Harley-Davidson India Harvard Case Solution & Analysis


            Harley-Davidson which is normally abbreviated as H-D or Harley, is the manufacturer of American motorcycles. The company was founded in Milwaukee, Wisconsin, in 1903 by Bill Harley and Arthur, Water and William.The CEO of Harley-Davidson is Keith Wandell and the president of the company is Levatich. The revenue earned by Harley-Davidson Inc. the parent company of Harley-Davidson is estimated to be around $624 million in 2012 out of $5581 million. 89% of the revenue was earned by Harley-Davidson Motor Company and 11% of the revenue was earned by Harley-Davidson Financial Services.

The function of Harley-Davidson Financial services is dealing with the dealers and providing finance to them, and to spread in the regions like US, Canada and Europe.The line of the US motorcycle consisted of five different basic models coming in several versions and having price between $8000 and $37000. The main theme of the motorcycles manufactured in US by Harley-Davidson is having the aim of motorcycle for leisure time, riding for the local cruising or for the long-distance touring rather than riding for the public transport, racing or off-road biking. Parts & Accessories and General Merchandise contribute around $1 billion in the global sales and also play an important role in giving support to the brand.

The owners of Harley-Davidson mostly comprise of males, whereas, the brand is associated with the strong masculine image. The motorcycles of Harley-Davidson are commonly ridden by the motorcycle clubs which are normally not the main target of the company. Harley-Davidson is also operating in the international markets such as Europe, North America and Japan. Furthermore, Europe accounted for 14.8%, Canada 4.2% and Japan 4.3% of the total revenues earned by Harley in 2012 globally.

Is it a good idea for Harley-Davidson to develop a bike specifically for the India market?

            Harley-Davidson has a great brand recognition in India and its masculine motorcycles are very popular in India. Though the launch of the Harley motorcycles is a good approach, but it is facing many challenges. For instance, the condition of India is not very ideal for the Harley-Davidson’s masculine, air-cooled bikes. In India the traffic speed is very limited, the temperature is quite high than the regions like Europe and North America.

Moreover, the road quality is also a constraint for heavier bikes. Though only Haley-Davidson is targeting the 500cc-1000cc range, which is normally not being targeted by the bike companies operating in India and gives an edge to Harley, but still Harley is not able to fully capture the market as there are low-cost bikes available in the market of India which is proving to be a competition for the company. Therefore, it is a very good idea for Harley-Davidson to develop a bike that is specifically developed for the Indian market. The reason behind developing the mid-sized bikes in India and launching it in India can open gate of huge success for Harley-Davidson in the Indian market.

 The main idea behind the Harley-Davidson motorcycles is that it is a leisure and non-transport bike. Therefore, if the company launches its mid-size bike, then it can achieve success and gain a sizable segment in the growing segment of non-transport of India’s motorcycle market. As the Harley mid-size bikes will be lower in cost and lighter in weight, the new bike will also attract the middle class of India and as it will be light in weight it can be easy to handle and inexperienced bikers can also easily ride the bike. Moreover, the new bike will be lower in the engine power, therefore, it will also be fuel efficient as the fuel prices are rising globally.

Harley-Davidson is already having great recognition in India and if it starts developing mid-size bikes then it can increase its sales and gain a huge market share in Indian motorcycle market. Though the competition is very high in the Indian motorcycle market and many companies like Yamaha, Ducati, BMW, Hero-Honda, Suzuki and Bajaj are manufacturing non-transport bikes in India and thus, has gained a huge share of sales. Competing with these companies with a new bike will be very tough for Harley-Davidson, but its strength is the brand recognition and popularity of Harley-Davidson all over India....................................

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The case examines the decision Harley-Davidson, to enter the Indian market. Due to the rapidly growing economies of India and its swelling base of high net worth customers, many companies have a luxury product in line to enter India. The case lists the factors that such firms should consider when choosing new markets to enter. Also discusses various post-marketing issues facing Harley-Davidson in India after its entry and resolution company can implement to address these issues.The event provides an opportunity for students to understand the dynamics involved in the selection of new markets for the company to maximize its profit by expanding its business . "Hide
by Kumar V Jagadeesh, Sanjeev Prashar, Haridoss Lokesh Source: Richard Ivey School of Business Foundation 12 pages. Publication Date: November 20, 2012. Prod. #: W12318-PDF-ENG

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