Husqvarna Motorcycles – company overview
Husqvarna is a brand with Swedish origins characterized by a long history. The brand's models, divided into Enduro, Motocross, Supermotard and Dual categories, are all produced in Italy at Cassinetta di Biandronno plant, in Varese province” (http://husqvarnamotorcycles.com). During last two years Husqvarna was acquired by the BMW group that has funneled a rich source of financing and capabilities to increase the value of the brand position and offers future opportunities in platform sharing with one of the most well known brands in the world. As the brand identity process in currently engaged by both management groups the aspirations and hopes are to bring the Husqvarna brand into a stronger market positioning.
According to Roland Arrehn (personal communication, ,April 28, 2009) , in order to provide a reader with a proper understanding of the current brand position of the firm a brief description of Husqvarna company’s history is needed.
The history of this brand began in 1689 when the King of Sweden needed to create a factory that would design and build guns for the Swedish Military. This foundational innovation launched the development of the Husqvarna Company; where kitchen equipment, sewing machines, garden machinery and bicycles were engineered. A direct result of these innovations brought forth the production of Motorcycles to manufacturing of motorcycles which began in 1903. The motorcycles were primarily used for transportation, but in 1932 the company began to build larger and stronger motorcycles and Swedes began to race and compete throughout the country. 1932 was a foundational year for this company as the Swedish motorcycle racer Ragge Sunnqvist competed and won the Saxtorp Grand Prix racing competition. In 1933 Gunnar Kalen and Ragnar Sunnqvist competed in the European Grand Prix motorcycle competition and after winning the races they were recognized by 55 different countries and 150,000 spectators. Husqvarna marketing division was then created and thrived throughout the various racing campaigns show casing one of the world’s best motorcycles. In 1970 the world came into acquaintance with this firm based on the actor Steve McQueen. Steve McQueen honored the company by acting in a film entitled “On Any Sunday”; in this film Mr. McQueen traveled and raced with a Husqvarna Motorcycle which firmly brought this brand into the world’s eye and famous recognition.
The brand continued to thrive and grow around the world and in 1977 there was an acquisition by the company Electrolux. According to Arioli (personal communication, February, 23, 2009), Electrolux acquisition was a critical period in accordance to the brand identity as the company did not invest into the division of Husqvarna Motorcycles nor create any relevant dynamics in the marketing or relevant changes in the production of the motorcycles.
Starting from year 1986 Husqvarna Motorcycles were acquired by Italian company Cagiva AG. According to Mr. Arioli (personal communication, February, 25, 2009), during this time the company was very poorly managed. The owner attempted to manage 3 different motorcycle brands simultaneously, including two Italian motorcycle brands and Husqvarna. On most occasions the company was managed in a very strict hierarchical manner where the owner of the company made all of the decisions and the various managers of departments had to follow his rule whether it was a good or poor decision. Additionally, the owner went into negative financial results which led to a loss of capital and equity of the company and allowed for the invoices of the suppliers of the motorcycle parts to remain unpaid. A direct result of these unpaid bills allowed for a critical disturbance in the credibility of the company where customers were lost and trust was comprised. As a collective result the brand image had diminished and because of continuous poor finances the company faced bankruptcy and then sold the company to BMW.
Building Brand Equity at Husqvarna Motorcycle
Through this research and writing we have acquired four months of an in depth study in the primary subject area of brand management. Having the opportunity to visit the firm in Italy was an amazing experience inside the operations of one of the World’s greatest motorcycle companies, Husqvarna.
Through the various interviews and interactions with this culture of historians and motorcycle enthusiasts we have gained a broad knowledge of this industry. During our research and writing we have faced the many challenges and opportunities of working together as a group, which in turn has brought us together in a closer way and has given us a deeper understanding of the secrets to success in group dynamics.
We would like to offer a warm thank you to Erik Hunter our tutor for continuing to inspire us and keep our group engaged into this very important subject of brand management. A special thanks is offered to Mr Aioli and Mrs Radin for making this opportunity possible for us to write about this amazing company that has existed for over 100 years and continues to be recognized and have a strong presence in the market around the globe in 2009.
Purpose
The purpose of the thesis is to analyze the current challenges faced by Husqvarna Motorcycles in their brand building process, and to describe ways in which applying the brand equity principles will enable an increase of the value of their brand.
Husqvarna Background
In the complex world of organizations and companies where the competitive position plays an important role in successful achievements of the company, managers seek after building a sustainable competitive advantage. Building brand equity is an important focus for a large company’ improvement, since it raises interest of existing and new customers. The process of building brand equity takes time but through this process a company will have a stronger market position which creates brand value.
Method
In order to answer the purpose, the qualitative method with implementation of semi-structured interviews for collecting data was used. The data was interpreted and then structured and analyzed using theoretical framework.
Conclusions
During the research performed it was found out that the managers are facing several challenges in respect to building brand equity. Therefore, five components of building brand equity were implemented to draw the conclusions of how the managers could strengthen their brand.