Challenges and Opportunities Faced by Harley Davidson

Marketing Case Study
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Table of Contents
Challenges and Opportunities Faced by Harley Davidson 3
Global and Domestic Context Being Faced by the CEO 4
Recommendations to Increase Sales and Stock Value 6
References 8
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Challenges and Opportunities Faced by Harley Davidson
Founded in 1903, Harley Davidson can be considered as one of the most iconic American
Motorcycle company in the world. It company is known for its rich history, incomparable
craftsmanship and extremely loyal fan following. Though known for its heavyweight
motorcycles that have engine dimensions of more than 700 cm3 the company has broadened its
product offerings in order to remain competitive in the id and smaller motorcycle segments
(Catulli, Cook & Potter, 2017). Followers of the Harley Davidson brand are known to be
extremely passionate about their motorbikes the company enjoys an extremely premium brand
value in the market but in order retain this brand identity the company has to update their designs
and innovate there technology continuously.
The company like every other American company has been adversely affected y te recent socio
cultural changes that have taken place in their primary market, the United States, and the
international and domestic trade barriers that have come into existence. The brand has also taken
a hit from several severa media giants like The Guardian who identified he motorcycles as “Fuel
Guzzling Gods” and noted that the company is not appealing to the younger consumers anymore
and the ocre community of harleys are gradually ageing out (Coutinho, de Mesquita\ & de
Muylder, 2018). The company has also faced several trade tariffs while attempting to intensify
their presence in several international markets. In an attempt to sidestep such tariff rates the
company opened several assembly plans in India and brazil, taking advantage of the free trade
zone. Recently they faced challenges from their own domestic market in the form of steel tariffs
that amounts to a cost of 30 million.
With the election of Donald Trump as the new President of the United States and his America
first agenda the company faes new odds as its tries to keep its production in the United States.
The countries that are developing at a rapid pace have introduces new opportunities for the
company as they represent an increasing market of greater dead and improved infrastructure and
the allowing of better distribution and usage of motorcycles. By opening factories in India and
Brazil the company has attempted to utilize this ourtunities and by opening new stores in these
countries the company sees a whole new market that can be explored.
Harley Davidson has recently announced that it will close its Kansas City, MO factory, which is
one one the five factories that company operates in the country (Albareti, et al. 2017). The
timing being simultaneous with their opening opening of the Thailand factory has garnered a lot
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of attention and critical reactions from the government and media. Though many blame the
company shipping jobs offshore n the steel tariffs that have been imposed by the new President
as a result pulling out the United States from the Trans Pacific partnership, the company has
stated that the factory was closed as a result excess capacity in the States and is completely
unrelated to the opening of the Thailand factory. They also stated that the decision of opening the
Thailand factory was made to avoid 60% import tariffs and to gain further tax breaks when
exporting to neighbouring countries.
At this juncture of a changing domestic socio political scenario with a President vehemently
criticising their own domestic companies, Harley Davidson, an iconic American brand finds
itself in a difficult position while trying to grow in the international market, which is crucial for
its survival while simultaneously retaining their domestic brand value (Trendafilov, 2015). The
market for heavyweight motorcycles in the US is shrinking while the international demand for
Harley’s is increasing and thus domestic operations are becoming less and less profitable.
Branding itself as a strictly All American entity throughout its years of operation the company
finds itself in a precarious position. Harley Davidson expects a 50% growth in their international
sales by the year 2027 and they believe that their Thailand factory will play a crucial role in
establishing themselves in the Southeast Asian markets. But the company’s loyal domestic
following on which the company has relied on for creating and retaining its brand value has
criticised their new policy of shifting jobs and operations from America.
The struggles that is being faced by Harley Davidson is similar to that of many other American
brands who face similar predicaments with the shift in socio political and environmental
scenarios of their domestic and primary market (Guillotin & Kwon, 2018). While the number of
international markets with high demand for their products are increasing day by day due to
economic improvements and socio cultural preferences, their domestic market is deteriorating
due to inefficient and unstable administrative decisions. They all face the same dilemma for
retaining their American brand image while operations to more profitable countries. As more and
more brands utilise international opportunities, one thing that will need to be observed is that
whether the administration will change their policies to cater to domestic brands in order to
remain competitive ad retain jobs in the country.
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