Harley-Davidson Motor Co., Inc.:defending a Piece of Domestic Pie

Harley-Davidson Motor Company was founded in 1903 by William S. Harley and Davidson brothers and has come to symbolize the all-American attributes of individuality, freedom and passion for adventure.

Harley-Davidson produced by 1950 uniquely styled motorcycles that inspired an unusually high degree of brand loyalty achieving a 60 percent to 70 percent of US market share. By 1960 Japanese motor companies hit the country with quality motorcycles for cheaper prices because of a hug structure and efficient production techniques and a strong advertising campaign.

In 1969 AMF, a recreational equipment conglomerate, bought the company and manage it focusing in its worthy products so by 1976 Harley-Davidson offered 4 models while Japanese companies offered 20 to 25 models and its market share dropt to 5 percent. But still they where leaders of the heavy bikes market -700cc and up.

With the 80s Harley-Davidson started its revitalization program with the government help. A 5-year tariff went into effect April 1983 taxing almost 50 percent on 700cc or more motorcycles imported.

Nowadays Harley-Davidson Inc. has $1.04 billion net income (up 8.7% from ’05) it sold 349.196 units to retailers (21,7 percent abroad) and it has a domestic market share of 49,3% for heavyweight motorcycles. 88% of its buyers are men with a median age of 45, high income and 51% of their customers owned a Harley before.

US market-oriented economy is marked by steady growth (3,4% in 2006) low unemployment (4,8%) and inflation (2,5%) and rapid advances in technology. The median age of its almost 300 thousand inhabitants is 36,5 years with a $43.500 GDP. The US has the largest and most technologically powerful economy in the world and is the most influencing country world wide.

SWOT ANALYSIS

Strengths Opportunities

 Strong image

 Brand loyalty

 Strong investment in research  Customization

 The only American manufacturer

 Created subculture

Weaknesses Threats

 Small company

 Not the best engine  American no so good image abroad

 Current market could become too narrow to profits.

 Increasing immigration in US.

QUESTIONS

1. Do you consider Harley-Davidson to be the victim of unfair competitive practices or of its own lack of strategic vision?

In the 60s and 70s Japanese technology bumped the world, it happened with watch industry as in the Swatch case, and there was no excuses, Westerns were not prepared to assume that their lack of competitivity was ending. Harley-Davidson should have been prepared to the entry of new products, should have react with strong advertising and should have developed better products and processes before the Japanese came.

I think there was no unfair competition, just different than habitual. Despite we don’t have data on the Japanese costs to assure