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(Answered) HARLEY-DAVIDSON Style and Strategy with a Global Reach Harley-Davidson's American success story began in 1903 when two friendsWilliam Harley and...


HARLEY-DAVIDSON Style and Strategy with a Global Reach Harley-Davidson's American success story began in 1903 when two friendsWilliam Harley and...


Read the Harley Davidson Case Study in Ch. 5 of Management, p. 445.Prepare a 1,400-word summary of the advantages and disadvantages a manager might experience in using foreign subsidiaries to sell their product.Format your paper consistent with APA guidelines.Click the Assignment Files tab to submit your assignment.HARLEY-DAVIDSON Style and Strategy with a Global Reach Harley-Davidson’s American

 

success story began in 1903 when two friends—William Harley and Arthur Davidson—

 

built a motorized bicycle in a machine shop in Milwaukee, Wisconsin.1 The progeny of

 

that Frst machine now travel the world—with speed and style. Now the Harley Hog is

 

going electric. Bloomberg/Getty Images Harley’s Roots When Harley-Davidson was

 

founded it was one of more than 100 Frms producing motorcycles in the United States.

 

By the 1950s, it was the only remaining American manufacturer.2 But in the 1960s,

 

Honda began sales in the United States and Harley had di±culty competing against the

 

Japanese Frm’s smaller bikes. The American Machine and ²oundry Co. (AM²) bought

 

Harley in 1969 and quickly increased production.3 However, this rapid expansion led to

 

signiFcant problems with quality, and the better-built Japanese motorcycles began to

 

take over the market.4 A group of 13 managers bought Harley-Davidson back from AM²

 

in 1981 and began a turn around with the rallying cry “The Eagle Soars Alone.” Richard

 

Teerlink, former CEO of Harley, explained: “The solution was to get back to detail. The

 

key was to know the business, know the customer, and pay attention to detail.”5 The

 

goals driving this turn around were increasing quality and improving service to

 

customers and dealers. Consolidation and Renewal In 1983 Harley-Davidson asked the

 

International Trade Commission (ITC) for tari³ protection on the basis that Japanese

 

manufacturers, including Honda, were stockpiling inventory in the United States and

 

providing unfair competition. The request was granted. Harley was conFdent enough in

 

1987 to petition the ITC to have the tari³ lifted because the company had improved its

 

ability to compete with foreign imports. Once Harley’s image had been restored, the

 

company began to increase production and open new facilties.6 The average Harley

 

customer in the 1980s was male, late thirties, with an average household income above

 

$40,000. Teerlink said: “Our customers want the sense of adventure that they get on

 

our bikes… . Harley-Davidson doesn’t sell transportation, we sell transformation. We sell

 

excitement, a way of life.”7 The company created a line of Harley accessories available

 

online, by catalog, or through dealers, all adorned with the Harley-Davidson logo. These

 

jackets, caps, T-shirts, and other items became popular with nonbikers as well. In fact,

 

the clothing and parts had a higher proFt margin than the motorcycles; nonbike

 

products made up as much as half of sales at some dealerships. Global Expansion

 

Although Harley had been exporting motorcycles ever since it was founded, it was not

 

until the late 1980s that management invested seriously in international markets.

 

Traditionally, the company’s ads had been translated word for word into foreign

 

languages. Now, new ads were developed speciFcally for di³erent markets and Harley

 

rallies were adapted to Ft local customs.8 Harley actively recruited dealers in Europe

 

and Japan, built a large parts warehouse in Germany, and purchased a Japanese

 

distribution company. Harley’s management learned a great deal from these early

 

international activities. Recognizing, for example, that German motorcyclists rode at

 

high speeds—often more than 100 mph—the company began studying ways to give

 

Harleys a smoother ride and emphasizing accessories that would give riders more

 

protection.9 Its Japanese subsidiary adapted the company’s marketing to Ft local tastes,

 

even producing shinier and more complete toolkits than those available in the United

 

States. Harley bikes are now symbols of prestige in Japan, and many enthusiasts see

 

themselves as rebels on wheels.10 The company has also made inroads into the

 

previously elusive Chinese market. It partnered with China’s Zongshen Motorcycle

 

Group, which makes more than 4 million small-engine motorcycles each year.11 Despite

 

China’s growing disposable income, the new store has several hurdles ahead of it,

 

including riding restrictions imposed by the government in urban areas. The ²uture The

 


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