Cost leadership and product differentiation harley davidson

Troubled Ride InHarley reported a decline in the demand for its motorcycles due to the global economic downturn.

harley davidson marketing strategy

While most analysts are attributing the decline to a permanent change in consumer preferences, I believe the devil is in the details, and the current weakness presents an attractive buying opportunity.

Regulation — A general increase in regulatory burden and complexity is almost as certain as death and taxes.

Harley davidson differentiation strategy

One is cost leadership which is how to generate economic value by having lower costs than your competitors. The company can use this intensive growth strategy to support the focus generic strategy for competitive advantage. Commenting on the company's decision, Wandell said, "Buell and MV Agusta are great companies, with proud brands, high-quality exciting products, and passionate enthusiasm for the motorcycle business Patents — Probably the first thing that comes to mind when thinking of IP based advantages. The presence of one or both of these factors is the key to the company earning excess returns on capital and creating value. Market Development. Each of these attributes can take various forms, but I believe they are captured in the following categories. These assets are exploited or created via feature films and are monetized via licensing deals and theme parks. While it is possible that the market for large motorcycles is permanently challenged, levels of engagement, average age, and demographic trends suggest otherwise. You can use cost leadership to gain a competitive advantage when your source is valuable, rare, costly to imitate or well organized and implemented appropriately.

Through focused differentiation, Harley wanted to gain a competitive edge and be unique in its industry, experts said.

It concentrated on mini niches such as customized, touring, and standard motorcycles in the heavyweight division. Product innovation is the key point in this intensive strategy.

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You want to develop a strategy to exploit the cost advantage or to compete on some other basis. Another strategy is product differentiation.

Harley davidson pricing strategy

There are even fewe that can claim that their brand name is the one which people are most willing to tattoo on their bodies [3]. Transforming Product Development As part of the focus strategy, Harley transformed its product development process to focus on the needs of riders, deliver relevant products in each global market, improve speed to market, and grow its customer base. Customer Learning — Anyone who has taken the time to integrate a spreadsheet into a Bloomberg knows how difficult it is to wean oneself from a service provider. A less obvious example of captivity that comes from customer learning are dental offices that have been set up by either Patterson or Henry Schein. Product differentiation is where you generate economic value by offering a product or service that customers prefer over other brands. That is why the last major greenfield refinery in the U. The company's business strategy was based on focused differentiation wherein it targeted specific groups with focused products. It concentrated on mini niches such as customized, touring, and standard motorcycles in the heavyweight division. At present, however, this intensive strategy has only a supporting role because the company limits its global expansion. Also, the differentiation generic strategy empowers Harley-Davidson to penetrate current markets. A structure is the division of management responsibilities and the establishment of reporting relationships. The company changed its approach to product development by being leaner, faster, and smarter Asset-based competitive advantage usually leads to lower cost than the competition and is especially relevant in commodity type industries. For example, Harley-Davidson can establish new operations in more countries. Know-How — Any process, whether retail, manufacturing, or distribution, benefits from incremental knowledge acquired through day-to-day operations.

Product Development. I believe that Harley Davidson is a rare combination of quality and value available in the market at a reasonable price. The recession affected the growth of the company as people were reluctant to spend money on luxury items.

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Rareness might come from economies of scale, diseconomies of scale, learning curve economics, differential input access, technology or policy choices.

Suppliers set up offices for dentists and automatically provide them with supplies.

Cost leadership and product differentiation harley davidson

These assets are exploited or created via feature films and are monetized via licensing deals and theme parks. While most analysts are attributing the decline to a permanent change in consumer preferences, I believe the devil is in the details, and the current weakness presents an attractive buying opportunity. The company exclusively focused on the heavyweight motorcycle segment. A great example of product differentiation is Harley-Davidson. The company grows by applying this intensive strategy in entering new markets. What you are looking for? The last category of competitive advantage comes from customer captivity acquired through either brand affinity or learning. I believe that Harley Davidson HOG has an advantage on the cost side owing to its scale, and an advantage on the differentiation side owing to a strong brand affinity for its product.
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On Competitive Advantage