FORUM - Chapter 3 - Harley and the Value Chain
In order to address the course learning objective."...demonstrate the ability to analyze and then createbusiness and corporate strategy options that fit thefirm's internal environment.." please assess thefollowing passage.
Harley Works to Draw in Younger Riders
With motorcycle sales in a slump, Harley-Davidson is boostingits efforts to attract more young riders. Harley has been ahigh-end, aspirational brand for motorcycle riders for severaldecades, their image and product line resonating with Baby Boomersand Generation X riders. With those rider groups aging, Harley hasseen its sales decline in recent years.
To help attract younger riders, in 2018, Harley is revamping itsproduct development process, focusing on models that appeal toyoung adults, women, and minorities—in addition to its core marketof older white men. This leads to a focus on smaller, moreaffordable bikes. Fitting this direction is the development of thestreet class of motorcycles, which are designed for urban ridingand have a narrower chassis compared to other Harley models andstart at less than $7,000. To improve their cost basis, Harley hasalso revamped its procurement process to look for more costefficient global suppliers and has even shifted some of itsmanufacturing to India. Harley also sees the need to reorient itsmarketing to connect with younger riders, including shiftingmarketing activities from general market advertising to local,dealer-centric social activities. In short, the firm sees the needto undertake change across its value chain.
Progress to date is mixed. Younger riders are less likely toride motorcycles, but Harley argues that the percentage of youngriders who opt for a Harley is actually higher than it was withprior generations. Whether Harley will be able increase the numberof younger riders is the key to its long-term sales potential.
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Please address the following questions:
- Will Harley be successful in drawing in younger riders?Why/why not?
- What other parts of the value chain could Harley revamp tobetter serve the needs of younger riders? Pleaseexplain.
