Harley VS Honda Strategic Decisions

1. VS.
Course : Business Strategy
Professor: Alexandros Papalexandris
Live free
or die tryin'
The Easy Riders:
Andreou Anastasios
Athanasiou Ioannis
Kakavoulis Anastasios
Kallis Nikolaos
Mehta Arjun

2. Introduction

3. Video

4. Harley-Davidson
from birth to maturity
•
By 1953 Harley is #1 American manufacturer of motorcycles.
•
In 1959, Honda entered the US market => rebirth of motorcycling in the US.
•
Japanese producers soon
moved up-market in the
heavyweight sector.
•
In 1969, Harley-Davidson was
acquired by AMF.
•
End of 1970s Honda became the
market leader in the heavyweight
motorcycles in the US.

5. Harley-Davidson rebirth
In 1981, the then CEO ,
organized a leverage buyout.
●
The new management team
brought a revolution.
●
US government imposed
49% temporary tariff.
●
The 1990s saw year-on-year uninterrupted growth in the
heavyweight motorcycle market and a continued increase in
Harley’s market share.
●

6. The Brand & The Product
●
Harley Experience(individuality, freedom & adventure).
●
HOG(1983)
●
Harley VS. Competitors
●
Personalization(engine types, gas tanks, frames, etc.).

7. Distribution
●
620 U.S Dealerships.
●
Dealer Development
Program
●
Demand greater than
Supply

8. International Expansion
●
Brand Image &
European market.
●
Buell(1998)
●
HOG's and Dealer's
Development Program.

9. People & Management
●
Management & Employee Relationship
●
Working Policies
●
Organizational Structure

10. PORTER’S 5 FORCES MODEL FOR HARLEY-DAVIDSON
Threat of new entrants(Low)
Power of customers(Low)
Very high entry barrier
§
Requires high capital investment
and is a mature industry
§
§
Low economies of scale
§
Since product is differentiated
customer tends not to be price
sensitive
Rivarly among existing firms
§
§
Harley-Davidson-Yamaha-SuzukiHonda
Harley’s help from ITC and
government allowed them to catch
up to their competitors and gain
some ground in market share
Power of suppliers(High)
§
§
Steel, basic electric equipment
and shipping of the final
motorcycles.
Harley has ’preferred suppliers’
and there is a trust between
them because suppliers generate
profit
Threat of substitutes
§
Cars, sport bikes, and scooter
bikes. BUT Harley is a luxury
vehicle, so there are few close
substituters for this
heavyweight motorcycle

11. Founded in 1948 by Soichiro Honda
●
In 1949 Takeo Fujisawa became partner.
●
Fujisawa brought along his financial
expertise and the marketing strengths.
●
In 1951 Honda unveiled a breakthrough
design that doubled horsepower over
competitive 4-stroke engines.
●
With this innovation Honda was off and
putting and by 1952 demand was brisk.
●

12. In 1952 first motorcycle factory ppurchased.
●
In 1958 the Honda 50cc Supercub was introduced.
●
Overnight Honda was overwhelmed with Supercub orders. In 1959
Honda had a 23% market share in Japan
●

13. Honda enters U.S market
●
Honda is the first Japanese company to begin the invasion.
●
No strategy. Just to see what they could sell (What a strategy!!!).
●
●
The start-up inventory with 25% of each of its four products:
The 50cc Supercub.
The 125cc.
The 250cc
The 305cc .
Los Angeles becomes the base of operations in the start.

14. ●
In 1960 , the first machines had problems.
●
Honda redesigned the motor for the US market.

16. By 1964, 1 of 2 motorcycles in the US sold was a Honda.
●
Early 1970's Japanese manufactures accounted for more than 85% of U.S
motorcycle sales.
●
At the end of 1970's, Honda dethroned Harley from market leader in
heavyweight motorcycles in United States
●

17. S
• High and powerful research and
development R & D
• Innovation
• Best market share leadership
• Strong and powerful brand equity
• Different and unique products
• Popularity is termed as one of the best
strength of the which results in betterment for
the company
O
W
Cost structure of the Honda is high as
compare to other automobile manufacturers
• Honda focus more on international deposits as
compare to domestic deposits
• Honda products are termed as inoffensive in terms
of style and design
• In truck line, the Honda Company is not offering
strong products and proposals
•
Honda has the best opportunity to use its R & D in
producing cars according to the needs and demands
of their customer. This is only possible because of the
increase is in demand for less pollution cars.
• Various models there are the which caters the lower
segment
• Fuel efficiency is now a days termed as one of the best
opportunity the which cans results in the best
productivity for the company
• Alliances are the best opportunities for the Honda
Company
• Honda cans increase of its production by focusing on
sales and research
T
One of the major threat is the economic
slowdown.
• All the external changes for instance taxes,
politics as well as government are the major
threats for the Honda Company
• Another threat is the lower cost competitors
• Price war is also consider as an Important
threat for this company
• Oil prices are contributing a lot towards the
loss of the Honda company
• Second movers are the major threat for the
Honda company
• Substitute products are the major threats for
the Honda company

18. Thank you .!.