Harley-Davidson Case Analysis

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Harley-Davidson Case Analysis

Harley-Davidson should tailor is product and service offerings to the 55-64 year old segment, and expand its Rental and Rider’s Edge programs to continue growing
Market leader in motorcycles - Market leader with 50% domestic and 32% global market share in motorcycles - Stock prices CAGR since 1989: 32% - American legendary lifestyle brand - Loyal customers: 900,000 members in Harley-Davidson Owner Group - 50% of sales to repeating customers - Average customer age grew from 35 in 1994 to 47 in 2004 - Young customers are not attracted by the brand - Women are still only 10% of clients - 2005 sales target cut back by 10,000 bikes - Stock price dropped 17%

Ageing customer base and difficulty to attract new clients

How can Harley-Davidson continue to grow despite its ageing customer base and difficulty to attract new customers? Harley-Davidson should: Adapt product and service offering to cater for the 55-64 year-old segment, retaining it for 10 years longer Expand the rental program to increase seeding, bringing more new customers into the base Expand the Rider’s Edge program to increase seeding in the underexplored women and young segment

Harley-Davidson dominated the US market during the first half of the 1900’s, but lost share to the devastating competition of Japanese manufacturers towards the 70’s
1908 – 1920’s 1930’s – 1950’s Strong brand image - Famous ambassadors - National symbol status Powerful/large motorcycle 1960’s – 1970’s Strong brand image - Ambassadors - National symbol status

Competitive advantage

Innovation Performance in race-tracks

Competitors

Indian Motorcycles

European entrants Hands-on men; untraditional, “rugged” lifestyle

Japanese entrants
Harley-Davidson Japanese

Motorcycle Market

Family, women, younger, older 66% 60% 15%

HDI Market share

The Japanese entrants…...

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