Hyundai Managers Learn Strategy from Provo Bikers

PROVO, Utah — Aug 31, 2007 — This summer, 19 Korean executives from Hyundai Heavy Industries got a surprise crash course in American biking culture when a pack of Harley-Davidsons roared into the Marriott School of Management parking lot to enhance the visitors’ classroom studies. For 11 years HHI, the top shipbuilder in the world, has sent its managers to the Marriott School for three-months of trainings in business English, ethics, marketing and more.

“We have become one of the most important training programs that Hyundai has,” says Robert Holcombe, the program’s administrator. “In fact the company has felt it is so important they have an experience at BYU that managers must participate in order to advance at HHI.”

During a weeklong focus on business strategy, assistant professor David Bryce used a case study of Harley-Davidson Inc. to illustrate principles of strategic maneuvering. Specifically, Bryce taught that Harley-Davidson’s sales are driven primarily by unrivaled brand loyalty.

“Few companies in the world enjoy loyalty so strong that customers are willing to tattoo the brand onto their bodies,” Bryce says. “Competitors interested in challenging Harley's dominance in the heavy bike segment will have to find a way to reduce or duplicate this incredible loyalty.”

The Korean visitors, most of whom were unfamiliar with American motorcycles, got a closer look at this strategic advantage when seven Harley-Davidsons dropped their kick-stands just outside the Marriott School. The bikers represented the Provo chapter of the Harley Owners Group or HOG, a national organization — independent from Harley-Davidson Inc. — that fosters a lifestyle of adventure and freedom that helps fuel the company’s success.

“The visit allowed the Hyundai executives to witness firsthand the sources of differentiation that Harley enjoys relative to competitors,” Bryce says. “It provided added richness to classroom discussions and deeper understanding of the strengths and potential vulnerabilities of Harley's strategic position.”

As the executives asked questions and posed for pictures on the Harleys, the bikers shared personal stories to explain their own tattoo-inspiring loyalty to Harley-Davidson. One biker’s grandfather sold Harleys 90 years ago. Another felt patriotic for riding an American-made motorcycle. And they all loved the distinctive, deep rumble of the engine.

The Marriott School is located at Brigham Young University, the largest privately owned, church-sponsored university in the United States. The school has nationally recognized programs in accounting, business management, public management, information systems, organizational behavior and entrepreneurship. The school’s mission is to prepare men and women of faith, character and professional ability for positions of leadership throughout the world. Approximately 3,000 students are enrolled in the Marriott School’s graduate and undergraduate programs.