Business Strategies

Business Strategies
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Abstract
The purpose of this paper is to analyze how Harley-Davidson uses diversification strategies and vertical integration in its business. Diversification involves increasing the range of products or services in a particular market. Also, it consists of entering new markets in different geographical regions. Vertical integration is gaining control of the supply chain through activities like mergers, acquisitions, and forming partnerships. Harley-Davidson initially used diversification by concentrating on transportation vehicles and motorcycles. However, currently, it focuses on the motorcycle and related parts. Similarly, the company continues to expand to new markets in Africa, Asia Pacific, Latin America, and Europe. Also, it has formed partnerships and collaborations with unions and other institutions involved in the control of commercial and technical resources. Therefore, the paper argues that the company should increase the use of both vertical diversification and vertical integration since they have proven to be effective in improving market share, controlling the supply chain and generating more revenues.
Keywords: Diversification, Vertical Integration, Supply Chain

Business Strategies
Harley-Davidson use of diversification
Diversification is the process of enlarging a business by increasing the range of the range of products or services or entering a new market. It ensures that the management reduces risk through allocating capital to a different field of operation (Maroof, Shah & Ahmad, 2017).

Initially, Harley-Davidson used diversification through concentrating in two areas; Transportation Vehicles segment and motorcycle. Currently, the company uses the strategy to expand to new markets. For example, unlike before, the company now operates in all the continents. Also, it has divided the motorcycle segment to financial and motorcycles and related parts. Diversification has improved the generation of revenues and increased the company’s customer base.
Harley-Davidson’s use of vertical integration
Vertical integration involves acquiring control of the supply chain in a particular field. For example, in the United States, Harley-Davidson sells motorcycles and related parts at a wholesale price to at least 684 independent dealers who provide full service. It has enabled the company to align its supply of motorcycles and associated components to demand in the country. Also, they supply merchandise like motorcycle parts and accessories to other licensed outlets like Secondary Retail Locations (SRLs) and Seasonal Retail Outlets (SROs) (Wheelen & Hunger, 2006). Further, in motorcycle manufacturing, the company forms partnerships with local unions and uses collaborative relationships to have access to commercial and technical resources which are used to improve the design and speed of manufacturing motorcycles.
Harley-Davidson should increase the use of diversification to enter potential markets. Admittedly, the company has already diversified to South Africa; however, it could open other markets in African countries. Also, the company should increase the use of vertical integration strategy to gain more control of the supply chain like acquisitions.

References
Maroof, Z., Shah, S. A., & Ahmad, B. (2017). Does Vertical Integration Strategy For Merger & Acquisitions A Fruitful Decision? An Evidence from Pakistani Merger Market. Academy of Accounting and Financial Studies Journal, 21(2), 1-31.
Wheelen, T. L., & Hunger, J. D. (2006). Cases in strategic management and business policy (10th ed.). Upper Saddle River, NJ: Prentice Hall. ISBN 9780131494602