Here are 3 key strategies Harley should pursue to succeed in emerging markets like Brazil, China, and India against competitors with lower costs: 1. Price competitively by adjusting prices regionally and introducing products at lower price points tailored to local purchasing power. 2. Refocus their brand image through modernized designs and introducing lighter motorcycle models to appeal to younger consumers. 3. Invest in local production through assembly plants in these regions to lower costs and be responsive to local market needs, labor forces, and avoid high import tariffs. This will allow Harley to better control their value chain and compete on price. Pursuing an aggressive international expansion into these large emerging markets is critical for Harley to sustain long-

1. I N T E R N AT I O N A L I Z AT I O N
AT H A R L E Y- D A V I D S O N
G R O U P M E M B E R S :
O M E R A J D I N I ( 1 2 2 3 5 6 3 )
M O H D A F N A N N A J M I B I N M O H D H E L M I ( 1 3 2 5 9 2 9 )
N U R F A I Q A H B I N T I A B D R A H I M ( 1 2 2 2 5 8 0 )
F A R A H N A J I H A H B I N T I M O H D H A M I D I ( 1 3 2 4 4 1 6 )
M A R U M E I ( 1 2 1 6 8 6 6 )
N O R H A M I Z A H B I N T I K H A L I D I ( 1 2 1 5 0 5 6 )

2. SUMMARY
• Founded in 1903
• U.S. motorcycle manufacturer (35 models)
• Annual Revenues: $6 billion
• 1500 dealers
• Manufactures four distinctive groups of models:
Standard Performance Custom Touring

3. ¾ of total sales
Sells primarily : Custom and Touring (85% of sales of “heavyweight” sales”
 Competitors: Honda, Suzuki, Yamaha etc. New ones emerging from China- HQ
outside US
US MARKET

4. • Marketing Strategy:
• High end motorcycles
• Harley Owners Group (HOG)
• In 1980s Harley almost went bankrupt
• New CEO revived the company
• Japanese-style management
• Updated manufacturing methods
• Improving quality
• JIT inventory system
• Mid-1990s Harley repositioned more strongly

5. INTERNATIONAL EXPANSION
Established subsidiary and distribution network in Japan (in 2005 sold 12,000
motorcycles, $18,000)
In 2012 1/3 of total sales were from international markets (2006 only 25%)
European market
Diverse
Performance bikes sold most (>1/3)
Freeways high speed limit-need high performance bikes
Not rebellion, individualism
Launched HOG club
2008 bought the Italian MV Agusta Group $109m. Divested interest in 2010

6. • Harley’s fastest growing market
• 4% of total Harley sales
• Japan same-but stagnant economy
• Australia- promising but small market
• Millions of households income
more than $80,000
• Competitors already have presence
• Established subs in Delhi- no entry
yet: high trade barriers and
• 1.3m people
• Low wages, but growing
• Restrict usage of bikes in
highway(noise and theft)
• Piracy
• mentality: bikes for commuting
only
• High import tariffs-doubled
prices
• Established local assembly
Brazil china
Canada
Japan
Australia
India

7. • Vulnerable to regulations because big bikes pollute a lot
• Reforming the strategy=> catering to the needs of the environment
• In Japan launched motorcycle recycling program
ENVIRONMENT

8. THE FUTURE
• Recession hit income levels all around the world
Strategies
focus on foreign
markets
appeal to
lighter weight
markets
strategic control
of distribution
expand dealer

9. Q1: WHAT IS THE NATURE OF THE
INTERNATIONAL BUSINESS
ENVIRONMENTS HARLEY FACES?
WHAT TYPES OF RISKS DOES THE
FIRM FACE?

10. NATURE OF INTERNATIONAL BUSINESS
• Intricate and varies due to cultural and regional needs of the diverse markets its
establishment competes in.
• Diversification of sales in its two major markets, one at home in the U.S and the
other in Europe.
• The reason Harley faces such diversification is clearly due to consumer
preferences.
• Asian and Latin America market - a low cost bike
• While there already exists a big presence of low cost competitors such as Honda,
Suzuki and Yamaha as well as counterfeiters

11. TYPES OF RISKS IN INTERNATIONAL
BUSINESS
Cross-cultural
Risk
Country Risk
(political risk)
Currency or
Financial Risk
Commercial
Risk

12. Q2: HOW CAN HARLEY BENEFIT FROM
EXPANDING ABROAD? WHAT TYPES
OF ADVANTAGES CAN THE FIRM
OBTAIN? WHAT ADVANTAGES
ACQUIRED ABROAD CAN HELP
HARLEY IMPROVE ITS PERFORMANCE
IN ITS HOME MARKET?

13. HOW Harley benefit:
Increased sales revenue
To suit demand & local preferences in
Europe
Establish distribution network and local
subsidiary in Japan
Product Diversification
Creates new market opportunities
Brazil - biggest potential market in Latin
America China- 1.3b people
India- Households income over $80k

14. Advantages that Harley can Obtains:
Increased
market
share
Reduce
Cost
Brand
Recognition
Not only
depending on US
market
Assembly plant in
Brazil help avoid
import tariff and
access of low cost
workers
Creates brand that
offers a lifestyle
& can suit different
market

15. Q4:COMPETITORS SUCH AS LIFAN AND ZONGSHEN
ARE BEGINNING TO EMERGE FROM CHINA, WHERE
THEY ENJOY COMPETITIVE ADVANTAGES LIKE
LOW-COST LABOR AND EXTENSIVE EXPERIENCE
WITH EMERGING MARKETS. HOW CAN HARLEY
COMPETE AGAINST SUCH FIRMS? SHOULD
HARLEY MORE AGGRESSIVELY PURSUE
EMERGING MARKETS SUCH AS BRAZIL, CHINA,
AND INDIA? IF SO, WHAT STRATEGIES WILL HELP
IT SUCCEED IN THOSE MARKETS?

16. WHAT SHOULD HARLEY DO?
• It should have control over its factors of production in those three countries.
Land Labor
Capital Entrepreneur

17. Purchasing
power
Buying
Behavior
Sales

18. Price Adjustment
• Adjust prices
according to
regions.
• Introduce its
products at the
lower and
competitive prices.
Image Makeover
• Introduce
‘lightweight’
models compared
to its ‘heavyweight’
models.
• Change its design
to more stylish and
modern that will
suit younger
generation.
Investment in new
regions
• Different factor of
production in
different regions.
• Start to build an
assembly plant in
Brazil because of
lower labor cost.

19. • Adapt JIT inventory method.
• TQM Management method.
Company’s
Improvement
• Invest large amounts in R&D
to produce product that will be
accepted by local.
R & D