What Is the Nature of the International Business Environments Harley Faces?
What is the nature of the international business environments Harley faces? What types of risk does the firm face?
The nature of international business environment Harley faces varies due to political, financial, social and cultural needs. Harley was not able to gain access to markets in India because of high trade barriers and local emission regulations. Sales in regions like China was very challenging for Harley due to average wages being lower than the price of a Harley motorcycle. Also, some of the Chinese cities were restricting the use of motorcycles to reduce the loud noise and drive by thefts.
The following were the types of risks that Harley faces;
Cross-cultural Risk – Harley wants to expand across the globe as it is already present in some countries like United States, Japan, and Europe. Most of these countries have a lot of differences in language, custom, and religion. Americans preferred custom and touring motorcycles while the Japanese customers liked the lightweight bikes. Also, the Europeans enjoyed the performance motorcycles.
Country Risk – Harley had to deal with high trade barriers in China and local emission regulations in India.
Currency (Financial) Risk – Another risk that most of the international businesses are facing including Harley is the exchange rate. When the U.S. currency rises the production cost of products manufactured in the United States goes up while the global sales price goes down due to the exchange rate.
Commercial Risk – Harley made a poor choice on their purchase of the Italian motorcycle firm MV Agusta for $109 million in 2008. The reason why this choice poorly made is the timing of the market bad enough which made that strategy a more expensive since they were forced to strip its interest.
How can Harley benefit from expanding abroad? What types of advantages can