2. HARLEY DAVIDSON
Harley-Davidson is a legendary American motorcycle
manufacturer that has been around for over a century.
The company is known for its iconic V-twin engine sound and
its loyal fan base.
However, in recent years, Harley-Davidson has faced some
challenges, such as declining sales and an aging customer
base.
To address these challenges, Harley-Davidson has been
working on a strategy to attract younger buyers while
retaining its loyal customers.
In 2009, Harley-Davidson acquired Buell Motorcycle Company, a
sportbike manufacturer, to expand its product line and appeal to a
wider audience.
However, the Buell brand has not been as successful as expected,
and Harley-Davidson is now facing a dilemma of what to do with it.
In this presentation, we will explore the five options on the table
and evaluate them using branding concepts to recommend the best
course of action for Harley-Davidson.
3. FOCUS ON BUELL
AND SUPPORT IT
DILEMMA
BUELL AS SEPERATE
COMPANY
SELL BUELL /
DISCONTINUE BUELL
4. BUELL AS SEPERATE
COMPANY
Advantages:
Avoids potential dilution of the Harley-Davidson brand that may occur if Buell
is kept within the Harley-Davidson organization.
Allows Harley-Davidson to focus on its core business of producing Harley-
Davidson motorcycles, while Buell can operate as a separate business unit
with its own management team and resources.
The Harley-Davidson name could still be associated with the Buell brand,
catering to the legacy-loving customers who have a strong attachment to the
Harley-Davidson brand.
Disadvantages:
Cost of creating a new corporate entity.
Need for additional resources.
Risk of losing some of the synergies between Harley-Davidson and Buell.
The Buell Bikes have a very low market share as compared to competitors and
also very low brand awareness. The strategic choice recommended for such
product line is to be divested or discontinued.
5. Could generate significant revenue for Harley-Davidson.
Allows Harley-Davidson to focus all its resources on its core brand,
improving profitability and streamlining operations.
Difficult to find a buyer willing to pay a high enough price for the Buell
brand.
May result in the loss of some of Harley-Davidson's customer base,
particularly those loyal to the Buell brand.
Could harm Harley-Davidson's image and reputation, viewed as an
admission of defeat or failure.
Discontinuing Buell may alienate loyal customers and damage the
brand's reputation.
May affect the perception of the brand as an innovative and forward-
thinking company
Advantages:
1.
2.
Disadvantages:
1.
2.
3.
4.
5.
SELL BUELL /
DISCONTINUE BUELL
6. THE BUELL BIKES HAVE A VERY LOW MARKET SHARE AS
COMPARED TO COMPETITORS AND ALSO VERY LOW BRAND
AWARENESS. THE STRATEGIC CHOICE RECOMMENDED FOR
SUCH PRODUCT LINE IS TO BE DIVESTED OR DISCONTINUED.
7. Could generate significant revenue for Harley-Davidson.
Allows Harley-Davidson to focus all its resources on its core brand,
improving profitability and streamlining operations.
Difficult to find a buyer willing to pay a high enough price for the Buell
brand.
May result in the loss of some of Harley-Davidson's customer base,
particularly those loyal to the Buell brand.
Could harm Harley-Davidson's image and reputation, viewed as an
admission of defeat or failure.
Discontinuing Buell may alienate loyal customers and damage the
brand's reputation.
May affect the perception of the brand as an innovative and forward-
thinking company
Advantages:
1.
2.
Disadvantages:
1.
2.
3.
4.
5.
FOCUS ON BUELL
AND SUPPORT IT
8. HOW TO LEVERAGE
Expand product line: Harley-Davidson can expand its product
line by introducing new models that cater to different audience
segments. For example, they could introduce a new line of
adventure bikes or electric motorcycles to attract younger and
eco-conscious riders.
Diversify brand image: Harley-Davidson can diversify its brand
image by associating itself with other lifestyle products such as
clothing, accessories, and events. This will help the brand reach
a wider audience and create new revenue streams.
9. HOW TO LEVERAGE
Improve customer experience: Harley-Davidson can improve
the customer experience by offering more personalized
services and creating a sense of community among its riders.
This can be achieved through events, online forums, and social
media engagement.
Expand international presence: Harley-Davidson can expand
its international presence by targeting new markets and
developing a stronger distribution network. This will help the
brand tap into new customer segments and increase sales
globally.
10. Harley-davidson's key sources of customer value are its strong brand heritage,
unique riding experience, and sense of community among riders.
To create a sustainable value proposition, harley-davidson can leverage these
strengths by focusing on creating innovative and high-quality products that cater
to different customer segments.
Introducing new models and continuously improving the product range can help
harley-davidson stay relevant and attractive to a diverse range of customers.
Harley-davidson can also leverage its brand image and heritage to create a unique
customer experience that goes beyond the motorcycle purchase.
This can include events and activities that promote the harley-davidson culture
and lifestyle, as well as providing exceptional customer service and support.
Prioritizing customer value and building a strong brand image can help harley-
davidson develop a sustainable value proposition that drives growth and success.
KEY SOURCES OF CUSTOMER VALUE
11. HOUSE OF BRANDS OR BRANDED HOUSE?
HARLEY-DAVIDSON CAN BUILD TWO STRONG INDEPENDENT BRANDS,
HARLEY-DAVIDSON AND BUELL, TO MAINTAIN ITS CORE CUSTOMERS
AND INCREASE ITS APPEAL TO YOUNG ADULTS. BUELL BIKES ARE
LIGHTER, FASTER, SPORTIER AND CHEAPER, AND COULD ATTRACT
YOUNG PEOPLE AND HAVE ITS OWN COMMUNITY, SUBCULTURE AND
LIFESTYLE FORM. HOWEVER, SIGNIFICANT RESOURCES ARE NEEDED
TO SUPPORT SUCH AN APPROACH, AND IT WILL BE MORE
CHALLENGING TO MANAGE SEPARATE BRANDS AT THE SAME TIME
WITHOUT LOSING ANY OF THEM.
HARLEY-DAVIDSON'S "BRANDED HOUSE" STRATEGY IS A GREAT WAY
TO CREATE CONSISTENCY AND BUDGET-FRIENDLY, BUT IT CAN LEAD
TO CONFUSION AMONG YOUNG CUSTOMERS AND A DEVALUATION OF
THE LONG-STANDING HARLEY-DAVIDSON BRAND IMAGE.
12. HARLEY-DAVIDSON AND BUELL MOTORS MUST NAVIGATE
THESE DILEMMAS TO CONTINUE OPERATING AND GROWING
THEIR BUSINESSES IN THE FACE OF CHANGING MARKET
CONDITIONS AND CONSUMER PREFERENCES. THEY NEED TO
BE INNOVATIVE, FLEXIBLE, AND CUSTOMER-FOCUSED TO
STAY RELEVANT AND COMPETITIVE IN THE LONG RUN.
CONCLUSION
