Harley-Davidson's International Strategy: Why US Production Stays
This paper examines why Harley-Davidson continues to manufacture exclusively in the United States despite its expansion into European markets. The analysis covers three core factors: excess domestic production capacity driven by a shrinking core demographic, the company's deeply American brand identity that would be undermined by overseas manufacturing, and the price-insensitive nature of its premium customer base. The paper also considers hypothetical scenarios under which the strategy might change, ultimately concluding that Harley-Davidson's national identity is so intrinsic to its brand value that foreign production remains essentially unthinkable, drawing a parallel to Corona beer's Mexico-only production model.
- Introduction: Export Model Over Overseas Production: Harley-Davidson's export approach to international expansion
- Excess Capacity and Demographic Shifts: Aging boomers and flatlined domestic demand
- American Brand Identity as a Production Constraint: Why US manufacturing is inseparable from brand value
- Premium Positioning and Price Insensitivity: Premium customers and low price sensitivity
- Could the Strategy Ever Change?: Scenarios where overseas production might be reconsidered
✍️ How to write this paper — guide, tools & examples ▾
What makes this paper effective
- The argument is structured around three clearly distinct reasons, each treated in its own paragraph, making the logic easy to follow without the need for subheadings.
- The paper uses a vivid and memorable analogy — Corona beer's Mexico-only production — to reinforce the central claim about nationally branded products, grounding an abstract strategic point in a concrete example.
- The tone is confident and direct; the writer takes a clear position and defends it rather than hedging unnecessarily, which is appropriate for a strategic business analysis.
Key academic technique demonstrated
The paper demonstrates multi-factor strategic reasoning: rather than isolating one explanation, it systematically evaluates capacity, brand equity, and pricing dynamics as interlocking constraints on the firm's location decision. It then stress-tests the argument by considering conditions under which the strategy might reverse — a useful critical-thinking move that strengthens rather than undermines the conclusion.
Structure breakdown
The paper opens by framing the strategic question and stating Harley-Davidson's chosen approach. Three body sections each address one reason for maintaining US-only production. A final section anticipates counterarguments and hypothetical reversals before reaffirming the conclusion with the Corona analogy. The reference to the 2013 Annual Report anchors the claims in a primary corporate source.
Introduction: Export Model Over Overseas Production
When choosing a strategy for international expansion, companies face a number of alternatives, including building new production facilities overseas versus maintaining domestic production and exporting. Although Harley-Davidson has expanded its footprint into European markets, it has maintained its manufacturing in the United States and followed an export model for international growth. There are several compelling reasons for this approach.
Excess Capacity and Demographic Shifts
The first reason is that revenue at the company is relatively slow-growing. Harley-Davidson's core demographic during its high-growth years was middle-aged baby boomers. This demographic is beginning to age out of the market, which has affected sales; Generation X is a much smaller cohort, and Generation Y has not yet entered the target market. As a result, domestic sales have flatlined at best.
More importantly, this situation likely means there is already excess production capacity at Harley-Davidson's existing manufacturing facilities. Building new capacity in Europe would only increase the amount of excess capacity in the company's system, making overseas investment difficult to justify on purely operational grounds.
References
Harley-Davidson Annual Report 2013.
Create your account
Always verify citation format against your institution’s current style guide requirements.