Harley-Davidson: creating experience from strategy

As an example of "Deriving Strategy Recommendations" let's take the case of Harley-Davidson. And let's take to the case of Harley-Davidson a few years after it was bought out by its managers in a leveraged buyout, say around about 1990. What was interesting about Harley-Davidson at that time was here was a company that had suffered under investment for an extremely long period of time. So that if we started looking at what would appear to be the most important resources capabilities that were needed to compete effectively in the motorcycle industry, the kinds of things that we came up with were nearly all areas where Harley-Davidson was in a position of substantial weakness compared to its leading competitors, and those leading competitors were companies like Honda; the giants of the world motorcycle industry, companies like Yamaha, Suzuki, Kawasaki, BMW, and so on. All substantially larger companies, all companies with much, much stronger position in technology, in manufacturing, in purchasing and most of the other resources capabilities that we could point to. However, Harley-Davidson did have one ace up in its sleeve. The Harley-Davidson brand name, the Harley-Davidson tradition, the Harley-Davidson loyalty of its customers was something that was quite unrivalled. Now what Harley-Davidson did was to develop a strategy which exploited to the full that strength in its brand image while at the same time minimizing the impact of these other weaknesses which it had. So the key to that strategy was, I guess two major factors. One was to say, "We are going to specialize in a single part of the motorcycle market. We are going to concentrate on super heavyweight bikes, that is bikes of more than 850 CCs. Within that segment, we are going to focus upon the cruiser segment and in competing with that we are going to adopt a very particular differentiation position. We were not going to compete on technology, we are going to compete on the authenticity of the Harley-Davidson traditional American motorcycle." And in fact, by adopting that strategy and by adopting a strategy which ultimately meant that the company said, ''We are not in the business of supplying motorcycles. We are in the business of supplying the Harley-Davidson experience." The whole notion of the experience being the riding, the image, all those kinds of factors that provide satisfaction to the consumer, in fact meant that many of these weaknesses of Harley-Davidson, in fact, either became irrelevant or indeed possibly even became strengths. So in the case of technology, the fact that Harley-Davidson motorcycles embodied technologies that were at least half a century out of date. Then this all became part of this authentic experience with an authentic American made motorcycle.