Question

Harley-Davidson has chosen to compete in various country markets in Europe and Asia using an export strategy. Go to the Investor Relations section at www.harley-davidson.com and read the sections of its latest annual report related to its international operations. Conduct additional outside research on the topic. Harley-Davidson Why does it seem that the company has avoided developing production facilities outside the United States? Which strategic option from your reading for entering foreign markets has HD adopted? Why do you think they have adopted this strategy?

Answer 1

Harley Davidson is an American motorcycle manufacturer that exports to over 97 countries through dealerships(Rifkin, 1997). Although the company now has an assembling plant in Brazil, and a manufacturing plant in India and Australia, its international market strategy has dominantly been an export strategy because the majority of the Company's motorcycles are manufactured at facilities located in the U.S. An export strategy to an international market is one which uses domestic plants to produce the product and exports to foreign markets.

Harley Davidson has avoided developing production facilities' outside the USA for several reasons. First, US firms develop production facilities outside the US for reducing costs. (Van &Kleiner, 2000). They seek locations that have low cost resources like raw materials and labor and so develop products that have a low cost so that the price of the product is competitive. However, Harley Davidson has not attempted seriously to reduce costs. It continues to be positioned as a high end product. So, Harley Davidson has avoided setting up operations abroad. Second, even though Harley Davidson has faced declining US sales, it has been able to improve its revenues by selling its bikes abroad(Van &Kleiner, 2000). It has opened market after market for exporting its bikes and its sales