About Harley Davidson
Harley Davidson motorcycles date back to 1903, when Harley and Davidson families in a
wooden shed in the Davidson backyard built motorcycles in evenings and weekends. They were
helped by Ole Evinrude, who became a well known manufacturer of outboard motors.
Starting with 1915 the production increased to 18000 machines per year and another brand,
Indian joined it in dominating the US two wheel machine industry.
Harley Davidson motorcycles were used by the US army both in the first and second World
War.
Harley Davidson
SWOT Analysis in the 1960’s
Strengths:
High market-
High quality
High brand awareness
Stable contracts
Experience
Opportunities:
Economic boom
American product
New categories of customers-
Improved image of motorcyclist
Increase in the market
Weaknesses
Reluctance to change – when Honda penetrated the market with new strategies and products
Low managerial skills- the result: they didn’t react
No adequate promotional strategy- image
Underestimate the competition
No permanent marketing research
No diversification of the products
Bad distribution- they didn’t have many dealers, the existing dealers were located on the outskirts
of the cities, where the gangs felt more comfortable
Price – too high compared to the other existing similar products
No policy for acquiring new customers
High labour cost
Threats:
The car industry started to develop
Entrance of the Japanese competitors
Harley Problems
-Omission of changes
-They needed to do something to correct the weaknesses
-When a new product entered the market they didn’t do anything to protect their products.
-The image of motorcyclists was associated to the black leather jackets gangs and violence
-Their biggest problem was Honda appearance
Alternatives
-Continuos marketing research
-Be less self conceited
-Improve the services
-Be productive/ dynamic on the market
The Strategy Chosen
- Harley Davidson became more a luxury producer with high prices and quality and addressing to a
small range of customers.
Honda SWOT Analysis
Strengths:
Wide range of products
Advertising was given the key role in the invasion : Honda wanted to promote the idea that riding
a motorcycle is fun.
A good distribution network
High market share:
Honda 45.6%
Yamaha 18.9%
Suzuki 10.7%
Kawasaki 14.4%
Harley Davidson 5.7%
Low prices- because of the cheaper labour cost
Price/ Quality ratio
Penetration pricing- low prices in the beginning in order to enter the market
The firm got to be known because of the motor races – by 1961, Honda won World
Championships in the 125-cc and 150-cc engine classes
Opportunities
Economic boom
New categories of customers
The image of motorcyclist is changed
Weaknesses
The sales of motorcycles was very low at the beginning – only 167 units were sold during the first
year
“Puny” products
Social acceptance
Brand awareness
Threats
A non American product – Americans prefer the American products to the foreign ones
The Vietnam War- The 18-25 year olds went in the war and this reduced drastically the Honda
sales. They represented 50% of the buyers of Honda.
Banks were reluctant to finance purchases for draft age buyers
Honda Problems
Their problem was in the beginning when they were trying to enter the US market. They had to deal
with the patriotic feelings of the Americans which were not willing to buy non American products.
Another problem was the low brand awareness, as they were just entering the market.
Strategies:
Invasion Strategy
Their policy was to create a demand, not only to satisfy the existing demand.
Advertising was given a very important role in penetrating the US and international market.
Promotional strategy
The purpose of advertising campaign was to win social acceptance for the motorcycle and its rider.
Their strategy was to create a fresh image for the Honda motorcycle and to educate the general public
to a new mode of transportation.
Some slogans they used: “Holidays and Honda Days”, “Go Happy, go Honda”, “You meet the nicest
people on a Honda”.
Product Strategy
They introduced a smaller (50-cc) and cheaper model, the lightweight bikes.
By 1965, 14 new models were available on the market (from 50-cc to 305-cc). In 1966 a larger 450-
cc bike was added to compete with the Harley Davidson models. Finally they introduced the 1100-cc
model as large as any Harley Davidson.
But their prices were lower, as they used a cheaper labour force.
Handling Service Problems
More mechanics were trained, more warehouses were opened, and existing warehouses were
enlarged.
Distribution Strategy
They changed the approach and they located its dealers in the center of the town. By 1965, more than
1500 Honda dealers were located in every state making the product readily available. (Harley only
had 880 dealers).
In 1965 they also introduced rental services, which raised to 40 million dollars.
During the Vietnam War they increased advertising expenditures, from 6 to 7 million. They also
began to pursuit women to buy motorcycles.
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