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Harley Davidson in

India
Presented to : Dr Diwakar Kamath
By
Govind Krishnan K A
Mayank Kumar
Sahib Lamba
Ashar A Latheef
Hari Manwani
Aashna Manaktala
Kshitij Mundhada
Omkar Maraballi
Prateek Nanda
Introduction

Harley-Davidson often abbreviated H-D or Harley is an American motorcycle manufacturer.


Founded in Milwaukee,Wisconsin, during the first decade of the 20thcentury.

The company sells heavyweight(over 750 cc) cruiser motorcycles in the luxury motorcycle
segment.

It is a symbol of rugged individualism, freedom and rebellion.

Entered the Indian market in 2009.

it was not simple for creating a segment in India(especially in this sovereign, socialist,
secular, democratic republic called India).

Be it Cola or Cornflakes, cars or mutual funds India has not been an easy market for global
majors to crack but Harley has defined that trend.
Vision:

Harley-Davidson, Inc. is an action-oriented, international company, a leader in its commitment to continuously


improve our mutually beneficial relationships with stakeholders (customers, suppliers, employees, shareholders,
government, and society). Harley-Davidson believes the key to success is to balance stakeholders interests
through the empowerment of all employees to focus on value-added activities.

Components :

1. Action-oriented business

2. International scope

3. Leadership in stakeholder management

4. Employee empowerment

5. Value-added activities

Mission:

We fulfill dreams through the experiences of motorcycling, by providing to motorcyclists and to the general
public an expanding line of motorcycles and branded products and services in selected market segments.

Components :

1. Fulfilling dreams through motorcycling

2. An expanding line of products and services

3. Selected market segments


Harley Davidson in India

We are not a motorcycle company. We are a culture on two wheels. And we want to convert dreams of owning a
Harley into a reality for Indian motorcyclists.

When the Govt of USA & India decided to trade H-D for Alphonso mangoes in 2009 they were probably
presenting a huge challenge to the cult-driven company.

India was the largest motor-cycle market in the world with 10.5 Mn bikes sold in 2010but barring the few
imported superbikes the premium bike segment was practically non- existent in India

Harley started with a big-bang by launching 10 Models to begin with rather than being stingy or bringing just 1 or
2 models.

It invested in a completely knocked down facility(CKD) in 2011 that began with the assembly of its sportster line
followed by the Dyna line in 2012 & Softail in 2013

The more important programme by H-D was its dedicated dealership programme which started off with having
the right people at right place
Harley Davidson in India
Harley Owners Group (HOG)- initially, these rides in India were coordinated by the
company, but now, these events are coordinated by dealers themselves

Rock Riders mates music with Harley-Davidson motorcycles(thoroughbred bikers taste in


music in Rock).

The Indian customer belongs to a state of mind rather than a particular demographic profile.

India-specific model that displaces a lower capacity than the 883

Targeting younger riders with offerings like the Forty-Eight, Iron 883, and Cross Bones.
These bikes have the retro styling popular with younger riders today

The customization programme will help the customers make their bike unique (Whatever is
available to Harley owners abroad in terms of accessories and customized parts is also
available to the Indian buyer)
Harley Davidson in India

Boot Camps, Harley-Davidson(invites riders to come and taste life aboard its thick two-
wheeled slice of Americana)

Breakthrough initiatives - Boot Camps, Founders Ride, Harley Rock Riders and
Freedom Film Festival

Alliances with banks for financing (Down payment + EMIs)

Reason For the Double Price in India :

(i)Imports its bikes into India as Completely Built Units (CBUs), paying 60 % import duties
for the bikes and 30 % local taxes which double the MRP

(ii) So for eg. Ultra Classic Electra Glide(CVO) which costs USD 35,999 (INR 16,02,000) in
US, costs INR 34,95,000 in India
Core Competencies

Custom
Brand
er Image
Loyalty

Dealer Financial
Developme Assistan
nt Program
ce
PESTEL Analysis
Political Economic

Influenced U.S. president Reagan in Due to 2008 economic crisis, U.S. sales
1983 to increase tariff on imported by volume went down by 35% in 2 years
motorcycles to 45% Planned to enter India because of
The Indian Government imposed an steadily growing GDP and middle class
import duty of 60% on CBD units and In order to cut the prices and also target
30% on CKD units upper middle class, it currently
Harley Davidson was allowed in India manufactures in Haryana. The lowest
in exchange of export of mangoes to priced model is Street 750 which is
U.S. available at 5 lakhs rupees
Trump indirectly asks India to reduce The implementation of GST has
import duty on motorcycles imported increased the tax rate from 30 % to 31%
Technological
from U.S Social
PESTLE on bikes above 350 cc

Associated with countercultural


elements like the protagonist of movie Implemented just in time and statistical
Easy Rider process to increase production of defect
Indian made components for bikes free bikes.
increased the demographics likelihood Introduced V rod design featuring
to buy overhead cams and liquid cooling
The Japanese and German auto Anoop figured that in India, dealers did
manufacturers didnt let Indians to run not have technical knowledge for fixing
their companies. it hired Indians from the bikes.
other companies to make an impact in Currently, it has implemented IoT in its
India NY plant, plants in India should also be
Legal
upgraded to support industry 4.0
The initial buyers in India associated
Environmental
themselves with the core values of Focused on lighter bike because in some
camaraderie and freedom H.O.G. countries licensing rules required young adults
organizes
Harley Davidson
events.was fined $15 to get familiar with lighter bikes first.
million for selling tuners which Lack of emission standards in India for 500cc
increased air pollution from bikes and above bikes delayed launch
and violated EPA norms 100% Foreign Direct investment (FDI) is
Harley Davidson should focus on allowed under the automatic route in the auto
making electric bikes sector .Manufacturing and imports are
SWOT Analysis
Internal External
Strengths Weaknesses
Brand Appeal No direct control over
Passive distribution approach revenue growth
Production methodologies Vary of entering into small
Product selection markets
High customer pull High selling price in emerging
markets

Opportunities Threats
Emerging markets Volatile markets
Large motorcycle markets Japanese manufacturers
Market reforms in India High duties and taxes
Indian markets flooded with Emission standards in India
lightweight bikes Negative returns in initial
Untouched segments years
Ansoffs growth strategy matrix

Market penetration Product development


Existing

Market: US, Canada and Europe New Product: Bikes for youth and
Product: Five basic model families women/girls
between the price range $8000 to Harley owners were pre-dominantly male
$37000 Sportster was considered as a girls bike
M Limited edition bikes
and as a compromise for a cheaper Harley
Price range below $8000 to make it
A

National rallies and visiting dealerships
General merchandising- T-shirts
affordable for the youth

R Customizing and modification options

K
E Market development Diversification
Market: India Product: Smaller and lighter bike
New

T Untapped Indian market for bikes in the Market: India


500cc-1,000cc range Market research resulted in a water-cooled
Average age of 25 and median income:
concept bike with aggressive styling
$40,000 Locally manufactured bike for $6000
Distributing and selling CBU motorcycles Addition to other emerging and developed
Assembling and selling CKD motorcycles
markets

Existing New
PRODUCTS
Strategic Groups
Experience Focused Performance Focused
Harley enjoys exceptional Harley struggles in countries
brand recognition like India & China as most
Apart from technological people here use bikes to
expertise, the main advantage commute for work and loud
is driving a Harley- the loud, heavyweight bikes are not
rumbling noise and showing ideal for daily commuters
off the wings on the brand Honda and Yamaha lead
Harley and Ducati fall under technological innovation and
this group hence fall in performance
focused categories
These companies perform
better in India as they better
cater to the demographics
demand
VRIO ANALYSIS

Valuable Rare Imitability Organization


HD valuable Though the bikes Market position is The un-substitutable
because of lifestyle are not rare, difficult to imitate capabilities are
factor however the knowledge and the
Neutralizes other reputation and encouragement
competitors as personal value is provided to suppliers,
these factors cannot rare employees and
be duplicated customers
Porters 5 Forces

4 major Requires Choice in Suppliers of Passenger


competitors high capital switching manufacturi cars, sports
but none in investment between the ng units- bikes,
500-1000cc products low scooter
segment 60% import offered in bikes
duty and the industry Repair parts
Competitors 30% tax High as Luxury
have larger rate Expensive supply was vehicle, so
resources product and low there are
and are Low less buyers few close
more economies substitutes
diversified of scale
Enfield close
IE MATRIX

Internal-External (IE) matrix used to


analyze the working conditions and
strategic positioning of a business.

Based on analysis of internal and external


business factors which are combined into
one suggestive model.

Composed of EFE and IFE matrices.

Suggests the company to adopt one of the


following strategies:
Grow and Build Strategy
Hold and Maintain Strategy
Harvest or Exit Strategy
IFE MATRIX
InternalFactorEvaluationMatrix(IFE)

Strengths Weight Rating WeightedScore


1.
Clearbrandpositioningbetweenpremiumbrandandinclusivity 0.15 4 0.60
2.
LocalexecutiveteamconsistingofhiresfromJapanesevehiclebrands 0.08 3 0.24
3.
Highbrandloyalty 0.12 4 0.48
4.
Completebrandexperienceastheprimarydifferentiatingfactor 0.12 3 0.36

Weaknesses Weight Rating WeightedScore


1.
Qualityissuesforapremiumlypricedmotorcycle 0.12 1 0.12
2.
Lackoftrainedaftersalesservicesupportintheinitialdaysoflaunch 0.08 2 0.16
3.
Heavy,aircooledbikesnotsuitableforIndianconditions 0.12 1 0.12
4.
HighsellingpriceinemergingmarketslikeIndia 0.12 1 0.12
5.
FailureinsuccessfullaunchofHDBrandthroughHBTshirts 0.09 2 0.18

TOTAL 1.00 2.38


EFE MATRIX
ExternalFactorEvaluationMatrix(EFE)

Opportunities Weight Rating WeightedScore


1. Nocompetitioninthe500ccto1000ccrangeofmotorcyclemarket 0.17 3 0.51
2. HDbikeclubssprungupinvariouscitiesarossthecountry 0.08 3 0.24
3. TheonlycompetitorinleisureridingspaceinIndiaRoyalEnfield. 0.15 3 0.45
4. MarketResearchindicatingdemandforsmaller,lightermotorcyclewhichcanbeimported 0.10 4 0.40
tootheremergingmarkets

Threats Weight Rating WeightedScore


1. Cheaper&highqualityJapanesemotorcycles 0.12 2 0.24
2. HighimporttariffsinIndia,forCBUaswellasCKD 0.10 3 0.30
3.
Lowtrafficspeeds&highambienttemperaturewhichnecessitateswatercooling 0.08 1 0.08

4.
Lowqualityroadswhichrequirehighergroundclearanceforthemotorcycles 0.08 1 0.08

5. EmmissionStandardsinIndia(notspecifiedforabove500cc) 0.06 3 0.18


6.
Nike/BenettonascompetitorsfortheGMdivisionofHD 0.06 2 0.12

TOTAL 1.00 2.60


IE MATRIX

IE Matrix suggests a Hold and Maintain strategy, according to


which, Harley Davidson should focus on Market Penetration &
Product Development.
RECOMMENDATIONS

Make the reporting structure more decentralized

Break the product driven silos and focus more on a


suite of products and services
Look for local sources of parts for the new bike model

Revamp the strategy for GM segment for better


revenue generation
Create a more global image rather than an American
image with the new and future customers
THANK YOU!!