This document summarizes Harley-Davidson's business strategy and history. It discusses how Harley-Davidson focuses on differentiation within the heavyweight motorcycle market by appealing to customers' lifestyle needs. It also examines Harley-Davidson's key strengths in brand recognition and unique customer experiences, as well as weaknesses in international exposure. The document outlines mistakes made when Harley-Davidson became complacent due to its postwar monopoly, and attributes its turnaround success to goal orientation, strong management and marketing practices like the Harley Owners Group.

2. Submitted By : Roll No. :
Rahul Katti E1M - 53
Omkar Temghare E1M - 46
Payal Marathe E1M - 48
Tanuja Jadhav E1M - 35
Kishan Kumar E1M - 38
Submitted to : Dr. Mahesh Mangaonkar

3. History
• Founded in 1903: William Harley and Davidson brothers.
• Represents a tradition of US engineering and manufacturing.
• Harley-Davidson is a lifestyle people choose.
• One of the leading manufacturer in all over world and after world
war II , they grabbed opportunity of monopoly.
• They had monopoly in motorbikes market due to closure of its main
rivals.

4. Harley Davidson’s Strategy
According to Porter’s Generic Strategies:
Harley Davidson’s has a Focus - Differentiation Strategy: differentiate
within just one or a small number of target segments
Differentiation
Focus
Focus on Heavyweight market
with customers who consider
their motorcycle a luxury
product.

5. Differentiation Strategy
• Differentiation based on customers‘ social and psychologial needs
Harley-Davidson is in the business of selling lifestyle, not
transportation
• Internal and external product integrity – critical factor in such
differentiation:
Ability of employees and customers to identify with one another
e.g.management wearing biking leathers

6. Differentiation
advantage by careful
examination of
activities customers
undertake
Creating customer value by
providing:
 Test ride facilities
 Owner‘s club activities
 Various sponsored events for
Harley riders
Information gathering (e.g.
price, fuel price)
Dealer Network visit
Selecting
Maintaining
Customization
Purchasing

7. Strategic Importance
RelativeStrength
SUPERFLUOUS STRENGTH KEY STRENGTHS
ZONE OF IRRELEVANCE KEY WEAKNESSES
• Product
Diversification
(R&D)
• International
Exposure
• Manufacturing
• Product
Development
• Public
Relationship
• Usage of
statistical
methods
• International
market share
• More patents
Competitor : HONDA

8. Establishing competitive advantage
• Harley-Davidson lacks in their resources and capabilities to have cost
advantage over Honda
 low economies of scale and learning curve due to low production
• Differentiation advantage is obtained through brand recognition and
the Harley experience
 providing the customers a unique motorcycle
• However, Harley’s international exposure as a key weakness
demonstrates the inefficient sales in order to sustain their other
resources such as R&D and product diversification.

9. Mistakes
• Cause of monopoly they became overconfident and they choose
QUALITY of the product became a secondary consideration.
• Harley was aware they would no longer be able to continue their
business at their current production level and operating cost.
• Not able to compete with competitors like Honda cause of their
preference on only cost advantage.
• They were less practical to statistical methods like JIT,KAIZEN.

10. Harley's success
Goal
orientation
Management Marketing

11. Goal orientation
• Implementation of Umbrella term
• Managers were so focused on their goal of quality of their product,
fostering a climate of continuous improvement without financial
justification.
• One of the important decision was to avoid rigid rules and regulations
to their multiple facilities with diverse manufacturing environment.
• They gave freedom on way of work and principles to everyone which
was drastic shift from white collar to blue collar discrimination in the
American companies at that time.

12. Continued…
• Employee Involvement Groups (EIG),to solve quality problems
regarding to quality of their products.
• Full-fledged EIG in which training to the employees in problem solving
and also they mainly focused the term quality cause company does
not want to shift the company’s focus from quality to cost reduction.
• Just-In-Time(JIT) , Statistical Operator Control (SOC)-
Quality-improvement program, operate with lower and lower
inventories, concentrating on "setup reduction, focus flow
processing, containerization, parts control and operator preventive
maintenance.

13. Management
• Harley was very profitable during World War I and World War II, this
status quickly changed during the 1970's.
• Following list of practices which were main contributors to the
problems previously experienced:
 Corporate management focused mostly on short term returns.
 Management did not listen to its employees or give them
responsibility for the quality of what they made.
 Management that woke up too late to the threat of foreign
competition because of the "it can't happen here" syndrome.
• Strong relationships with workers.

14. Marketing
• Image-
The real power of Harley-Davidson is the power to market to
consumers who love the product.
• Customer Relations-
1 year free membership with Harley Owners Group (HOG),which was
developed in 1983.
They conduct four US national rallies, two touring rallies and 44 state
rallies.

15. Harley recorded impressive improvements:
1. Inventory turns up from 5 to 20.
2. Inventory levels down 75 %.
3. Percentage of motorcycles coming off the line completed up from 76
% to 99 %.
4. Scrap and rework reduced by 68 %.
5. Productivity up by 50 %.
6. Space requirements down by 25 %.