THE THREE C’S SYNDROME OF FAILURE COMPLACENCY CONSERVATISM CONCEIT

HARLEY VS HONDA INGREDIENTS OF HONDA’S SUCCESS Willingness to beard the lion in his own den Confront a dangerous adversary on his own ground Identifying the potential for expanding the market Effective use of competitive strategy Effective use of marketing strategy and a complete marketing mix Flexibility and responsiveness

LEARNING INSIGHTS NEVER UNDERESTIMATE A COMPETITOR DON’T GET CAUGHT IN THE 3-C’S SYNDROME OF FAILURE How to avoid 3-C’s syndrome? -- Monitor the environment -- Bring fresh blood into the organization -- strong commitment to customer service and satisfaction -- continuing corporate self-analysis ANY INDUSTRY OR MARKET MAY HAVE UNTAPPED POTENTIAL – BUT ONLY AN INNOVATIVE APPROACH CAN HARVEST IT MASS-MEDIA ADVERTISING CAN BE A POWERFUL TOOL.

HOW HARLEY BEAT BACK THE JAPANESE Leader of super heavy weight motors in the 1970s Lost shares to Japanese manufacturers Deteriorating quality Vaughn Beals, CEO, tried to turn it around Late 1970s : a series of cosmetic changes Super-glide: emulating custom bikes Market share still dwindling New Management>>Continuing manufacturing problems

MANUFACTURING IMPROVEMENTS JIT inventory systems More quality concern Employee involvement in quality control Dramatic improvement in quality and cost reduction MARKETING IMPROVEMENTS (Tariff protection) Spent heavily to bolster dealers and to develop a close relationship Harley Owner’s Group (HOG): Maxim “The sale begins after the sale” 1988: Harley’s 85th year celebration 2003: Harley 100th birthday bash (August)

NEW LEARNING INSIGHTS A FIRM CAN COME BACK FROM ADVERSITY HARLEY DAVIDSON FIGHTS BACK NEW LEARNING INSIGHTS A FIRM CAN COME BACK FROM ADVERSITY PRESERVE THE CORE BUSINESS THE POWER OF A MYSTIQUE