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ZAHID KARIM KHAN

0536KRKR0609

ANANAD WALSOR

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Table of contents

1.0 INTRODUCTION..4

2.0 JOURNEY BEGINS..4

3.0 ROAD GETS BUMPY. (1959-1980)..5

4.0 GEAR UP AND CHANGE THE ROUTE..6

4.1 PRODUCTION..6

4.2 ORGANIZATION LEARNING7

4.3 BROADINING THE HORIZION..8

5.0 CONCLUSION.9

6.0 PRODUCTS OFFERD BY HONDA AND HARLEY AND DAVIDSON..9

7.0 PRODUCTION STRATEGIES:10

8.0 MARKETING STRATEGIES10

9.0 REFRENCES13

10.0 BIBLIOBRAPHY..14

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1.0 INTRODUCTION.

Harleyand Davidson (H-D) isnot just motorbike manufacturingcompanyitsan Americanicon

andsymbolizesindustrial mightthat America wasandremains. Sincethetimeofitsinception

1903, withinthespanof 15 yearsitbecame worldslargest motorcyclecompanyby producing

28000 unitsinsingleyear(1918). H-D anditshistoryreflectthechangeandevolutionthat

businesseshavegonethroughoverthelastcentury. It presentsthebranding paradox whereH-D

anepitomeofbrand powerandenjoyed fortunesduetoitbuthow thatsame powerhadlimited

them tocertain marketsegment. Italsosignifieshow important managerialapproachand

practiceshavebecomeovertheyearsandhow these practicescaneithermakeabusiness

successfulora failure.

Changeisinevitableespeciallyinabusinessenvironmentitsrathersoonerthanlater. Only

differenceinchangeis whetheritsinvoluntaryorvoluntary. Formerusually meansitsa forced

one underunpleasantconditionsandlaterusuallyreflectsadesiretoevolve. InthisreportH-Ds

longhistory, changesthatitsufferedandchangesthatitembraced willbecritically

examined.Sincechangeisnotasingleincidentitscontinuousinnatureandtobetterunderstand

how H-Dschange processitsimportanttoknow whyitchangedand from whatitchanged

from. H-D hashistoryofoveracentury. This period willbedividedintothreeeras, eachera

willbebasedonsomedefiningchangethatH-D wasgoingthrough.

2.0 JOURNEY BEGINS.

H-Ds journey, quietappropriately, began from smallgaragein 1913. Havingbuilt 50

motorcycles, company formally field forincorporation. Whattransformedasmallgarageto

companyand acompanyto worldslargest motorcycle manufactures wasinnovation. H-D is

credited forpioneering V-twinengine, internalexpandingbrakeandtreespeedtransmission.Theydidntstop atthatandkeptexperimenting withtwinengineandinvestedgreatdealon

researchanddevelopment. Theseefforts paidoffasthey wereabletobuildnew four

cylindersimprovedthereliabilityandoverall product quality. Withsuchinnovationseveninthe

absenceofinnovation, this periodinH-Dshistoryiscompletesuccessstory.

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From marketing perspective, sincethenatureofthedesignofH-D bike wasthatitgavevery

masculineandaggressiveappearance, itbecamevery popularamongrebelliousstars, highway

patrol, Hells Angelsetc. H-D bankedonthatimageand focused marketingaround machoand

roughimage. Eitherit was marketing, productorboth, H-D bikesgainedthestatusofnational

iconandbrandroyalty which was unprecedent, unmatchedandstillexistsevennow.

Thoughgolden periodinH-Dshistory wherein mid50stheyhad 60% of marketshare, from

strategically pointofview itcanbearguedthat productdevelopmentand marketingstrategies

focusedtoo muchononetypeofcustomersanddidntconsideragreatnumberof untouched

marketthatreadilyexisted. There wasahugesegmentof marketinshapeof womenandolder

menor justsimply men whorequiredadifferent, more passivekindtwo wheeled meansof

transport. But forsomereasonattention wasnot paidtothissegment. Thoughatthattimedidnt

appeartobeofanysignificancebutinalongrunithadilleffectonH-D in future. There were

hintsofchangearoundH-D thatthey failedto pickon. Thisalsosignifiesthe pointthat

organizationsthatdontinitiatechangeare forcedtochange.

3.0 ROAD GETS BUMPY. (1959-1980)

Thiserais marked withtrialsand managerialincompetences. For firsttimeH-D hadareal

competitorHonda. Assoonastoughcompetitionemergedthingsstartedto fallapartand

weaknessesinH-D startedtobecomeevident. ItappearedasthoughH-D neverconsideredthe

possibilityofarealcompetitionorsimplydidntknow how toreact whenonearrived. Even

though European models werebeingimportedbuttheyneverposedanyactualthreatto market

share. WithHondait wastotallydifferentstory;Hondaimmediatelytookholdof untapped

marketandestablisheda marketsharethatstartedtointimidateH-D. H-D startedtolose market

share, it wasdamagingandeven moreso whenconsiderthe factthatthedemand formotorcycle

increasedinlate 60sandearly 70sand 85% of motorcyclessold were manufacturedby

Japanese manufacturers.

Thereasonbehindsucharadicaltwistin marketshareacquisition wassimplythe factthatH-D

wasnotasskilledasits Japanesecompetitors whohadsophisticated mass productionand

redesignsystem whichconstantlycountered marketthreats. Asaresult moreand more Japanese

models whereintroduced whereasH-D hadsimplynoanswertosuchachallenge. Asstated, H-

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D hadverystrong fan followingandsinceH-D brand wasconsiderednationalicon Americans

wouldhave preferredtobuyan American productandsales figuredoes provethattheoryas well

butthe factofthe matterwasthere wasnothing muchthatH-D hadtooffer. Situation

deterioratedso muchthat forthe firsttimeH-D hadtogo publicandthatdidnthelp eitherinthe

end AMF anindustrialconglomeratetookover.

AMF recognizedstaggeringdemandin motorcycleanddecidedtocapitalizeonthisopportunity.

H-D wasallowedto manufactureon massscale. Againatthis point managerialincompetences

surfacedagain. H-D wasnot proficientin mass productiontobegin withontop ofthattheyhired

unskilled workersto meetthe workload. Sincethe focus was quantitynot quality, quality

sufferedagreatdealsodidH-Dsreputation. Managerialincompetencyhitanew low when

managers, insteadofidentifyingthe problem anderadicatingit, decidedtoaddnew featuresto

distractcustomers from obvious mechanical flawsandattractnew customers.

Ascompany wastakenoverby AMF, AMF designated marketingstrategytoanadvertising

consultantagency. When making marketingdecisionsagency wasnotabletoappreciatethe

relationbetweenH-D anditsloyalcustomers. Advertising wasdoneina mannerwhereits

effectiveness foracquiringnew customerscannotbe judgedassuccessbutonething was for

sure;theyalienatingloyalcustomers.

Lookingatthiseraonethingisself-evidentthat managerialincompetenciesledH-D tosucha

direstate. Notbeingabletoadoptorreacttochangeleadseven profit makingcompaniesto point

wheretheycanhardlysurvive.

4.0 GEAR UP AND CHANGE THE ROUTE.

AMF triedand failedandstartedtolookout forbuyer. H-D managersboughtcompanybackfrom

AMF, firsttoughandgooddecision madeinyears. AftergettingcompanybackH-D managers

seriouslystartedlooking forproblems. They wenttoHondas Ohio plantto understandthedifferencethat makesthem sosuccessful. Whattheyrealized wasthattheylackso muchin

approachandskill whenitcomesto manufacturing. Hondahadgoteverythingright from

assemblylines, inventory, qualitycontrol, reliabilityandefficiency. H-D managersopenly

admittedthatdifferencebetweenthem isthat Japanesearebettermanagers. Thisstatementalone

indicatedtheseriousnessanddesireofH-D management. H-D managementdecidedtochangein

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almosteveryaspectoftheirbusiness. Sohow did managersbroughtchangetoH-D whateffects

didithad?

4.1 PRODUCTION.

AftervisitingHonda managementstrongly feltthattheircurrent manufacturingsystem, even

though moreexpensive, cannotcompete with Japanesesystem. Inspiredby Japanese

manufacturingapproachand practices, H-D came up with productivitytrial whichconsistedof

followingapproaches;

y Employeeempowerment. H-D realizedthatgiving workersresponsibility forquantityratherqualityleadsto qualityissues. Giving workersresponsibilityissimplynotenough

empoweringthem andinvolvingthem indecision making processhelpsinimproving

quality. Byteachingemployeesthereason qualityissuesdevelop andhow theycanbe

traced forcesemployeestodeal withthe problem. Alltheseincentives provedtobevery

efficientandimprovedthe qualityalot.

y Inventoryand JIT. VisitingHonda plantalso made flawsinH-D productionsystemobvious. Poorproduction practices werethereasonthat 50% ofH-D motorcycles fail

qualityinspection. H-D decidedtoreducetheirinventorylevelsthis made problems

veryobvious. Theyalsointroduced MAN (materialasneeded) thiscreatedahuge

differenceasH-D wasabletoturntheirinventory 17 timescomparedto 2 timesayear

priortointroductionofthis programme.

4.2 ORGANIZATION LEARNING.

H-D realizationthat propertrainingisverynecessary;theysimplycannothave unskilled workers

attheirassemblyline, itdidntstop atthat. H-D startedtraining programmesatalllevels. They

gotridof positionsthat werenotaddingvalueto product. H-D became moreteam orientedand

flatorganizationitnotonly madethem efficientbutalsosavedthenalotoftimeindecisionmakingandresponse process. Throughtrainingemployees were madeawareoftheoperations

they wereinvolvedinandalsodirectionthatcompanyis movingtowardsandintendto move

towards.

4.3 BROADINING THE HORIZION.

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H-D realizedthattheirniche marketisnotenoughto full filltheirambitions. Theydecidedto

exploreothermarketsegments. SinceH-D didntoffersportsbikeitbought Buell, a performance

motorcyclecompany. H-D designedarangeof motorcycles withH-Dsengine mountedon

modified frame. H-D wasnow targetinga market withtaste fordifferent product. VRseries was

placedtocompeteagainst Ducati, BMW andotherEuropean models.

4.4 MARKETING STRATEGIES.

Asotheroperationsofbusiness wereremodelled. H-D alsorevisedits marketingstrategy. First

thingtheydid waseliminate positionof marketing presidentasitdidnthaveanyeffectinadding

value. H-dthanadoptedaslightlydifferentapproachtowards marketing. SinceH-D has

unmatchedbrand powerandcustomerloyaltyis unprecedent. Theystartedinvestingingroups

likeHarley & Davidson Group (HOG) and LadiesofHarley. Thesegroupsdid more forH-D

thananycommercialsoradvertisingagencies wouldeverhavehopedtoachieve. H-D alsoheld

eventslikeevent fornational women media, event forethnic African AmericanandHispanic

community. ThroughtheseactivitiesH-D triedtoexpandtheircustomersdemographics. One

the mostinterestingandsuccessful programmeinthisregard wasH-D ridersandrental

programme. Placedin 50 countries with 250 dealers, objective wastoincreasesalesandH-D

believesthey wereabletodothat. The figureshowsthat 32% oftheirusersboughtabikeor

placedonorderand 37% plannedtobuyone. Whereasridersedge programmeoffered motor

cycleridinglessons

5.0 CONCLUSION.

EventhoughittookalotoftimebutH-D transformeditselftoanorganizationthatcancompete

in modernbusinessenvironment. Thiscasesignifiestheimportanceofchangeaccordingto

change. Businessshouldbeonestep aheadofnotonlytheircompetitorsbutcustomers. Knowingwhatcustomers wantevenbeforecustomersknow whatthey wantensuresyou controlof market.

Proficient managementenablescompanyto full fillits missionsandobjectives. H-D caseisa

primeexampleof factthatevenifcompanyhascompleteholdof marketiftheydonthave

managerialskillsthatcancompeteagainstanefficientcompetitionentry, theycanlosethathold

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within moments. Thereisalwaysroom forimprovementandthereisalwaysbetterwaytodo

things, thisapproachasa managerleadsto findingout

ComparisonandcontrastofHarley-Davidson withHonda

Harley-Davidsonis most famousbike manufacturerbasedin America. Company faces many up

anddownbutstillsustainedasecurestateandbecomeoneofthe marketleadersinheavy

weightedbikeindustry. Harleysaredealing with manyheavy weightedbikes whichare

speciallydesigned forcruising. OntheotherhandHonda Japanese manufacturerhas widest

rangeof products. Hondas productsareattractingcustomersbecauseofaffordabilityand

durability. Hondasbasicvarietyof productsareoffertothosegroup of people whoarelooking

forconvenientaroundtheirworkplacesandaffordability, thesearethe main factorsofferedby

Hondaintheirdesign. BesidethisHondaalso producedsomecomplex products forthose who

wantspeedand power, furthersomeexpensive, highspeedandhighstyle products forthose who

havelessconcernaboutcostof product.

Harleyand DavidsonandHondathoughdealinthesamebusinessbuttypeof producttheyoffer

andthe waytheyrunbusinessis worldapart. ThoughHarleyand Davidsonhavetakenlikingto

Japanesestyleof managementand manufacturingstilltherearesomeveryidenticaldifferences.

InordertocompareandcontrastbetweenH-D andHonda, someaspectsofbusiness willbe used

todothecomparison.

6.0 PRODUCTS OFFERD BY HONDA AND HARLEY AND DAVIDSON.

Harley-DavidsonhasiconicH-D heavy motorcycles models. Theenginerangesare 750cc,

1500cc 1800ccand 1800cc. H-D alsohavesportyrangeof VRseries whichhasliquidcooled

engine. Italsohassposterfamilyrange.

Hondaontheotherhandcancome up witha modelatthedrop ofahat. Hondahas motorcycles

foralmosteveryone from everywhere. Honda unlikeHarleyand Davidsonasacompanyisnot

associated withonetypeof productormodel. Hondasapproachtowardstheirproductsisvery

customeroriented. Ifacustomerneedscertaintypeof motorcycleHonda will makeit. Honda

build motorcycles from enginerangeofa modest 49ccto monstrous 1800cc. SinceHondahas

sucha widerangeof productsitalsoenjoys widerangeofcustomers. WhereasasHarleyand

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Davidsonhaveveryspecificclientele. Productsdefine marketandrangeof product mostly, ifnot

allthetime, definesshareinthat market. Takingalargechunkofshare from anotherbusinessis

noteasyandHonda waseasilyabletodothattoHarleyand Davidson, thisduetoamongother

factors wasbecauseof productrangeHondahadtooffer.

7.0 PRODUCTION STRATEGIES:

Harleyand Davidsonsincehadahuge markettosupplytheirproducttoandnorealcompetition

in early years. They didnt develop that discipline in their production that allows lean, and

quality manufacturing. As quantity has always been requirement quality usually suffered.

ThoughaftertwoterribledecadesHarleyand Davidson learnttheir lessonand madeamends in

their manufacturing practices. Infect, the main source of inspirations was their rivalsHonda.

Honda and other Japanese companies havebeen proverbial when it comes togood managing

practices. ForthetwodecadeHarleyand Davidsonhavebeenbeatenontheirhomegrounddue

tothedifference in managerialskills. Hondadoesnotonly manufacture motorcyclestheyalso

manufacture wide rangeof four wheel vehiclesandarevery proficient in it. Theyhave more

experienceasanorganizationandtheirdiverseoperationalexperiencegivesthem anedge when

itcomestothe understandingof manufacturingoperations.

8.0 MARKETING STRATEGIES

Harleyand Davidsonhavealwaystriedtodifferentiatethemselves from othersandin factthey

are. Harleyand Davidsonhaveverydifferentstyleof marketing. Theydefinethemselvesas

group, acommunity, aclub whichiskindofexclusiveandtheygoonabouttheirmarketingina

same manner. Harleyand DavidsonhavegroupssuchasHOG andladiesofHarley & Davidson.

Andtheyalsohold mediaeventsto promotethebrand. Theydo useconventional meansof

advertisingbut whenyou aresellingbrandsits morelike promotingacommunityyou notdontfocuson productotherthingsandactivitiesthatonesgetstobe partofiftheyembracedthis

brand. Like manyothersHarleyand Davidsonhavestarted usinginternetandsocial websites

like Facebookreallysuitstheircommunitybasedcustomersinteraction platform.

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HondaontheotherhandHondahasveryorthodoxapproach. They will wanttoapproachas

muchoftarget market, forthatspecific product, as possible. They willalso useadvertisingas

countertool fortheircompetition. Forexample whenHondaentered Americathere wasonlyone

majormotorcycle manufactureHarleyand Davidsonandtheyhadthisroughimage fortheir

marketingstrategy. So whatdidHondadidit made You meetnicest peopleonHonda This

positivestatementhadallthenegativeintention forHarley & Davidson. Hondatakeseach

marketasitisandtriesto finda waytoappealtocustomersthroughsome uniqueor

extraordinaryaspect. Itcanbeanythingasdemonstratedinaboveexample.

9.0 COMPARING THE BOTH.

HondaandHarley-Davidsonareboth motorcycle manufacturesbotharecompetitorsespecially

instate. Bothcannotbecompareddirectlyinsensethattheyeachhavedifferenttarget marketsa

same productbuttheyappealtotwodifferentaudiences. Thebest waytocomparethem willbe

throughswotanalysis. It willgiveanexactideaofindividualstrengthand weakness, individual

threatsandopportunities.

STRENGTHS (HARLEY AND DAVIDSON)

y Innovation:Harleyand Davidson where pioneerof V twinenginesindependentrearbrakesandthreespeedtransmission. Traditionofinnovation waslostovertheyearor

Mayit wasnotas prioritize. Buttheygotbacktothetraditionandafter60 yearscame

withv-rodandv-streetseries whichareaccordingtoHarleyand Davidson provingtobe

a quietsuccess.

Hondahastakenonestep futureininnovationandventuredintorobotics. Itsimportant

torememberthatHondanotonly manufactures motorcyclesdothespectrum of R&D and

technologyatthedisposalofHondaisbeyondany motorcycle manufacturingcompany.

y Strongbrandequity:Harleyand Davidsonisthebrand which perhapsenjoys moststrongbrandaffectionbyits fans, followersandcustomers. Onecan form ideahow strongitis

by mere factthatHarleyand Davidsonbrandequatesto Americanemblem. Duringits

worstyearsonlythingthat wasthecauseofsurvivalofHarleyand Davidson wasits

brand power. Peoplein America wanttobuy American motorcycle moreoverthey want

tobuyHarleyand Davidson.

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Hondais worldrenownedcompanythebrand powerofHondaisnotlimitedtoacountry

orregion. Hondohas wontheheartsand mindsof peoplearoundglobethroughits

productthathave please peopleofeverystatus.

y Strong Financial Position: OvertheyearsHarleyand Davidsonhasseenthroughalltheirfinancialtroublesandnow enjoyverystable financial position. Strong financial position

allowscompanieslikethesetoinvest moreinto R&D toimprovetheirproductsandcome

up withnew ones. Thisinreturnbringshuge profittocompanies.

Hondaisonethelargestorganizationin worldits financialstrengthcanonlybe matched

by few. Andsincetheyhavesuchahuge financeattheirdisposaltheycancarryon with

innovationsthroughextensive R&D.

y Pricing:Harleyhas fairprice forsomeoftheirproductsbut manly pricingisnotthebestofHarleysand Davidsonsstrengths.

OnethereasonHondaissolovedallaroundthe worldisbecausethey producehigh

quality productataveryreasonable price.

y Product:Harleyand Davidsonbikehassuchahuge followingnot fornoreasons. Producthas mesmerized people forages. Itsa phenomenon whichhad passedon from generation

togeneration. EventhoughitsclassifiedasaheavybikebutHarleyand Davidsoncannot

becomparedtoanyothermakeormodelsinceitsaclassofitson.

Hondais worldrenowned forits qualityof products. Theydontcompromiseon qualityand follow verysophisticatedandefficient productionsystems.

y Marketing. Harleyand Davidsonhasonethe most unusualandeffective marketingstrategies. Theyhaveeventsandgroupsthatdo morethan Advertisement Companycan

everachieveandinlessthananyadvertisementcompany willeveraccept. Whatare

keepingtheirbrandstrongaretheseadvertisementactivities.

Honda usesconventional meansofadvertisementsincetheirbranddoesneedtoo much

brand promotionsoits productthatgetstheentirespotlight.

OPPURTUNITIES.

y Expansion: Asexperimentin Europe provedtorelativesuccessandthereis minorcult followinginotherpartsof world. Harleyand Davidsonshouldcapitalizeonthis

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window andtrytodothesametheyaredoinginstates ,interms marketingand

increasetheircommunity.

Hondaisalwaysexpanding.

y Productandserviceexpansion:Harleyand Davidsoncanexpandtheirproductrangeandgive morechoicesintermsof pricing, poweranddesignofbikes. Servicesshould

alsobeat parwith product.

Hondaserviceand productisalwaysimproving.

y Expandingdemographics: EventhoughHarleyand Davidsonsspecificclientsandfanshavebeenthesourceofimageoforganization. Harleyand Davidsoncanexpand

theirclienteletogain moresponsorshare.

Hondaisalwayslookingto penetratenew marketsandregions.

WEAKNESS.

y Not Diversified. Havinglimited marketdominationandattributed forspecifickindofclientelecanlimitcompanybusiness.

y Limted product:Harleydoesntofferrangeof products. Itdoesnt presentanyoptiopnstoitsbuyersintermsofengine power, designcostetc.

THREATS.

y Competition. CompetitioninshapeofHondaoncealmostcausecompleteannihilationofHarleyand Davidson. Competition willalwaysbethreattoHarleyand Davidson. Sinceit

haslimited marketshareandeverynew entry means more possibilityof marketshare

beinglost

y External Changes. Externalchangesarealways unpredictableandcauseradicalchangesinbusinessenvironment whichcancause unstability.

y Substitution. Thoughdoesntseem possibilitysincethebrandisso powerful. Butnevethanlesssubstituteisalwaysathreat.

9.0 REFRENCES:

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y Gridler, A. & Hackett, J. (2004).Harley and Davidson Motorcycle.y http://www.automobilemag.com/features/news/0909_harley_davidson_vs_honda_great_r

ivalries/index.html

y http://www.brainmass.com/homework-help/business/marketing/217639y http://www.wikiswot.com/SWOT/4_User_Generated/Harley_Davidson.htmly http://www.bloggingstocks.com/2007/06/25/honda-buyout-of-harley-davidson-does-it-

pass-the-sniff-test/

10.0 BIBLIOGRAPHY

y http://www.gaijinriders.com/showthread.php?5533-Harley-Davidson-American-Honda-Motor-Company-Merger-%96-Honda-Davidson-Motor-Company

y http://www.customharleyparts.com/a303925-william-harley-arthur-davidson-soichiro.cfm

y http://www.lotsofessays.com/viewpaper/1706349.html