Case Presentation: Harley Davidson Inc July 2009Harley Davidson Inc July 2009

Despite Harley’s insistence that it was supplying a unique Harley experience rather than competing with other motorcycle manufacturers …

The more it took market share and expanded product range and geographical scope,

the more it came into direct competition with other producers.

Imitation: V-twin CruisersImitation: V-twin Cruisers

- Closely style- Lower prices- More advanced

technologies

Imitation also included several domestic companies producing retro-styled cruiser bikes: Excelsior, Polaris (Victory) and resuscitated Indian.

Imitation: V-twin CruisersImitation: V-twin Cruisers

Harley lacked the diversification of its rivals …

-Technology, engineering capabilities - Marketing-Distribution know-how - Bargaining power with suppliers

Cruiser Motorcycles, 2009 modelsCruiser Motorcycles, 2009 models

Fury Stateline

Interstate Shadow Spirit 750

Rebel XR650L

Honda Cruisers 2014 - USAHonda Cruisers 2014 - USA

Price comparison of V-twin, cruiser motorcycles, 2009.

Source: Web sites of different motorcycles manufacturers.

Solving short-term problems: Cost reduction and production cutbacks.

CEO Keith Wandell

As a result Harley’s share of the U.S. heavyweight market

had jumped from 50% to 58% in year 2009.

First Half of 2012 in Review: V-Twin Motorcycle Industry Data

Harley’s core customers are graying baby boomers.

- The average age of rider is 49 (up from 42 five years ago).- Harley keep focus on its aging customers.

The longer term threats were more troubling … Harley’s future market positioning.

Ninja EX500Suzuki GS500

Younger crowd => Sport bikesGrowth in the last five years50%

Make smaller, more affordable bikes.

Ninja EX500Suzuki GS500

Younger crowd => Sport bikesGrowth in the last five years50%

Harley “Today” Davidson

Harley “Today” Davidson