Question

Find a company that is an example of differentiation or focus differentiation.   Explain why this company is an example. Does this company or the conditions meet the criteria for being appropriate for differentiation or focus differentiation? Explain why or why not. Has this company experienced any of the risks or drawbacks of using either differentiation or focus differentiations? Explain. What has been the impact of this strategy on power? Explain this using the Five Forces Model.   Explain the advantages and disadvantages that this company has experienced as a result of following this strategy. Through answering this question, demonstrate your comprehension of and ability to apply the concepts of Generic Strategies and the Five Forces Model.

Answer 1

Current Market segment of Harley Davidson: Young and premium motorcycle segment for male riders

Market segment targeted by the company: Sportster premium motorcycle for female riders

Positioning statement for the company: Heavyweight premium motorbike for riders who like thrill and adventures.

Generic Strategy adopted by Harley Davidson: Focus Differentiation in the premium and heavyweight motorbike segment

Porter’s 5 Forces Analysis of Harley Davidson

• Competitive Rivalry: Strong
  • This force is high as there are various established competitors of Harley Davidson in the market, each with a wide customer base.
• Bargaining Power of Customers: Moderate
  • Harley Davidson is considered a status symbol by the customers. But the customers also have a variety of options to cater to in this segment. Hence the bargaining power of customers can be considered moderate.
• Bargaining power of Suppliers: Weak
  • Forward integration is low in this industry as suppliers have low control over the distribution of their products.
• Threat of Substitutes: Moderate
  • As the customers consider Harley Davidson a status symbol, the probability of it getting substituted is quite low among those who can afford it. The number of options in this segment is quite huge, making the threat of substitution a moderate force.
• Threat of new entrants: Weak
  • There is moderate economies of scale in this segment. Also each established company in the 2-wheeler premium segment has a dedicated customer base. Also the market entry barriers are quite high. So the threat of new entrants is a weak force

Critical Competitive Forces which may threaten the business of Harley Davidson:

• Government grants and regulations offered in this segment: If Government gives good grants and lowers the market entry barrier, new companies will try to acquire the market space of Harley.
• Purchasing power of the consumers: If the economy and GDP lowers the buying capacity of consumers, sales of premium and luxury products will get adversely impacted.
• Availability of product parts: If the parts of the motor cycle are not readily available, then the consumers may show hesitance in buying the product.
• Quality of after sales service as well as maintenance cost: If the maintenance cost of Harley Davidson is high, consumers may show hesitance in buying the product.

Recommendations to Harley Davidson:

• Capitalize on free trade agreements facilitated by government and enter new markets
• Use the platform of e-commerce to sell merchandize of the company. This will help in establishing better connect with consumers
• The economic stability in major markets of the company gives an opportunity to the company to launch new products or do facelifts in the existing product. The standard of living and buying capacity of consumers will favor this decision.
• The offerings of the company must be decided keeping the credit accessibility in mind
• Introduce products keeping the female consumers in mind
• Products must be made eco-friendly as there is a shift of consumer base towards ecological sustainability
• Capitalize on R&D funds and keep innovating new features
• The company needs to keep a track of the climate change so as its business does not get hampered due to the volatility