C03: Harley Davidson- Internationalization in the Trump Era

Question 1

Harley Davidson Business Model

Answer 1

Harley-Davidson, Inc. (H-D), or Harley, is an American motorcycle manufacturer, founded in Milwaukee, Wisconsin in 1903. Harley-Davidson manufactures its motorcycles at factories in York, Pennsylvania; Milwaukee, Wisconsin; Kansas City, Missouri, Manaus, Brazil, and Bawal, India. The construction of a new plant in Thailand is scheduled to begin in late 2018. The company markets its products worldwide. Besides motorcycles, the company licenses and markets merchandise under the Harley-Davidson brand, among them apparel, home decor and ornaments, accessories, toys, and scale figures of its motorcycles, and video games based on its motorcycle line and the community.

Question 2

Harley Davidson in domestic vs foreign market

Answer 2

Domestic Market:

• Pressure from the competition
• Image problems
• Narrow niche (age, mainly white people, male)
• Declining market share -> declining value

Foreign Market:

• Competitions even higher
• Image problems same
• Additionally tariffs and regulations

Question 3

Active Collaboration vs keeping distance to Trump Government Harley davison

Answer 3

Active collaboration
> Exchange of favors
> But political instability
> Potential negative impact from customers that oppose government

Keeping distance
> Better for business if they optimize efficiency
> Have to deal with pressure from the government
> Large companies have to collaborate

Question 4

How do Donald Trump’s policies with respect to foreign trade and foreign investments affect Harley-Davidson?

Answer 4

• EU increased import duty on motorcycles in retaliation to imposition of increased tariffs on European steel and aluminium
• increased the price
• so they decided to produce elsewhere like Thailand
• Trump tweeted they should not do it and encouraged a boycott of their products

Question 5

Which national standards and regulations besides import tariffs should be taken into account when choosing a country to open a new plant?

Answer 5

• Emission requirements
• lobbying campaign against
• Export tariffs
• Labor costs/ labor regulations

Question 6

Which regulatory consequences may be expected if Harley-Davidson decides to open a new plant abroad? Consider both potential regulatory consequences in the U.S. and in another country where a new plant is opened.

Answer 6

Trump further boycotting the company

Question 7

What are the possible regulatory consequences if Harley-Davidson decides to open a new plant in the US rather than abroad?

Answer 7

Facing high export tariffs and also import tariffs (steel, etc.)