Many motorcycle dealers are family businesses, and they are rather oriented to short-term sales and do not operate only on logic without an emotional stake. Harley-Davidson Japan (HDJ) set up an authorized dealership system made up only of dealers with no capital relationship and did not directly manage dealers. This paper examines the period from 1991 to 2008, when Toshifumi Okui was the CEO of HDJ, during which time HDJ maintained top market share among large motorcycle companies in Japan and was a successful example of distribution system integration for other motorcycle manufacturers. For the dealers to implement HDJ’s intentions, the formal side of HDJ’s distribution system integration focused on the institutionalization of a “no control sales zero policy” and a “multilayer human relationship building policy.” However, critical to these were informal handwritten letters from the top-level management and the “Tokyo Court.”
A strategy that uses the productive performance of a manufacturing site (or genba), noted as a strength of Japan’s manufacturing industry by Fujimoto (2003), might also be called a capability-based cost leadership strategy (CBCL strategy). In the 1990s, this strategy ceased to function due to environment changes, and the international competitiveness of Japan’s manufacturing industry declined. As a means of breaking through those circumstances, Fujimoto emphasized strengthening market performance and choosing a differentiation strategy for appealing to consumers based on high product quality. In the end, however, the performance of Japan’s manufacturing industry is restored after the environment changed to become favorable to a CBCL strategy such as rising labor costs in newly developing countries and a shift to a weaker yen. This suggests that many Japanese manufacturers could not shift to differentiation strategies based on enhanced competitiveness in the market, and CBCL strategies were left in place.