Marketing Management Case Study: Harley Davidson Expansion in Egypt

This report provides a comprehensive marketing plan for Harley Davidson's expansion into the Egyptian market. It begins with an overview of Harley Davidson and then delves into a situational analysis, including PESTEL, Porter's Five Forces, and SWOT analyses to evaluate the external and internal environments. The report identifies success factors for expansion, recommends a market entry mode (Foreign Direct Investment), and defines the target market based on demographic, geographic, behavioral, and psychographic segmentation. It then outlines marketing strategies tailored to the Egyptian market and concludes with recommendations for successful market entry and sustainable growth. The report addresses the specific requirements of the assignment, which include market entry methods, target market analysis, and marketing strategies. The case study leverages the provided facts and figures about Harley Davidson and the Egyptian market to develop a strategic plan for international expansion, aligning with the company's goals for international business growth and environmental sustainability. The analysis incorporates the unique social and economic factors of Egypt, such as the rising trend of female riders and the growing awareness of green technology, to inform the marketing strategies.

Running head: MARKETING MANAGEMENT FOR HARLEY DAVIDSON
MARKETING MANAGEMENT FOR HARLEY DAVIDSON
Name of the student
Name of the University
Author note

1MARKETING MANAGEMENT FOR HARLEY DAVIDSON
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................3
Overview of the Company.....................................................................................................3
Situational Analysis...............................................................................................................3
PESTEL Analysis...............................................................................................................3
Porter’s Five Forces...........................................................................................................6
SWOT Analysis.................................................................................................................6
Success Factors for Expansion...............................................................................................7
Market Entry Mode................................................................................................................8
Target Market.........................................................................................................................9
Marketing Strategies..............................................................................................................9
Recommendations................................................................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13

2MARKETING MANAGEMENT FOR HARLEY DAVIDSON
Introduction
The competitive nature of business environments requires the organizations operating
within their scope to strategize means in order to enable their growth and development in an
efficient manner. There are various strategies that can be adopted by business organizations
in order to propagate such growth within the scope of their business. These growth strategies
can be identified to be market penetration, market expansion, product expansion,
diversification and acquisition (Hill, Jones and Schilling 2014). The strategy of expansion
involves the selling of the services and products manufactured by a company into markets,
which the organization does not operate in currently. Such a strategy may be adopted by
business organization due to various reasons including the lack of possibility if growth in the
present market, or the scope of growth in the new target market identified. The essay will
further focus on the strategy of expansion that may be adopted by the motor company Harley
Davidson into the market of Egypt. Harley Davidson is a motorcycle manufacturing company
based in the United States of America, with its headquarters in Wisconsin. The company was
founded in the year 1903 and is widely recognized for the customization of the chopper
styled motorcycle. Owing to its popular brand presence in the global community, the
company may choose to optimize the scope of their business through the growth strategy of
expansion (Triwastuti 2017). For this purpose, the suitability of the targeted market will be
analyzed on the basis of the political, economic, social, technological, environmental and
legal factors that may affect the operations of the company. Furthermore, the mode in which
the company will enter the market will be analyzed on the basis of an evaluation of the
external business environment.

3MARKETING MANAGEMENT FOR HARLEY DAVIDSON
Discussion
Overview of the Company
As mentioned earlier, the company Harley Davidson is one of the most recognized
manufacturers of motorcycles in the world. The successful business operations of the
company has enabled it to withstand several challenging situations in its business
environment such as the Great Depression, a number of arrangements regarding ownership,
spans of poor product quality and economic health and the like. The company has
manufacturing units in four countries except the locations in the United States of America
namely Australia, Brazil, India and Thailand (Harley-davidson.com 2020). The positive
brand presence and identity of the company has enabled it to expand across geographical
boundaries and utilize the imagination and innovation in order to cause a revolution in
transportation and the motorcycle culture. The company has also laid out certain strategies for
the purpose of achieving profitable growth. These strategies include the expansion of the
community of Harley Davidson customers, propelling the growth of international business of
the company by 50% by the year 2027, launching of 100 new high impact motorcycles and
the delivering of superior returns on invested capital (Investor.harley-davidson.com 2020).
Furthermore, the company also strives to achieve growth in business along with a reduction
of impact on the environment.
Situational Analysis
A situation analysis provides an evaluation of the internal and external environment in
which a business organization operates, thereby identifying the business capabilities,
opportunities and threats that may be faced by the organization in the market (Burns, Bush
and Sinha 2014). The following section will provide an analysis of the business environment
of Harley Davidson with respect to its expansion strategy in Egypt.

4MARKETING MANAGEMENT FOR HARLEY DAVIDSON
PESTEL Analysis
 Political factors – The political factors that may affect the business operations of
Harley Davidson in Egypt include free trade agreement, political stability of the
country, inter-governmental support for patent protection, support for e-commerce,
excise duties and the like. The agreement between Egypt and the US to improve trade
relations between the countries acts as an opportunity for the company to expand
(Ustr.gov 2020). Furthermore, the efforts of the Egyptian government to improve
digital economy in the country influences the growth of e-commerce, which is
beneficial to Harley Davidson (Dailynewssegypt.com 2020). However, the political
instability in the country may be regarded as a threat for successful business
expansion.
 Economic factors – The economic factors affecting the business operations of the
company in Egypt include the GDP of the country, disposable income of the
customers, economic growth of the automotive industry and stable accessibility of
credit. Egypt is one of the most developed countries in Africa having a stable GDP
and therefore provides an opportunity to the company for expansion (Hogg 2020).
The customers also have an increasing purchasing power due to the economic growth
in the country. The cost of labor is also low in the country, which can be efficiently
utilized by the company. The credit accessibility in the country is also improving,
thereby acting as an opportunity for Harley Davidson.
 Social factors – Social factors affecting the business operations of Harley Davidson
in Egypt include the tastes and preferences of the customers on the basis of
demography and attitudes towards green technology. There is a rising trend in the
country for women to ride bikes, braking the barriers of gender
(Womenofegyptmag.com 2020). This trend may prove to be an opportunity for the

5MARKETING MANAGEMENT FOR HARLEY DAVIDSON
company to expand into the country through the increase of target customer base.
Furthermore, awareness about global environmental concerns have increased the
preference of the Egyptian customers towards green technology. This is aligned with
the aforementioned strategies of the company.
 Technological factors – The technological factors affecting business operations of
Harley Davidson include investments in research and development, advancements of
technology in the automobile industry and availability of green technology. Harley
Davidson being one of the leading motorcycle manufacturers in the world, strategize
to improve their competitive advantage in the market through the use of advanced
technology, thereby enabling their successful expansion in Egypt
(Washingtontimes.com 2020).
 Environmental factors – The environmental factors affecting the business operations
include the company’s interest in business sustainability and regulations for emissions
and carbon footprint. As mentioned earlier, the company has adopted the strategy of
business sustainability in order to perform their responsibilities towards the
environment and the local and global communities. Due to the awareness about the ill
impacts of climate change, the country has adopted several regulations to control the
rate of carbon footprint and emissions (Egyptindependent.com 2020). If Harley
Davidson can maintain these standards and follow the regulations, it can be regarded
as an opportunity for business expansion.
 Legal factors – The legal factors affecting business operations of Harley Davidson in
Egypt include various regulations regarding employment, wages, standards of quality,
health and safety of customers, environment protection laws and emission regulations
(Hg.org 2020). These strict regulations may prove to be a threat to the successful
business operations of Harley Davidson. However, they can be removed through

6MARKETING MANAGEMENT FOR HARLEY DAVIDSON
proper maintenance of quality standards of the products and adoption of business
sustainability.
Porter’s Five Forces
The framework of Porter’s Five Forces helps in the evaluation of the competitive
environment in which the business organization operates. The various competitive forces
acting upon the organization includes the threats of new entrants, substitutes, bargaining
power of buyers and suppliers and competitive rivalry (Dobbs 2014). The company faces
moderate threat of new entrants due to moderate economies of scales and switching costs.
Furthermore, the high costs of brand development prevents the entry of new organizations in
the market. The company faces moderate to high threat of substitutes due to the availability
of other modes of transport such as cars, scooters and the like (Zaharia, Muşetescu and Chira
2015). The company faces high threat from the bargaining power of buyers because of the
availability of a large number of substitutes, competitors and information about the latest
advancements in the automobile industry. The company face a low threat from the bargaining
power of the suppliers due to the presence of a large number of suppliers and stability in the
supply chain. The company faces high threat of competitive rivalry due to the presence of a
large number of competitors in the Egyptian market (Roese and Kompella 2017).
SWOT Analysis
Strengths Weaknesses
 Positive brand identity and image
 High rate of customer satisfaction
rate and brand loyalty
 High quality of customer services
after purchase
 Lack of diversity in products
 Limited reach of market
 Limitations of supply chain

7MARKETING MANAGEMENT FOR HARLEY DAVIDSON
 High quality of products
Opportunities Threats
 Global expansion
 Partnerships and collaborations with
local businesses and suppliers
 Product diversification
 Use of efficient marketing strategies
 Corporate Social Responsibility
activities
 Economic growth of Egypt
 Advancements in green technology
 Presence of a large number of
competitors
 Increasing cost of fuel
 Preference for electric vehicles
 Political instability in Egypt
Success Factors for Expansion
From the situational analysis conducted for Harley Davidson and its potential for
business expansion in Egypt, it can be deduced that there are several success factors that may
propel such an expansion. These factors include the potential for increasing the customer base
of the company in a new market. As mentioned earlier, there is a growing trend of women
bikers breaking the barriers of gender in Egypt. Hence, the target market of Harley Davidson
in Egypt will consist of a large number of customers irrespective of their gender.
Furthermore, another success factor for business expansion is the alignment of the
sustainability strategies of the company with the preference of the customers towards the use
of green technology (Pickett 2018). Being a globally recognized brand in the automobile
industry, Harley Davidson may also make investments in research and development for the
purpose of increasing the fuel efficiency of the motorcycles. The economic growth of Egypt
can also contribute to the success of the business expansion undertaken by the company

8MARKETING MANAGEMENT FOR HARLEY DAVIDSON
(Ibrahiem 2015). Furthermore, the company maintains a high standard of quality for their
products and services thereby enabling the generation of optimum customer satisfaction and
brand loyalty.
Market Entry Mode
Market mode entry can be described as the method that is adopted by business
organizations in order to enter a foreign market. The various means by which an organization
may enter a foreign market includes exporting, licensing, formation of joint ventures,
outsourcing, mergers and acquisitions or foreign direct investments (Ang, Benischke and Doh
2015). The market entry mode suggested for Harley Davidson for the expansion of its
business in Egypt is through foreign direct investments. This mode of entry refers to market
entry of a business organization in a new country with the help of investments from financial
institutions. The extent to which a company may avail foreign direct investment for its
expansion is in turn subject to the governmental regulations of the country.
The advantages of foreign direct investment includes the scope for market
diversification, lower costs of labor, subsidies and economic simulation (Stoian and Mohr
2016). However, the disadvantages of foreign direct investment includes the strictness of
government regulations in the host country, displacement of the local businesses and profit
repatriation.
This mode of entry is most suitable for Harley Davidson because the foreign direct
investment regulations in Egypt are favorable for business expansions from other countries
(Nnadi and Soobaroyen 2015). Furthermore, the labor cost in Egypt is low, which can be
efficiently exploited by the company.

9MARKETING MANAGEMENT FOR HARLEY DAVIDSON
Target Market
The target market for Harley Davidson in Egypt can be evaluated on the basis of the
segments of demography, behavior, geography and psychography.
 Demographic segmentation – The demographic segmentation of the target market
includes mostly male individuals within the age group of 35 to 65 having middle to
high income levels (Coutinho, de Mesquita and de Muylder 2018).
 Geographic segmentation – The geographic segmentation includes individuals
residing in the countries where the company operates, both in urban and rural areas.
 Behavioral segmentation – The behavioral segmentation of the company includes
individuals who conduct extensive research before purchasing motorcycles on the
basis of feedback presented by previous customers. This segmentation is also based
on the brand loyalty of the previous customers (Huang 2017).
 Psychographic segmentation – The target market of Harley Davidson can be
efficiently identified on the basis of the psychographic elements such as lifestyle of
the customers, personality, attitudes and values. In this regard, it can be mentioned
that the customers of the company have a high quality of lifestyle who prefer using
premium motorcycles with the latest innovative technology (Wolburg 2014).
Marketing Strategies
The adoption of efficient marketing strategies are essential for business organizations
as it helps them to develop effective relations with the customers along with the provision of
adequate information on the products and services that are offered to the targeted customers.
The marketing strategies adopted by Harley Davidson are based on building a positive brand
identity in the automobile industry (Nadeem 2015). The vision of the company is to fulfill the

10MARKETING MANAGEMENT FOR HARLEY DAVIDSON
dream of personal freedom for the customers (Harley-davidson.com 2020). In this regard, it
can be said that the company prioritized the provision of a personalized experience to the
customers through a consideration of their demands and preferences. For this purpose, the
company provides options for modification and customization of the motorcycles according
to the needs of the customers with respect to the color, seats, wheels, exhausts, backrests and
the like. The company has also built an extensive dealership network so as to make the
products available to customers residing anywhere in the world. The marketing mix of the
company can be further evaluated to identify the means by which the company chooses to
promote its brand and products.
 Product – The products manufactured and sold to the target customers by Harley
Davidson includes motorcycles, engines, accessories and parts, personalized,
customizable merchandise, apparel under the MotorClothes brand and rental services
(Catulli, Cook and Potter 2017). Furthermore, the company also provides after sales
services to the customers.
 Price – The Company has adopted a premium pricing strategy, thereby making the
products available to customers belonging from middle and high income groups
(Donavalli 2016). Such premium pricing is justified as the company provides high
quality standards for its products and services, thereby building a significant amount
of customer satisfaction and brand loyalty.
 Promotion – The products and services of Harley Davidson are promoted efficient
communication strategies along with the elements of personal selling, advertising,
public relations, direct marketing and sales promotion. Furthermore, the company also
makes efficient use of online platforms such as its official website, blogs and social
media websites for the purpose of promoting its products and services (Whiting and
Deshpande 2014).

11MARKETING MANAGEMENT FOR HARLEY DAVIDSON
 Place – The places where products and services provided by Harley Davidson are
made available to the target customers include authorized dealers, authorized rental
dealers, and the online stores of the company. In this manner, the products are made
available to the customers throughout the world, both in urban and rural areas.
Recommendations
Certain recommendations can be provided to Harley Davidson that may help them to
develop their business strategies according to the needs of the target market and successfully
expand the scope of the business in Egypt. These recommendations include the following:
 Partnerships and collaborations – The Company may form tactical relations with
local suppliers and dealers of motorcycles in the country so as to increase the cost
efficiency of business activities and reach out to the customers in an easy manner.
Partnerships with local suppliers will reduce the cost of exporting raw materials for
the company, and enable them to utilize their resources for marketing their brand
instead.
 Development of green technology – The Company may invest in research and
development in order to make advancements in the technology available to them and
adopt sustainable business practices. This will not only help them to adhere to the
environmental regulations of the country but also cater to the interests of the
environmentally aware customers.
 Product diversification – The company may develop new range of products to suit
the demands of the new target market. The observable trends of electric motorcycles
and biking by women can be catered by the company by diversifying their products
according to the needs of such customers.

12MARKETING MANAGEMENT FOR HARLEY DAVIDSON
 Provision of high quality after sales services – The company may aim to improve
the customer satisfaction and build a brand loyalty in Egypt by providing the
customers with free after sales services for a period of the first five years. This will
help in attracting the customers towards the brand and reduce the scope of switching
to substitutes or competitors.
Conclusion
From the above discussion regarding the scope of business expansion by Harley
Davidson in Egypt, it can be deduced that there are several factors in the internal and external
business environment of the company that may help in determining the efficiency and
success of such an expansion. An evaluation of these factors can help in the identification of
the opportunities and threats that may be faced by the company during their business
expansion. The efficient utilization of marketing strategies is also essential as it will help the
company to strengthen and solidify its customer base in Egypt and obtain an optimum level
of customer satisfaction and brand loyalty. The mode of market entry identified to be suitable
for the company is foreign direct investment due to its ability of increasing the opportunities
for the company.

13MARKETING MANAGEMENT FOR HARLEY DAVIDSON
References
Ang, S.H., Benischke, M.H. and Doh, J.P., 2015. The interactions of institutions on foreign
market entry mode. Strategic Management Journal, 36(10), pp.1536-1553.
Burns, A.C., Bush, R.F. and Sinha, N., 2014. Marketing research (Vol. 7). Harlow: Pearson.
Catulli, M., Cook, M. and Potter, S., 2017. Product service systems users and Harley
Davidson riders: The importance of consumer identity in the diffusion of sustainable
consumption solutions. Journal of Industrial Ecology, 21(5), pp.1370-1379.
Coutinho, M.A., de Mesquita, J.M.C. and de Muylder, C.F., 2018. Ultimate loyalty: A case
study of Harley-Davidson clients. Revista Pensamento Contemporâneo em Administração,
12(3), pp.143-154.
Dailynewssegypt.com (2020). Digital transformation to increase Egypt’s competitiveness:
Communications Minister - Daily News Egypt. [online] Daily News Egypt. Available at:
https://wwww.dailynewssegypt.com/2019/10/25/digital-transformation-to-increase-egypts-
competitiveness-communications-minister/ [Accessed 4 Mar. 2020].
Dobbs, M.E., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review.
Donavalli, G., 2016. STP Behind The Rise Of Harley-Davidson.
Egyptindependent.com (2020). World Bank praises Egypt's success in reducing CO2
emissions - Egypt Independent. [online] Egypt Independent. Available at:
https://egyptindependent.com/world-bank-praises-egypts-success-in-reducing-co2-emissions/
[Accessed 4 Mar. 2020].

14MARKETING MANAGEMENT FOR HARLEY DAVIDSON
Harley-davidson.com (2020). About Harley-Davidson | Harley-Davidson UK. [online]
Harley-davidson.com. Available at:
https://www.harley-davidson.com/gb/en/about-us/company.html [Accessed 4 Mar. 2020].
Hg.org (2020). [online] Hg.org. Available at: https://www.hg.org/legal-articles/egyptian-
labor-law-31577 [Accessed 4 Mar. 2020].
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: Theory & cases:
An integrated approach. Cengage Learning.
Hogg, A. (2020). Egypt now Africa's top economy and most investible; SA slips back -
BizNews.com. [online] BizNews.com. Available at:
https://www.biznews.com/africa/2018/09/13/egypt-africa-top-economy-sa [Accessed 4 Mar.
2020].
Huang, C.C., 2017. The impacts of brand experiences on brand loyalty: mediators of brand
love and trust. Management Decision.
Ibrahiem, D.M., 2015. Renewable electricity consumption, foreign direct investment and
economic growth in Egypt: An ARDL approach. Procedia Economics and Finance, 30,
pp.313-323.
Investor.harley-davidson.com (2020). Our Strategy | Harley-Davidson USA. [online] Harley-
Davidson USA. Available at: https://investor.harley-davidson.com/our-company/our-strategy
[Accessed 4 Mar. 2020].
Nadeem, M., 2015. Customer Loyalty At Any Cost: Why Is Social Media Poorly Integrated
With Marketing Strategy?. Available at SSRN 2645884.
Nnadi, M. and Soobaroyen, T., 2015. International financial reporting standards and foreign
direct investment: The case of Africa. Advances in accounting, 31(2), pp.228-238.

15MARKETING MANAGEMENT FOR HARLEY DAVIDSON
Pickett, L., 2018. Green New World. Quality, 57(5), pp.20-25.
Roese, N.J. and Kompella, M., 2017. Harley-davidson: Chasing a new generation of
customers. Kellogg School of Management Cases.
Stoian, C. and Mohr, A., 2016. Outward foreign direct investment from emerging economies:
Escaping home country regulative voids. International Business Review, 25(5), pp.1124-
1135.
Triwastuti, R., 2017. Market Entry Strategy of Multinational Enterprise (MNE): A Case
Study of Harley Davidson. TIJAB (The International Journal of Applied Business), 1(2),
pp.113-123.
Ustr.gov (2020). United States and Egypt Agree to Further Trade Cooperation | United
States Trade Representative. [online] Ustr.gov. Available at: https://ustr.gov/about-us/policy-
offices/press-office/press-releases/2017/december/united-states-and-egypt-agree [Accessed 4
Mar. 2020].
Washingtontimes.com (2020). Harley-Davidson goes green; motorcycle company rolling out
‘LiveWire’. [online] The Washington Times. Available at:
https://www.washingtontimes.com/news/2014/jun/19/harley-davidson-goes-green-
motorcycle-company-roll/ [Accessed 4 Mar. 2020].
Whiting, A. and Deshpande, A., 2014. Social media marketing: A myth or a necessity.
Journal of Applied Business & Economics, 16(5).
Wolburg, J.M., 2014. Lifestyle Brands: A Guide to Aspirational Marketing. Journal of
Consumer Marketing.

16MARKETING MANAGEMENT FOR HARLEY DAVIDSON
Womenofegyptmag.com (2020). Real Women Ride Motorcycles. [online] Women of Egypt
Mag. Available at: https://womenofegyptmag.com/2017/10/04/real-women-ride-motorcycles/
[Accessed 4 Mar. 2020].
Zaharia, V., Muşetescu, A. and Chira, R., 2015. Facing Competition On A Global Market.
Quality-Access to Success, 16.