Harley Davidson Hits a Roadblock in India – Takes a U-turn

Case Code: CLBS166 Case Length: 4 Pages Period: 2009-2020 Pub Date: 2021 Teaching Note: Available

Price: Rs.200 Organization: - Industry: Automotive Countries: India Themes: Global Strategy, Strategic Alliances, Market Entry & Exit

Abstract

The case ‘Harley Davidson Hits a Roadblock in India – Takes a U-turn’ is about the exit strategy adopted by Harley Davidson Inc. (Harley) in India. The iconic American motorcycle brand had ventured into India in 2009 with its heavyweight cruiser bikes. But it was not able to capture the market due to the high cost of its bikes and its failure to read the Indian mindset. The case dwells on the circumstances that led to Harley entering the Indian market and the challenges faced by it. Burdened with increasing losses, Harley had decided to exit the Indian market as part of the ‘rewire strategy’ adopted by its parent company.

The case details the strategy adopted by Harley and discusses its planned exit and how it later decided to shelve its exit plan and enter instead into a strategic alliance with Hero MotoCorp to sell and service its bikes and other merchandise in the Indian market. It remains to be seen whether the strategic alliance with the Hero Group will bring Harley success.

Issues

• Evaluate the concept of exit strategy that global companies deploy in unsuccessful markets.
• Understand how strategic alliances with local partners help global companies to compete in the local markets.
• Analyze the concept of the rewire strategy adopted by the global companies.

Introduction

In September 2020, Harley Davidson Inc. (Harley), the iconic American motorcycle brand, announced its exit from the Indian market. This decision was taken as part of the company’s ‘Rewire’ strategy under which it would focus only on select markets and exit those where sales and profitability were low. Harley had entered India in August 2009 with its heavyweight cruiser bikes. Harley saw India as the right market to launch its bikes, given that the country had the second largest motorcycle market in the world, a growing middle class, and strong economic growth. Mark Levatich, Chief Operating Officer at Harley, said, “Given the rapid development of India’s economy and physical infrastructure, this is exactly the right time to bring the world’s greatest motorcycles to one of the world’s largest motorcycling nations.” ..

Keywords

Harley Davidson; Hero MotoCorp; Rewire Strategy: Strategic Alliance; Exit Strategy; Cruiser Bikes; Iconic Brand; Strategic Licensing Agreement; Premium Motorcycles

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