Case Questions 1. According to Harley-Davidson\'s Africa country manager, Celine

Question

Case Questions 1. According to Harley-Davidson's Africa country manager, Celine Gruizinga, "No one who comes here is going to make a quick buck. It's no small feat. It's a type of commitment that takes decades." Let's say that you're the CEO of a publicly owned U.S. company that manufactures fashion footwear. You're interested in getting involved in the sub-Saharan Africa market, which will eventually total 1.1 billion middle-class consumers-50 years from now. You need to decide which sort of globalization strategy would work best for you: exporting, licensing, joint venture (or some other form of strategic alliance), or direct investment. Generally speaking-and given Gruizinga's warning-what are the pros and cons of each option? 2. As it happens, Celine Gruizinga is also Harley's first-ever female country manager. She's also an avid Harley rider. The company is targeting women buyers in sub-Saharan Africa, who already account for 26 percent of Harley riders in a region where the company reports "a significant increase in the number of both white and black women riders." Interestingly, Harley is also targeting women in the United States. What kinds of marketing appeals might Harley make to female consumers in both markets? What kinds of appeals will probably have to be distinctive for each market? Why do you think more women are interested in buying Harleys?

Explanation / Answer

1. The globalization strategy that will work best here is to enter the market through a strategic alliance. This is because the African market is quite different from the U.S. market and the consumers in the African market have their unique set of needs and requirements. Thus the strategy that were successful in U.S. and other developed countries cannot be replicated in Africa. It is here that a strategic alliance will help the company to leverage the knowledge and understanding of the local partner about the uniqueness of the African market. The company can then tweak its strategy and product offerings to suit to the requirements of the consumers in the African market.

Pros of the exporting option are that no production of goods is done in the target market and hence no new capital expenditures will have to be made. The cons of this option is that in the long run this option will not be viable as the company will be better off by starting its own plant to avoid export duties.

Pros of licensing are that little investment will have to be made to enter the target market. In terms of cons it can lead to dilution of patents and trademarks in the long run if there are issues with regards to quality aspects of the licensee partner.

Pros of joint venture (or strategic alliance) are that it enables the convergence of strategic goals with competitive goals. Also local partner’s knowledge and help ensures a smooth and trouble free entry. In terms of cons when the demand is increasing manifold then this strategy is no longer viable as setting own plant is more beneficial.

Pros of direct investment are that the company can have a control over the quality of its products. In terms of cons the company will have to make large expenditures in the form of capex (capital expenditures) and this will have to be done at the start of the operations.

2. To appeal to female consumers and buyers Harley will have to increase the brand appeal of its motorcycles to female buyers and riders. To do this the company will have to put the women buyers and riders first and not its products and motorcycles. The company should identify with the ethos of women and translate what womanhood stands for in their motorcycles. The need for riding for females will be drastically different from the need for riding for males. This difference has to be incorporated in their products as well as their marketing campaign.

The nature of appeal and campaign will have to different for the U.S. and the African markets. This is because females in U.S. have had a life full of more exposures and hence they have a forthcoming ideology. On the other hand females in Africa have had led a life full of inhibitions and for them riding will stand for breaking free from the inhibitions and constraints that they were subjected to.

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