Harley-Davidson's Focus Strategy
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Case Code: BSTR413 Case Length: 17 Pages Period: 2009-2012 Pub Date: 2012 Teaching Note: Not Available |
Price: Rs.500 Organization: Harley-Davidson Industry: Motorcycles Countries: US; Global Themes: Marketing Communication, Consumer Behavior, Brand Management |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Focused Differentiation
Over the decades, Harley emerged as the most powerful and focused motorcycle brand in the US. The company's business strategy was based on focused differentiation wherein it targeted specific groups with focused products. Through focused differentiation, Harley wanted to gain a competitive edge and be unique in its industry, experts said. The company exclusively focused on the heavyweight motorcycle segment. It concentrated on mini niches such as customized, touring, and standard motorcycles in the heavyweight division. The company's family of motorcycles included the Sportster, the Dyna, the VRSC, the Softail, the Touring, the Trike, and the CVO motorcycles...
Troubled Ride
In 2008, Harley reported a decline in the demand for its motorcycles due to the global economic downturn. The recession affected the growth of the company as people were reluctant to spend money on luxury items. There were few takers for Harleys, which had a price tag of up to US$20,000 for a fully-rigged cruiser. In 2008, the company's revenue decreased by 2.3% to US$5.59 billion compared to the previous year. Sales were down by more than 7% and net income fell 29.9% to US$ 654.7 million. Analysts said that Harley had earlier survived economic downturns as it had attempted to create value by keeping the production of its motorcycles well below demand. However, down the line to compete with Japanese manufacturers it had increased production capacity, thereby becoming vulnerable to a cyclical economy...
'Delivering Results Through Focus'
In October 2009, Wandell announced a long-term business strategy called "Delivering Results through Focus" to manage through the economic downturn and to enhance productivity and profitability. The key element of this strategy was to drive growth by focusing on the power of the Harley-Davidson brand and improve manufacturing, development, and business operations for sustained long-term growth...
The Road Ahead
For the fourth quarter ended December 2011, Harley posted a profit of US$105.7 million, compared to a loss of US$42.1 million in the corresponding period of 2010 . Revenue from motorcycles during the quarter was US$791.9 million, up by 13.5% compared to the year-ago period. Globally, dealers sold 40,359 new Harley motorcycles in the fourth quarter of 2011, a 10.9% increase compared to the 36,390 motorcycles sold in the year ago period. For the full year, worldwide retail sales of new Harley motorcycles increased 5.9% to 235,188 units, compared to sales of 222,110 units in 2010. Revenue from motorcycles for the full year was US$3.55 billion, a 13.3% increase compared to 2010...
Exhibits
Exhibit I: Harley-Davidson Circle Organization
Exhibit II: Strategic Pillars of Harley-Davidson's Focus Strategy
Exhibit III: Harley Davidson - Selected Financial Data
Exhibit IV: Harley-Davidson 2010 Revenue Distribution (in millions)
Exhibit V: Harley-Davidson Motorcycles & Related Products Revenues (Year Wise)
Exhibit VI: Market Share of Harley-Davidson (in the US)
Exhibit VII: 651+CC Motorcycle Registrations: Harley-Davidson Vs. Industry
Exhibit VIII: Harley-Davidson-Motorcycle Shipments
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