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. These are things that the company does well or is perceived by those outside the company as being well done.
Harley-Davidson has a lot of strengths that it can rely on. Each of it is strong and makes the company stand out from the competition. Strength One of the company’s greatest strengths is its brand name. Although the company does not invest heavily in advertising, it is still one of the most commonly recognised brand names in the motorcycling industry. The company has always accepted the power of “word of mouth advertising”, which sometimes can be negative, but which has proved to be very profitable for Harley-Davidson. Another strength related to the brand name is the company’s image and reputation.
Harley Davidson’s reputation is one of tough, durable motorcycles for everyone. The traditional image of a Harley Biker was the “long haired, black leather clad, Hell’s Angel”. But that image has progressed to now include the high-powered executive who “wants to get away from it all” at the weekend. Customer loyalty is another Harley Davidson’s strengths. Once people buy their first Harley-Davidson, they are hooked to the brand, and rarely switch to a competing brand. These results come from the high level of customer service and support offered to owners by the company through its networks of dealerships and H.
O. G. At rallies organised by H. O. G. , management of the company often interact with owners, enquiring if everything is all right with the product and also looking for ways to improve the “Harley experience”. Harley-Davidson, through its dealerships also offers a wide Range of accessories making it possible for an owner to customise their motorcycle. A further strength of the company is its innovative spirit. It innovates not by targeting new market segments so much as by improving the range and depth of existing products and accessories for the existing customer.
Harley-Davidson has used the advancement of technology to provide a better, faster and more efficient service for everybody involved with Harley-Davidson. For example the company’s website gives very little information about the products on offer. Instead it gives an in-depth look at the experience one gains by joining the “Harley Family”. Weaknesses Like every company Harley Davidson has its own weaknesses. One of the biggest problems faced by Harley-Davidson is the change in the demographics of purchasers.
Over the past ten years, the company has seen a worrying trend in that the average age of a Harley-Davidson buyer has increased by 7 – 8 years. A decade ago the average was 37. Now it has increased to 43 – 44 (www. harley-davidson. com). The company needs to look at ways of combating this trend before it becomes too late. The eighties saw the near bankruptcy for Harley-Davidson stemming from their slowness to react to the sudden influx of Japanese companies and their high-class, lower priced products. This showed a weakness in the managerial effectiveness of Harley-Davidson, which took a number of years to sort out.
The company had become complacent at the top of the market and when required were unable to make the necessary changes. Having now overcome these problems, Harley-Davidson must ensure for the future that management is willing to adapt the market changes quickly. A further weakness of Harley-Davidson is that it is unable to meet demand for the motorcycles (Hog Heaven – The story of the Harley-Davidson empire, 1998). As a result of the long waiting lists, some customers simply “get tired of waiting” and switch to a competitor brand.
Whether this is through production inefficiencies or just that the company wants to create a sense of “must have”, this strategy could in the long run prove a weakness, if customers are made to wait too long. Another weakness of Harley-Davidson is the narrowness of the product line. Some stock market analysts have predicted that Harley-Davidson is a disaster waiting to happen because the company is a one product company. Competitor brands have more than one product line and in the long run will be able to invest more trying to “eat away” the market share of Harley-Davidson.