VS.

The Easy Riders:Andreou AnastasiosAthanasiou Ioannis

Kakavoulis AnastasiosKallis Nikolaos

Mehta Arjun

Course : Business StrategyProfessor: Alexandros Papalexandris

  

Live free or die tryin'

Introduction

Video

Harley-Davidsonfrom birth to maturity

• By 1953 Harley is #1 American manufacturer of motorcycles.

• In 1959, Honda entered the US market => rebirth of motorcycling in the US.

• Japanese producers soon moved up-market in the heavyweight sector.

• In 1969, Harley-Davidson was acquired by AMF.

• End of 1970s Honda became the market leader in the heavyweightmotorcycles in the US.

Harley-Davidson rebirth●In 1981, the then CEO , organized a leverage buyout.

●The new management team brought a revolution.

●US government imposed 49% temporary tariff.

●The 1990s saw year-on-year uninterrupted growth in the heavyweight motorcycle market and a continued increase in Harley’s market share.

The Brand & The Product

● Harley Experience(individuality, freedom & adventure).

● HOG(1983)

● Harley VS. Competitors

● Personalization(engine types, gas tanks, frames, etc.).

Distribution● 620 U.S Dealerships.

● Dealer Development Program

● Demand greater thanSupply

International Expansion

● Brand Image & European market.

● Buell(1998)

● HOG's and Dealer's Development Program.

People & Management

● Management & Employee Relationship

● Working Policies

● Organizational Structure

§ Very high entry barrier

§ Requires high capital investment and is a mature industry

§ Low economies of scale

§ Since product is differentiated customer tends not to be price sensitive

§ Steel, basic electric equipment and shipping of the final motorcycles.

§ Harley has ’preferred suppliers’ and there is a trust between them because suppliers generate profit

§ Cars, sport bikes, and scooter bikes. BUT Harley is a luxury vehicle, so there are few close substituters for this heavyweight motorcycle

§ Harley-Davidson-Yamaha-Suzuki-Honda

§ Harley’s help from ITC and government allowed them to catch up to their competitors and gain some ground in market share

Threat of new entrants(Low)Power of customers(Low)

Power of suppliers(High) Threat of substitutes

Rivarly among existing firms

PORTER’S 5 FORCES MODEL FOR HARLEY-DAVIDSON

●Founded in 1948 by Soichiro Honda

●In 1949 Takeo Fujisawa became partner.●Fujisawa brought along his financial expertise and the marketing strengths.

●In 1951 Honda unveiled a breakthroughdesign that doubled horsepower over competitive 4-stroke engines.

●With this innovation Honda was off andputting and by 1952 demand was brisk.

●In 1952 first motorcycle factory ppurchased.

●In 1958 the Honda 50cc Supercub was introduced.

●Overnight Honda was overwhelmed with Supercub orders. In 1959 Honda had a 23% market share in Japan

Honda enters U.S market●Honda is the first Japanese company to begin the invasion.

●No strategy. Just to see what they could sell (What a strategy!!!).

●The start-up inventory with 25% of each of its four products: The 50cc Supercub. The 125cc. The 250cc The 305cc .

●Los Angeles becomes the base of operations in the start.

●In 1960 , the first machines had problems.

●Honda redesigned the motor for the US market.

●By 1964, 1 of 2 motorcycles in the US sold was a Honda.

●Early 1970's Japanese manufactures accounted for more than 85% of U.S motorcycle sales.

●At the end of 1970's, Honda dethroned Harley from market leader in heavyweight motorcycles in United States

S• High and powerful research and

development R & D  • Innovation • Best market share leadership • Strong and powerful brand equity • Different and unique products  • Popularity is termed as one of the best strength of the which results in betterment for the company

T One of the major threat is the economic

slowdown.• All the external changes for instance taxes, politics as well as government are the major threats for the Honda Company • Another threat is the lower cost competitors • Price war is also consider as an Important threat for this company • Oil prices are contributing a lot towards the loss of the Honda company • Second movers are the major threat for the Honda company • Substitute products are the major threats for the Honda company 

W Cost structure of the Honda is high as compare to other automobile manufacturers • Honda focus more on international deposits as compare to domestic deposits  • Honda products are termed as inoffensive in terms of style and design • In truck line, the Honda Company is not offering strong products and proposals•

O Honda has the best opportunity to use its R & D in

producing cars according to the needs and demands of their customer. This is only possible because of the

increase is in demand for less pollution cars. • Various models there are the which caters the lower

segment • Fuel efficiency is now a days termed as one of the best

opportunity the which cans results in the best productivity for the company 

• Alliances are the best opportunities for the Honda Company 

• Honda cans increase of its production by focusing on sales and research 

Thank you .!.