Question

Harley-Davidson derives 77% of its sales from the sale of motorcycles. The other 23% is a result of increased customer purchases of clothing, parts and accessories. The incremental sales of related products have much higher margins, build customer loyalty and enhance their brand awareness and brand equity as wearers of Harley-Davidson merchandise communicate their brand name. Which offensive strategy is Harley-Davidson pursuing?

Answer 1

Harley-Davidson is pursuing a defensive strategy known as diversification by deriving additional revenue from the sale of clothing, parts, and accessories. This strategy allows them to build customer loyalty and enhance their brand equity.

Step-by-step explanation:

Harley-Davidson is pursuing a defensive strategy known as diversification. Diversification occurs when a company expands its product offerings or enters new markets in order to reduce risks and reach a wider customer base. In this case, Harley-Davidson is deriving 23% of its sales from the sale of clothing, parts, and accessories, which allows them to generate additional revenue and build customer loyalty through brand awareness. By offering these related products, Harley-Davidson is able to communicate its brand name and enhance its brand equity.