Case Study by: Jen Phillips
The nature of the international business that Harley is currently facing could be considered a necessity for both growth and sustainability of the company. With a small target market in the US of the upper-middle class and older customer, Harley realizes it must further grow and begin to compete on a higher level with its competition; on a global level. While Harley already has business internationally, the risks of strong globalization of any company are strong. Risks are put into four different categories: Country, Currency, Commercial and Cultural. Country risks pertain to the economics of the country they plan to sell in, including economic stability, trade tariffs, and regulations just to name a few. The currency risks are due to exposure; however, if Harley makes the move to locally produce in each country, these risks will be widely mitigated by dealing only with local currency. Cultural risks include the lifestyle of their future target market such as decision making styles and many of these can be avoided by gathering much information about your market and selling to their needs. Lastly, the commercial aspect seems to have the most unknowns and thus can appear to be the biggest risk, largely depending on execution, competitors; for example, globalization will mean a larger product mix and regional sales to observe as well as new and experienced competition.
Harley can benefit from expanding abroad with directly related results of increased sales and revenue. This will allow the company to grow and continue global expansion. Additionally, globalization lends itself to streamlined marketing campaigns, R&D and greater technology advances, which will help Harley’s performance in North America.
In order for Harley to effectively compete with their rivals in Europe and Japan, they must have a good understanding of all the risks they will encounter as stated above in answer #1. Harley must mitigate every risk possible to avoid a negative investment. Strategies to grow the firm’s sales in those regions could include setting targets to gain market share resulting in lost business for their competitors. Reducing their competitors’ market share will ultimately weaken the growth of that competitor, which will filter down through their value chain lowering budgets such as marketing and R&D. Another strategy which is a bit more risky is to focus on creating a new target market of motorcycle buyers, however, this will not affect their competition too much and may lead to negative investments.
Since these are competitors only beginning to emerge, Harley can use its vast history and experience to its advantage and compete with the local China manufactures by globalizing their manufacturing. Advantages of globalizing their…