Harley Davidson Case Study Example | Topics and Well Written Essays - 2000 words

Harley Davidson - Case Study Example (Harley Davidson.com) As Harley Davidson is the market leader through a differentiation strategy and unique customization ability and because of high costumer loyalty as company's wide sponsored events and close interactions with its customers. Most market leaders are companies focused on low cost, mass production capacity in which the firm takes advantage of its economies of scale. Harley Davidson's continuous improvement in design, engineering and processes allow for such a leadership through customization and results in operational excellence. Harley Davidson has a grate net work of its dealer ship and has over 1300 dealers through out the world. In 2005, Harley Davidson motorcycles were sold in over 60 countries, with an international sales growth of 15%. For the first six months of 2006, motorcycle sales were up 11 percent and interest continues because of the high gas prices according to the Motorcycle Industry Council. In 2004, the most recent year data was available, the industry posted $7.6 billion in sales of 725,000 on-highway bikes, up from nearly $4.7 billion in 2000 with 471,000 bikes sold. Harley-Davidson brand bikes represented 48.9% of the approximate 517,600 total new U.S. registrations in 2005, down slightly from a 49.5% market share in 2004. In 2005, there were about 252,900 new U.S registrations of the brand's heavyweight motorcycles, up from about 244,500 in 2004. Harley Davidson's closest competitors in U.S. market share in 2005 were Honda (16.6%) and Suzuki (12.4%). Because of Harley Davidson's dormant market share and strength of its brand name, there is little direct price competition. There are High Barriers to Entry to the market. The first is the length of time it takes to build up technical capabilities. The second barrier to entry is the enormous dealer networks that the entrenched players have. There are fairly few but highly competitive brands the motorcycle industry. Most of Harley Davidson's competitors are outside of the US where they hold a dominant share of the market. There is an emotional connection to owning a motorcycle that diminishes the threat of substitution In fact, the motorcycle industry has been cited as a beneficiary of the rise in oil and gas prices and thus has become a more viable substitute to automobiles. Harley Davidson motorcycles represent a niche lifestyle product that buyers will want to purchase regardless of the price so HDI is able to pass on increased costs to its customers. The rise in aluminum, steel and oil could continue to impact production costs over the next several quarters. However, we expect this rise to be moderate as the raw material industries are fragmented and competitive. Corporate Strategy: HDI always focused on the brand name recognition since its inception and desirability of its