerships to lure people into the showroom. The dealerships are becoming a one stop shop for bikes, accessories, clothing and financing. As for the product, Harley found its strength was in the heavyweight motorcycles.
They also identified and exploited mini niches, such as customized, touring, sport/touring and sport/street motorcycles, in the heavyweight end of the market. It offers a wide range of models including Sportsters, Super Glides, Low Riders, Softails, Sport Glides, Tour Glides and Electra Glides, in numerous vivid colors (Bruce, 2006). Harley always develops new styles around their signature image to make sure that the product is not only a high quality piece of equipment but is also charismatic. In the context of pricing, Harley developed a strategy of value over price.
This was created through the development of mini-niches and the heavy construction of the parts. Harley was careful not to exceed demand in production of their motorcycles. By not being able to meet demands, an attitude of must-have has developed. Harley-Davidson motorcycles are sold by 1,065 dealers worldwide. The networks of dealers established by HD are placed in areas that provide access to the largest concentration of potential customers. These dealerships are used to distribute products, accessories, and merchandise. The major asset of Harley-Davidson is that the high quality and reliability of its motorcycles.
The company has also developed an interactive website (www. harley-davidson. com). The website gives the company the chance to expand its operations online. Finally, HD’s most important promotional tool is the brand image of a truly American product.
Customer Services Strategy:
When a person buys a Harley-Davidson motorcycle, they receive a free 1-year membership to the Harley Owners Group (HOG), which was developed in 1983 as a program to keep people active with their Harley. It also helps the company to have customer contact.
HOG has 295,000 worldwide members, 900 local chapters and is the largest company-sponsored motorcycle enthusiast group (Bruce, 2006). They conduct four US national rallies, two touring rallies and 44 state rallies. The people are given demonstration rides, have the opportunity to ask questions, register their bikes and buy merchandise. The company officials collect information from their customers at motorcycle events and dealerships and maintain a database.
Growth and Expansion Strategy:
The Company owns 54 percent of the market share in the USA, 16 percent in Japan, 10 percent in Europe, and 38 percent in Australia.
The foreign markets could be larger, but the company has an agreement with American dealers not to sell more than 30 percent of the bikes overseas, if the domestic demand is not met (Bruce, 2006). The global strategy of Harley Davidson seems to be global expansion, global brand development, and global promotion. Brand building had been the secret of success for Harley-Davidson. They built a quality motor-cycle that represented the mood of the times. The publicity campaign of global promotion has already been set in motion through celebrity endorsements and films. Also read Ducati vs Harley Davidson case study
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Their advertising slogan is ‘Not so much a means of transport – more a way of life’. Thus we find that Harley-Davidson’s strategies flow from its mission statement and are built on the framework of a good marketing mix, excellent customer relations and steady consistent growth over the years.
Jeremy Joseph, On the Road Again, Accessed August 2005, http://www. jeremyjosephs. com/harley. htm
Bruce, A. Reginald (2006). A Case Study of Harley Davidson’s Business Practices. http://stroked. virtualave. net/casestudy. shtml