Harley-Davidson: Growth Challenges Ahead

1. Harley-Davidson is known for its strong brand name and loyal following and yet by 1980 Harley was on the verge of bankruptcy. Why was Harley in deep trouble even with such a strong brand name?

2. After almost going bankrupt during the invasion of Japanese motorcycle manufacturers (Honda, Yamaha, Kawasaki) into the U.S. market, Harley-Davidson has re-emerged as a highly successful, and profitable, motorcycle manufacturer. What have been the keys to Harley’s success?

3. What key “job” or “jobs” are Harley customers buying a Harley-Davidson motorcycle to do for them? (In other words, Harley is typically hired to do what job for customers?). In what ways does Harley-Davidson attempt to differentiate its products relative to Honda, Yamaha, and BMW?

4. Looking into the future, what threats does Harley face (from rivals such as Honda and BMW)? What opportunities does it have? How might Harley modify its strategy to respond to its opportunities and threats?

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• This case gives an opportunity to examine a company’s sources of differentiation advantage. It also demonstrates that differentiators cannot completely ignore costs without experiencing serious consequences.• This case also illustrates how competitors can start at the low end of the market and then move upmarket (as Honda did with both motorcycles and cars). It also illustrates how difficult it can be to replicate sources of differentiation in new markets (geographic and demographic) when those sources are largely emotional (country-specific) and not functional (e.g., Harley has had a difficult time replicating its differentiation advantage with women and in international markets).