The Harley Davidson Case Study - Sustainable Comparitive Advantage.

Sustainable Competitive Advantage - Harley Davidson

29 March 2008

1.0 Introduction: Warren Buffet was once asked what is the most important thing he looks for when evaluating a company to invest in. Without hesitation, he replied, "Sustainable competitive advantage." Sustainable Competitive Advantage (SCA) is gained by effectively exploiting the distinctive capabilities and characteristics of a company that cannot be easily replicated by its competitors. This paper will examine the (SCA) that Harley-Davidson (H-D) is seeking to maintain or to gain in certain target markets - specifically in the United States and China, respectively - for motorcycles. Included will be a value chain analysis of two generic forms of competitive advantage – low cost and differentiation - that contribute to H-D’s quest for dominance in those markets. 2.0 Situation Summary: Although motorcycles are sold internationally, 3 main geographic markets comprise the bulk of motorcycle sales: North America, Asia, and Europe. 2.1 North America: The largest market for motorcycles is North America (USA and Canada), accounting for about 60% of worldwide motorcycle sales. According to the company’s Web site (2008), H-D leads the industry in domestic (United States) unit sales of heavyweight motorcycles. Japanese producers - Honda, Yamaha, Kawasaki, and Suzuki - are producing a full line of motorcycles ranging from scooters to heavyweights. Japanese companies' success began with copying other products, but evolved to depend on innovative designs and technology. Harley Davidson is producing heavyweight motorcycles 1

© 2008 Richard E Murphy

Sustainable Competitive Advantage - Harley Davidson

29 March 2008

emphasizing good quality product and after sales service, thereby building up brand loyalty. Honda is the largest company in terms of size, financial backing, and reputation. It is offering the widest selection of styles, classes and sizes within the heavyweight category. Kawasaki's...