Advantages and Disadvantages of Export, Joint Ventures, and Foreign Subsidiaries for Harley-Davidson

This document discusses the advantages and disadvantages of using exports, joint ventures, and foreign subsidiaries for Harley-Davidson. It explores the impact on profitability and quality, as well as cultural factors for positioning in different nations.

Running head: CONTEMPORARY BUSINESS MANAGEMENT
Contemporary Business Management
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Case #5 Harley-Davidson
Advantages and disadvantages of using exports, joint ventures, and foreign subsidiaries
Harley-Davidson is one of the most reputed brands of the world and the concerned
firm had been able to gain success by means of earning the loyalty of the customers and also
through its extreme focus on the aspect of quality1. However, when the sale of the bikes and
other non-biking products manufactured by the firm in USA and overseas markets is taken
into account it is seen that more than 75% of the revenue generated by the firm comes from
the USA market itself2. On the score of this, the concerned firm as a means to increase its
profitability is looking to expand its business into the other nations of the world. In this
regard, foreign exports is perhaps one of the most preferable choices since it will enable the
firm to manufacture bike following the attribute of quality and customization that the firm
had been using since 1903 and also the quality of these bikes and other non-biking will not
fluctuate in the different nations in comparison to USA. However, the major disadvantage of
this would be the fact that because of the export charges, tariff charges and other that the firm
would have to pay for exporting their products to the diverse nations, the customers would
have to pay a higher amount of price3. This is important because of the fact that, in nations
like Japan, China, Germany and others the number of options which are available to the
customers is very high and thus it is obvious that they until and unless they are not highly
passionate about the concerned brand they would not opt for the product. On the other hand,
if the firm decides to take the help of the methods of foreign subsidiaries and joint ventures
1 Harley-Davidson.Com. "Harley-Davidson International". 2019.
https://www.harley-davidson.com/ap/en/index.html
2 Harley-Davidson.Com. "Harley-Davidson International". 2019.
https://www.harley-davidson.com/ap/en/index.html
3 Morschett, Dirk, Hanna Schramm-Klein, and Joachim Zentes. Strategic international management. Springer,
2015.

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then this is likely to adversely affect the quality of the bikes offered by the firm because of
the extreme focus of the concerned firm on quality and customer experience. More
importantly, these aspects might not be important for the firms with whom they are entering
into joint venture or giving subsidies and they might just look to use the brand name of
Harley-Davidson to earn a higher amount of profit.
Cultural factors for positioning
In the nations like Japan, China, France, and Brazil, Harley-Davidson is trying to
integrate the national cultures of these nations into the framework of the products that it
offers to attain a unique market position. The net result of this is that rather than focusing on
the attributes of adventures and others like it does in the nation of USA, the concerned firm
and its bikes in Japan has become a symbol of prestige. It is pertinent to note that the
Japanese people are very concerned about power distance and prestige and these cultural
attributes are being used by the concerned firm to attain a unique market position in the
concerned nation4. Furthermore, in the nation of German, the concerned firm takes into
effective consideration the desire of the bikers to ride at more than 100 mph and thereby
offers the kind of bikes which fulfills this need or the desire of the bikers. Thus, it can be said
that the firm under discussion here is exploiting the cultural factors of the different nations
for attaining a unique market position.
Case #6 In-N-Out Burger
Rich Snyder and his leadership
Rich Snyder, who assumed the control of In-N-Out Burger at the age of only twenty
four years after the death of this father, had proved to be asset for the concerned restaurant.
4 Deresky, Helen. International management: Managing across borders and cultures. Pearson Education India,
2017.

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This can be explained on the basis of the fact that the effective leadership attributes as well as
skills which he employed for the management of the diverse aspects of the restaurant chain
had helped in the growth of the concerned restaurant chain in a significant manner. For
example, he continued to use some of the positive approaches used by his father and
introduced newer ones of his own to further the growth of the restaurant chain. Furthermore,
just like his father, rather than offering a plethora of fusion cuisines to the customers he
restricted the menu of the restaurant to just four items. More importantly, he insisted on
offering the best quality friendly customer service and that too in a clean environment so as
win the trust as well as the loyalty of the customers5. In addition to this, rather than taking the
help of the method of ‘hire and fire’ he adopted the kind of employee management method
wherein the employees were offered adequate training so that they can not only contribute in
an effective manner towards the growth of the restaurant chain but at the same time grow
with it as well. More importantly, he insisted on perfection and did not let his young age
come in the way of his leadership or management initiatives. Thus, it can be said that the
success gained by him and his restaurant chain clearly indicates that age does not really
matter in entrepreneurship.
In-N-Out Burger and its strategies
Burns and Dewhurst6 have articulated the viewpoint that the strategies used by a
particular firm greatly determines its organizational or business prospects. On the basis of
this, it can be said that the success attained by In-N-Out Burger over the years can be
attributed to the effective strategies pursued by it. For example, rather than offering a wide
range of food products to the customers and thereby compromising on their quality, the
concerned restaurant focuses to perfect four food items which it is currently offering to the
5 In-N-Out.Com. "In-N-Out Burger:Home". 2019 . http://www.in-n-out.com/
6 Burns, Paul, and Jim Dewhurst, eds. Small business and entrepreneurship. Macmillan International Higher
Education, 2016.

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customers with extra care that the service offered to the customers is not only friendly but
also in synchronicity with their expectations. More importantly, the strategy to retain
employees rather than hiring new ones is another important strategy which had contributed in
a significant manner towards its growth. In this regard, it needs to be said that Rich Snyder
realized the fact that if his restaurant chain was to expand the he would need loyal employees
who would understand the culture and values of the restaurant chain. It is with this objective
that he continued to pursue this strategy for the growth of the firm. More importantly, the
effective usage of these two strategies have clearly given In-N-Out Burger an edge over the
other fast-food restaurants which are currently struggling with quality and employee attrition
issues.
Case #7 Amazon
Bezos’s systematic and intuitive thinking
Bezos’s decision to develop and deliver the Kindle and Kindle Fire, and Fire TV lines
shows his systematic and intuitive thinking as well as his entrepreneurial skills. Zahra and
George7 are of the viewpoint that one of the most important marks of great entrepreneurs is
the fact that they are quick to realize the business opportunities presented by the market and
thereby formulate ideas for the effective utilization of the same. In this regard, it needs to be
said that Bezos was quick to realize the fact that the era of reading hardcover books had
become over and the individuals are showing higher propensity towards e-books. The success
attained by Kindle of Bezos clearly indicates not only this trend but at the same time his
effective utilization of this business opportunity. More importantly, the Kindle Fire and Fire
TV lines which had been designed keeping into perspective iPad and Apple TV had not only
give tough competition to a firm like Apple but at the same time scored better than them. On
7 Zahra, Shaker A., and Gerard George. "International entrepreneurship: the current status of the field and future
research agenda." Strategic entrepreneurship: Creating a new mindset (2017): 253-288.

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the basis of these facts it can be said that these initiatives of Bezos clearly indicate his
entrepreneurial skills and also his systematic or intuitive thinking.
Competitive risk in Amazon’s environment
One of the major reasons for the unprecedented success as well as the monopoly that
the firm Amazon had been able to gain in the e-retail business market is because of the fact
that it was one of the very first ones to realize the opportunities presented by the e-retail
business. However, in the present times it is seen that taking lead from Amazon, different
international business firms like Wal-Mart, Barnes and Noble and others have started their
own line of e-retail business which if not presently then in the longer run can pose a
significant amount of competitive risk to Amazon. This can be explained on the basis of the
fact that these initiatives of the other firms will significantly increase the number of options
or choices that the customers will be having and thereby the tendency to switch brands on
their part would also increase in a substantial manner. More importantly, in the recent times it
is seen that some of the high-end firms like Target, The Gap and others have pulled out of
Amazon and if they enter into collaboration with these firms then they can pose a significant
amount of competitive risk to Amazon.

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References
Amazon.com. "Amazon International Shopping And Shipping Made Easy". 2019.
https://www.amazon.com/International-Shipping-Direct/b?ie=UTF8&node=230659011
Burns, Paul, and Jim Dewhurst, eds. Small business and entrepreneurship. Macmillan
International Higher Education, 2016.
Deresky, Helen. International management: Managing across borders and cultures. Pearson
Education India, 2017.
Harley-Davidson.Com. "Harley-Davidson International". 2019. https://www.harley-
davidson.com/ap/en/index.html
In-N-Out.Com. "In-N-Out Burger:Home". 2019 . http://www.in-n-out.com/
Morschett, Dirk, Hanna Schramm-Klein, and Joachim Zentes. Strategic international
management. Springer, 2015.
Zahra, Shaker A., and Gerard George. "International entrepreneurship: the current status of
the field and future research agenda." Strategic entrepreneurship: Creating a new
mindset (2017): 253-288.