A.

Environment:
Economic Conditions and Trends:

Economically the Company is stable in fact; it has continuous improvement in

terms of increase revenue and earnings. This Instance, gave a 74% increase in
the firms value in 1998. The Company also completed a 447, 200-square-foot
facility near Milwaukee in 1998 where engines and transmissions are produced.
A 330, 000-square-foot facility in Kansas City, Missouri was also completed that
produces six models of new sporters. Obtaining full ownership of Buell
Motorcycle Company also posed as a good investment for the company as
manufacturers for this Sport motorcycles. As the Company grew and developed
through the years The Global arena for the motorcycle business also pose great
competition not only in the Harley’s product forte’s which are Heavyweight
Motorcycles but also in other machines like snowmobiles and small cycles with
engine displacements. Also in the field of spare parts and accessories
competitions put price as a distinguishing factor for Harley’s weakness over all
competitors. Harley-Davidson may be a prosperous company but in terms of
distributions in parts of the globe especially in a Big continent such as Europe,
Asia/ the Pacific Harley Davidson might have a problem. Age Group Statistics of
Buyers might pose an advantage to Harley’s or might not. The Companies
website may also pose an advantage to the company’s popularity due to the
growing trend in the use of internet website can give much added attraction to
the company Overall, even though Harley-Davidson has reach or is experience
its golden years in operations as an international company small imperfections
may pose big threats to the companies stability.

Summary of Environment Opportunities:

The Global environment poses great opportunities like Website improvements

which is now actually covered by the company extension of their companies to a
big continent such as Asia and the pacific which would extend their companies
image and further solidify their global competition around the globe. They could
also have brand extensions on small motorcycles and snowmobiles as added
revenue. In terms of parts and accessories they could further match up their
competition with competitors by offering low prices for these products but if risk is
too much further promotion of quality can be a determining factors.

Implications for Strategy Development:

The Opportunities mentioned above poses Strategies that can be developed

through evaluation of these opportunities and weighing out the corresponding
threats that poses constraints for its implementation. These Strategies would
include added improvement of the website, Improvement of promoting spare
parts and accessory quality to be able to compete with low price products from
competitors. And also, Formulate a plan in promoting brand extensions to
compete with companies producing snow mobiles and small motorcycles and
intensify distribution all around the globe by building facilities in Europe, Asia and
the pacific.

INDUSTRY

Classification of Definition of Industry:

The Harley-Davidson, Inc., is an industry focused designing and selling of

heavyweight machines for bike enthusiasts. The industry started and has its
headquarters a in the United States of America. It is the type of industry that only
sells and focus on heavyweight motorcycles its parts and accessories. The
quality and the price of their products are relatively high as well. It is a growing
industry with a considerably stable finances, good management and employee
team and loyal customers that have become members of the Harley Owners
Group or H.O.G. They also have a favorable market share among the other
manufacturers worldwide. Since its establishment in the U.S., the company has
expanded to more than a hundred outlets around the world.
Analysis of Existing Competitions:
Though the company specializes on designing heavy weight motorcycles, they
do not monopolize the market since a lot of other companies such as Honda,
Yamaha, Kawasaki and BMW to name a few offer the same type of product
Harley-Davidson offers. But Harley does not offer smaller motorcycles like the
others. In addition two other past direct competitors of the industry re enter the
market scene. Another competition of the industry is the presence of non Harley
Harleys, accessories and parts dealers that compete directly to those offered by
Harley-Davidson itself. The industry faces competition in three ways as stated
earlier and all these factors also determine the statistical standing of Harley-
Davidson, Inc., in terms of market share.
Analysis of Substitute Products:
Some companies sell remakes that are prized higher than the stock Harley price.
Other companies also make non-Harley Harleys that can substitute the authentic
make. They can be a threat to the company as others might prefer to patronize
these products. Though Harley offers different accessories and parts, some
might prefer to from another source that is also a competition. Most often, the
consideration of a substitute is through its price since authentic Harley parts and
accessories tend to be more expensive than the other makes. These substitute
products will surely affect the company’s profits even if they are just a part of the
whole motorcycle package.
Analysis of Potential New Entrants:
The new entrants in the market are not merely big threats to Harley since two of
them have been competing with the company for a time in the past. Given
Harley’s presence in the market for the longest time and the staying power they
exude, they can surely keep up with it. Their standing in the past should also be
considered since they are direct competitors and are in the same classification
with Harley. However, the other new entrant has also been in the market for
some time and would somehow affect the market sharing since it is also a trusted
brand making parallel machines, only before they focused on snow vehicles.
Analysis of Buyers:
The change in the motorcycle buyers’ profile can bean advantage for the industry
because 35 years old and above people have bigger earnings and have the
capacity to buy and buy the authentic make. If most of the make it a hobby, then
dressing up their motorcycle can also be related and would further their spending
on accessories and parts. It is also important to note that older people are more
cautious than teenagers that can be translated to safer trips and lesser incident
of motorcycle accidents.
Analysis of suppliers:
The suppliers for this type of industry are vast and diverse which is good for
buyers since competition can make the product’s quality high and the prices at
bay. Another thing that should be noted is the variety, style and options a buyer
have in this market. Though it would be cut throat for the suppliers in every
aspect of marketing their product, it is a way for them to be motivated in
innovating and thinking effective ways to sell.
Summary of Industry Opportunity and Threats:
The motorcycle industry has grown over the years. Many companies have come
and gone yet others stay in the business for long and have risen up to the
changes in demand over time. At present there are already a number of
companies in the said industry that it would be a needle hole to penetrate such
markets and battle those industry giants. The profit in this industry is favorable
since more and more people patronize these machines as it becomes more
popular. However, companies in this industry have to maintain its quality,
continue to innovate and find more ways to attract potential buyers to stay. Since
motorcycles are not necessities that are sold in bulk, it is important that they keep
the hobbyist and riders interested and involved. The machine life is long so re
buys most likely isn’t possible. But if they try to innovate, then can ensure re buys
from loyal and satisfied members, riders and collectors.
Implication for Strategy:
The strategy applied by Harley-Davidson is effective in relation to the Company’s
growth over the years. Their ad and website is hardcore since it directly caters
interested parties and gives ample information about their product line. Though
they did not innovate as much as the other companies did, they have focused on
their specific craft. Their strategy of keeping the classic and traditional way a
motorcycle is built is an advantage as well since this is the one trusted by the
buyers all these years. Their staying power is remarkable having been in the
business for the longest time, they owe it to their patrons to keep the quality high
and continue the Harley mystique as well. It is important to note that the
management did good to have survived the times in history. Their employees are
deemed to be commendable as well since the company can not stand on good
management alone. Their dedication they put to their job and the machines really
play a big part. They have this appeal to the buyers as they are admired for their
long experience on motorcycles. Indeed their strategy deed paid off. A few more
push and innovation can give them better market share in the future.
A. Organization:

• Objectives and Constraints:

Objectives:

1. Promote Spare part and Accessory Quality Effectively to

compete with other companies who sells low priced- high
quality spare parts.
2. To improve the companies website for further attraction of
buyers in the internet.
3. To have a successful brand extensions to compete with
other companies selling snowmobiles and small
motorcycles different from heavyweight motorcycles being
promoted and produced by Harley-Davidson.
4. Build Facilities in Europe, Asia and the Pacific to further
patch up the distribution problems being faced by the
companies in these regions.
Constraints:
1. Some of these companies offer low priced
accessories with the same quality as of the Harley-
Davidson products.
2. The Website may face serious competitions from
websites of companies such as BMW, Honda, Kawasaki,
Suzuki, and Yamaha.
3. Companies Selling these product offer low prices with
a high quality that would be a threat for the company.
4. Facilities in this region may be risky due to some
instances like competitions with other companies in that
region that offers low priced products.

• Financial Conditions:

The Company has been blooming for the past years since
1997 even though the company has been through a lot. By having
a 17% increase of over 1997 and gross profits of $ 104.5 million in
the previous year, the company had a 74% increase of firm value
on 1198.

• Organization Culture:

The Organization promotes a Family-Oriented atmosphere

were empowered employees are committed to sustaining steady
manageable growth that is essential to the employees managing skills.
Harley-Davidsons Product owners are also introduce to these
atmosphere because of the Harley Owners Group/H.O.G that keeps in
touch with valuable consumers of the product.

• Summary of Firm’s Strength and Weaknesses:

Strengths:

1. A Powerful and admired brand centered around the

experiences of motorcycling; its attributes of freedom,
Adventure, and Individuality that appeal to people across a
wide variety of Demographic segment.
2. Strong relationships with all of its stakeholders including;
dealers, customers, employees, suppliers, governments,
society and stakeholders,
3. A proven management team and empowered employees
committed to sustaining steady, manageable growth in a
worldwide motorcycle market.
4. Harley-Davidson’s mystique… the ability of the brand to
bring together in unique and surprising ways seemingly
disparate combinations of products, people, processes and
experiences.

Weaknesses:

1. The Company has low market shares in Asia/Pacific

and Europe that would be a risk in the global competition.
2. Competitors have a low-price and high quality
advantage in terms of spare parts and accessories.
Consumers can switch to other company due to price.
3. They have low distribution on regions in Europe and
Asia/Pacific that may be the cause of their low Market
share on these regions.
V. PROBLEMS FOUND IN THE SITUATION

In accordance with the primary information presented in the case; Harley

Davidson had shown lack of attention to its very basics:
(1)Considering the price;
(2)Customer needs and wants;
(3)Product positioning;
(4)Bench Market;
Missing these four (4) basics, the company will not push through the other
country or even on the locals. Since, there are competitors arising; once HD will
not (1)consider their price the costumers would possibly shift to their
competitors especially it was mentioned in the case that the other motorcycle
firms had similar parts that HD produce yet with the lower price and same quality;
secondly, when the(2) Customer needs and wants are not considered, the
point of being in the motorcycle industry will turn to waste, and this will loose their
costumers patronage toward their company and the products they are selling.
(3) Product positioning, customers definitely patronage a certain company or
product due to their distinctive and the ability to maximize it’s utility; (4) Bench
Market, the company that faces a number of competitors should require to
discriminate themselves from its competitors. If failure to do so, company would
end up looking like an addition to surplus.

ALTERNATIVES
The main problem has mainly focus on positioning and promotion. We
think the best step to an alternative solution (1) is to concentrate on promoting
and producing motorcycles that are eco –friendly or more on a simple approach
like producing small motorcycles. This Product can be a great risk in innovating
products for the company but it would surely be appealing to people in Europe
and Asia since they are more interested on small inexpensive motorcycles. (2)
They can also establish factory facilities in these regions (near Europe and Asia)
to cover much needed demand in these regions in this way they picture out what
the locals need since they are more in contact with them. (3) They can establish
good relationship with retailers in these regions to further ease up and accurately
distribute their products. (4) They can establish events such as bike shows to
showcase further their new products and if ever the small motorcycles are in
production the local will have their first look. In this way consumers will be
knowledgeable to Harley’s product line. In the field of spare parts and
accessories
Promotion may not be enough but it can be an effective way to strengthen that
would be ideal for brand loyalty. (5) They can promote promos like in every
purchase of a Harley motorcycle they will have free Harley-Davison spare parts
and accessories. (6) H.O.G members can also be ideal retailers for spare parts
and accessories by this way their friends and families can be more exposed to
what a Harley-Davison product quality means.
Recommendations:
Base on the alternatives, since price is an issue the company can
create promos that could give much exposure to what Harley products is, ex. In
free Harley Davidson spare parts and accessories in every purchase of Harley
motorcycles. H.O.G can be great retailers for these products since they establish
a loyal tie to the corporation that would convert consumers from the pricing issue,
to the great quality Harley-Davidson products offer. The Company should also
focus on positioning and promotion by creating eco-friendly products positioning
can be covered in Europe and Asia since people are more interested in small
motorcycles.
MK321 STRATEGIC MARKETING

Submitted by:

Bacon, Duane
Bacharpa, Jian Carloe
Gonzales, Jomai
Jo, Yumi

Submitted to:
Mr. Roberto Testa