ReviewEssays.com - Term Papers, Book Reports, Research Papers and College Essays
Search

Harley Davidson Str Analysis

Essay by   •  February 2, 2011  •  Case Study  •  4,022 Words (17 Pages)  •  3,834 Views

Essay Preview: Harley Davidson Str Analysis

Report this essay
Page 1 of 17

External Examination

First stage of external examination- market definition:

From its beginning in 1903, HD is mostly known as a motorcycle manufacturer. Since the 90's, HD has expended its products and services from motorcycle manufacturing only, to related products (motorcycle parts, accessories, clothing, collectibles) and financial services (The financial services segment engages in financing and servicing wholesale inventory receivables and consumer retail loans primarily for the purchase of motorcycles in the United States, Canada, and Europe). Nevertheless, its core business still stays motorcycle manufacturing and thus its market is mainly the Motorcycle & Other Small Engine Vehicle Manufacturing which refers to companies that manufacture motorcycles, personal watercraft, snowmobiles, all terrain vehicles (ATVs), or scooters. In a broader definition, the Industry in which HD operates is the Recreational Vehicles.

Laggards in Market Capitalization

KINGSLEY COACH INC (THE) [KNGS.OB]

$2.4 M

COACH INDUSTRIES GRP [CIGI.OB]

$7.9 M

BAD TOYS HOLDINGS [BTYH.OB]

$12.7 M

FOUNTAIN PWRB IND [FPB]

$25.6 M

FEATHERLITE INC [FTHR]

$43.7 M

NATL RV HLDGS INC [NVH]

$51.7 M

COACHMEN IND INC [COA]

$178.4 M

MONACO COACH CP [MNC]

$391.0 M

MARINE PRODUCTS CORP [MPX]

$397.4 M

ARCTIC CAT INC [ACAT]

$398.2 M

Target Market

The HD target market, however, has no clear differentiation, if to judge according to HD demographic profile:

Demographic Profile (2000-2004)

Gender 2000 2001 2002 2003 2004

Male 91% 91% 91% 90% 90%

Female 9% 9% 9% 10% 10%

Purchasers (2004)

42% Owned Harley-Davidson® motorcycle previously

31% Coming off of competitive motorcycle

27% New to motorcycling or haven't owned a motorcycle for at least the past 5 years

Median age Median Income

It is difficult to define an average Harley-Davidson buyer. The demographics range from a blue-collar worker to a high-power executive located all over the world. The common thread is a desire to escape the routine and become anyone you like. While their competitors base their advertising on product technology and features, Harley promotes: "a mystique appearance, individualism, the feeling of riding free, and the pride of owning a legend. With Harley, you can live out your fantasies, as well as experience camaraderie with fellow bikers". Although financial figures support its current strategy, HD's buyer's information is general and maybe needs more focusing.

Porter's five forces analysis:

1. Buyer power: LOW

After the company had almost ended in bankruptcy in the 60's due to the Japanese motorcycles companies penetration to the US, and after being sold not successfully to new owners, finally in the 80's a team of former Harley-Davidson executives began negotiations to reacquire the company and rescue it from bankruptcy. The combination of visiting a Japanese motorbike manufacturing plant to learn 'how they succeed' and lobbying in Washington for import tariffs was a move on behalf of Harley's executives in their attempt to bring back profitability and growth to the company. The company used a unique marketing and branding campaigns.

Studies showed that about 75 % of Harley customers made repeat purchases- they have strengthen the loyalty of customers by creating a community that valued the experience of riding a Harley more than the product itself. That gave HD a huge advantage over its rivals since the brand had become so strong, it literally had no substitutes. HD created the 'Harley Experience' instead of just selling a product by making the Harley Owners' feel like a unique popular group and by allowing motorcycle owners to feel as if they belonged to one big family. This was aimed both to the existing customers and there were great marketing resources also towards new customers - giving free rides, free one-year membership to a local riding group, private receptions at motorcycle events, insurance, emergency roadside service, rental arrangements on vacation, and other member benefits- those buyers' incentives that kept HD existing and potential customers loyal or willing to pay the premium price. HD put its efforts on giving its members on-going information, thus maintaining its relationships with them and strengthening buyer concentration vs. industry.

All of the above decreases the bargaining power of the buyer- buying a Honda for a lower price is not the same because of HD strong brand identity.

Price sensitivity is low as well because of the strong brand identity- an HD motorcycle cost more than the Japanese ones or US competitors.

We can also consider the dealers as "middle - customers". It is very important to mark that all of the sales are done through distributors. HD has more than 1300 dealerships in 60 countries worldwide. Those dealerships are part of the HD family- Harley-Davidson Credit, Eagelmark's largest division (Eagelmark Financial Services is a majority-owned subsidiary) provides wholesale financing and insurance programs, starting from motorcycle floor-planning up to commercial insurance brokerage to Harley-Davidson's US dealer network. In addition, Harley-Davidson offers its domestic dealers from time to time quarterly special discounts and/or 120 day delayed billing terms through Eagelmark

...

...

Download as:   txt (26.7 Kb)   pdf (280.8 Kb)   docx (22.9 Kb)  
Continue for 16 more pages »
Only available on ReviewEssays.com
Citation Generator

(2011, 02). Harley Davidson Str Analysis. ReviewEssays.com. Retrieved 02, 2011, from https://www.reviewessays.com/essay/Harley-Davidson-Str-Analysis/31777.html

"Harley Davidson Str Analysis" ReviewEssays.com. 02 2011. 2011. 02 2011 <https://www.reviewessays.com/essay/Harley-Davidson-Str-Analysis/31777.html>.

"Harley Davidson Str Analysis." ReviewEssays.com. ReviewEssays.com, 02 2011. Web. 02 2011. <https://www.reviewessays.com/essay/Harley-Davidson-Str-Analysis/31777.html>.

"Harley Davidson Str Analysis." ReviewEssays.com. 02, 2011. Accessed 02, 2011. https://www.reviewessays.com/essay/Harley-Davidson-Str-Analysis/31777.html.