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Malik Internationalization 1903
Network: 1,500 dealers
$6 billion / year famous big bikes
75% total sales in the United States
Quality control US based manufacturing.
1 million members
100,000 EU Competition International Expansions What is the
nature of the international business environments Harley faces? What types of risks does the firm face? How can Harley benefit
from expanding abroad? What
types of advantages can the firm obtain? What advantages acquired abroad can help Harley improve its performance in its home market? The Harley icon is a powerful weapon. Advertising strategy should underscore its immense global branding, yet employ local people. Harley can leverage global efficiencies in terms of technology, production, and distribution. However, tailoring motorcycle preferences to local markets is also paramount. What strategies should management apply to grow the firm’s sales in those regions? Competing with Lifan and Zongshen, China's emerging competitors, presents both challenges and opportunities. Harley may take the offensive and compete even more aggressively in competitors’ domestic markets and/or implement a more defensive strategy in their own home market. Either way, innovation and market research will be important. Competitors such
as Lifan and Zongshen are
beginning to emerge from China,
where they enjoy competitive advantages like low-cost labor and extensive experience
with emerging markets. How can Harley compete against such firms? Should Harley more aggressively pursue emerging markets such as Brazil, China, and India? If so, what strategies will help it succeed in those markets? Evaluate Harley’s
initiatives in the evolving regulatory environment on global greenhouse gas. What advantages does Harley gain by attempting to produce environmentally safe and sustainable products? Q1 Q2 Q3 Q4 Q5 California, Taiwan, Japan and various European countries are developing new standards aimed at GHG reduction on motorcycles.
Harley the Proactive - stay ahead of evolving regulations.
Most of Harley’s greenhouse gas (GHG) emissions emanate from its manufacturing plants.
Management is moving to reduce: pollution, energy and water usage, as part of an integrated sustainability strategy.
Addressing climate change by preparing for the transition to a lower-carbon economy.
In 2005, they launched a motorcycle recycling program in Japan.
These actions, and its recycling program, help align Harley’s actions with stakeholder expectations and strengthen their brand, which is in fact Harley’s competitive advantage. In USA, Harley competes primarily in the custom and touring segments, which account for around 85% of “heavyweight” sales.
competitors are all headquartered outside the United States and include Honda, Suzuki, Yamaha, and Kawasaki in Japan, and BMW, Ducati, and Triumph in Europe. New competitors are emerging from China.
By 1970 inexpensive, lightweight models (Honda, Kawasaki, Suzuki, and Yamaha) entered the US market The European market is fragmented due to country differences and the diversity of European preferences. This coupled with the narrow European streets and high speed limits, and a functional rather than recreational focus, as one would expect, there is a greater demand for the standard and performance motorcycle segments in Europe.
However, if Harley were to collaborate with a Japanese partner, this mode of entry would enable market knowledge and branding economies with that partner. Additionally, Harley’s organic structure of three interlocking circles- (1) Create Demand Circle
(2) Produce Products Circle
(3) Support Circle would fit well with the Japanese culture than a more traditional structure. Harley has reduced its costs of R&D, manufacturing, and service by sourcing plants and other operations in lower-cost locations such as Brazil and closer to target markets, in order to minimize distribution costs, e.g. Australia. Harley could be the example of how internationalization revives declining sales and optimizes cost structures, by developing international value chains that minimize expenses, leading to higher profits. The key to Harley’s sustainable growth is global expansion. Honda, Yamaha, & Kawasaki BMW & Suzuki 4% high import tariffs Counterfeit Europe How can Harley effectively compete with rivals from Japan and Europe? Domestic and international environment: complex and risky All FOUR types of risks in international business are present: Cross-cultural Risk Harley-Davidson Motor Company and Buell Motorcycle Company collectively operate eight production/assembly facilities in the U.S., Brazil and Australia. Growth Markets: Canada, Japan, Australia, Latin America Differences in language, lifestyles, mindsets, customs, and religion of the national culture. Cultural differences may lead to inappropriate business strategies and ineffective relations with customers. Country Risk (a.k.a as political risk) Chinese Market- With the opening of its third dealership in China during 2008, Harley faces a large and potentially risky market. Differences in host country political, legal and economic regimes may adversely impact firm profitability. Government intervention: restricts market access; imposes bureaucratic procedures hindering business transactions.
Currency or Financial Risk International Risk from Global Economic corruption U.S. Dollar. Risk of adverse exchange rate fluctuations, inflation and other harmful economic conditions create uncertainty of returns. When currencies fluctuate significantly, the value of the firm’s assets, liabilities and/or operating income may be substantially reduced.
International/Domestic Business Risk- Changing Emission Standards Climate change concerns will lead to tailpipe emission limits, which will eventually require product design strategies to meet the new regulatory requirements. Market Penetration As most of Harley’s core baby-boomer market is currently 44-62 years old, their peak riding years may be behind them. Japan China India Brazil Canada Thank You!