Harley Davidson Case Blog 1

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1. What is the nature of the international business environments Harley faces? What types of risks does the firm face? The nature of the international business environments Harley Davidson faces are intricate and varies due to cultural and regional needs of the diverse markets its establishment competes in. This is clearly shown in the diversification of sales in its two major markets, one at home in the U.S and the other in Europe. As seen in the sales mix for 2006, Custom models accounted for 47.4% in the U.S while only a mere 13.4% in the European market. Other sales based on style of bikes are in the U.S performance 15.1%, touring 35.5%, and standard 2.1% while its counter market sales in Europe were performance 41.4%, touring 26.1%, and standard 19.2%. The reason Harley faces such diversification is clearly due to consumer preferences. The European markets desires performance bikes made for the open roads and high speed demands. Also in some major cities maneuvering a traditional heavyweight bike is an obstacle consumers are not willing to take. While consumers at home are loyal to the freedom and rebellious image Harley provides with its distinct sound these bikes are capable of producing. Besides the U.S and European market dilemma Harley faces other challenges in the Asian and Latin America market. The demand of these markets are a low cost bike which Harley will need to address if they want to succeed in these competitive markets, while there already exists a big presence of low cost competitors such as Honda, Suzuki and Yamaha as well as counterfeiters. In order to address this issue they face the risk of changing their brand image of quality with a large price tag which could have a snow ball effect in other markets demanding cheaper bikes as well. Another risk Harley faces is one which can be observed by a similar mistake Cadillac made in the past.

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