Premium Essay

Harley-Davidson: Style and Strategy

In: Business and Management

Submitted By kimloanchau
Words 4257
Pages 18
Case Study 5
Kim Chau
California Southern University
MKT 86500
September 19, 2014
Dr. Hoon

Harley-Davidson: Style and Strategy Have Global Reach
Introduction
In the case of Harley-Davidson, Style and Strategy Have Global Reach, a question of survival in an economic storm is raised – given a new CEO and a revised vision, can Harley-Davidson weather trouble times (Schermerhorn, 2011). Historically, Harley-Davidson was founded by William S. Harley and Arthur Davidson in 1903. They built their first three motorcycles in a shed in Milwaukee. By 1909, they introduced their trademark bike. It had 2-cylinder, v-twin engine which was also the faster bike at the time coming in at 60mph. During World War I, almost half of all Harley-Davidson motorcycles produced are sold for use by the U.S. military. At War's end, it was estimated that the Army used some 20,000 motorcycles in their efforts, most of which were Harley-Davidsons. By 1920, Harley-Davidson is the largest motorcycle manufacturer in the world. New Harley-Davidson motorcycles can be purchased from over 2,000 dealers in 67 countries worldwide (Harley-Davidson Timeline, 2014). In 1969, American Machine and Foundry Co (AMF) merged with Harley. During the early 80’s recession, market shares started to decline, revenue was at an all-time low. According to Daniel Klein’s tariff policy analysis (Klein, D., 1984), in 1980 the company had record sales of $289 million and pretax earnings of $12.3 million, but in 1982 sales slumped to just over $200 million, causing substantial losses. In addition to the recession, the company suffered from poor quality and increased competition from Japanese manufacturers (Schermerhorn, 2011). Harley was in serious trouble with their product and their bottom line.
In efforts to turn around the company, thirteen Harley executives bought back the company in 1981. According to…...

Similar Documents

Premium Essay

Harley Davidson

...Low Like any automobiles, Harley-Davidson's industry requires large manufacturing facilities and equipments to enter. New Entrants would have to have a large amount of capital is start in this industry. Already established firms such as Harley-Davidson, Honda, Suzuki, Kawasaki, Yamaha, and Ducati have the advantage of brand recognition from all over the world. These companies also established customer loyalty, especially Harley-Davidson. This means that any new entrants trying to enter the industry have to spend tons of money in advertising and promotion to receive the same amount of brand recognition and customer loyalty that these powerhouse companies in this industry already have gained. With the lack of brand recognition and customer loyalty, retailers would be afraid to carry such product because of the risk it carries if it doesn't give you profit. Threat of Substitutes: Low Motorcycles are seen as leisure products and don't take much out of one's income. Some substitute items for a motorcycle is a motor scooter and dirt bikes. Customers will switch to the substitutes if price increases and purchasing a cheaper substitute will be the bette... Threat of New Entry: Low Requiring high capital investment to enter the business because of the scale economies in production, research, marketing and service of this industry is high. Brand Identification of Harley Davidson has been strongly established for...

Words: 2238 - Pages: 9

Premium Essay

Harley Davidson

...BUSINESS STRETEGY | HARLEY DAVIDSON | | SUBMITTED BY- MANISHA YADAV(IB/05/04) | | SUBMITTED TO-MR. AMIT SAREEN | 9/14/2013 | | Table of content Chapters | Page No | Introduction | | History | | Value | | Vision,Mission | | Product Extension | | Intensive Strategies | | Organizational Chart | | Management | | İnternal & External Forces | | Micheal Porter Analysis | | Market Share | | Human Resource | | Strategic mix | | Competitive Profile Mix | | Internal Analysis Factor Mix | | SWOT & SWOT Matrix | | BCG | | Conclusion | | Possible Strategies | | Introduction Harley-Davidson is an American motorcycle manufacturer with a rich history and cultural tradition. Founded in 1903 in Milwaukee, WI, Harley just celebrated its 100th anniversary with a series of events around the world that culminated in hundreds of thousands of motorcyclists rallying last summer on the shores of Lake Michigan. In 1929, there were 241 motorcycle manufacturers in the US. After the Depression, only two remained: Harley and Indian. By 1953, Indian went out of business, leaving Harley-Davidson as the only American motorcycle manufacturer. Financial difficulties in the 1970’s led to the parent company, AMF putting the motorcycle division up for sale. Without a buyer, a group of Harley managers bought out the company and rescued it with a business turnaround that included brand extensions into......

Words: 2820 - Pages: 12

Premium Essay

Harley Davidson

...Future Harley-Davidson Report MKTG 445 Dr. Mattson September 29, 2004 Jason Conlon Daniel Adkins Eric Huffman Kyle Hahn Table of Contents Introduction Page 3 Global Competition Page 3 New Competition Page 5 Competitive Remakes and Accessories Page 7 Motorcycle Buyers Page 9 Motorcycle Company Websites Page 11 Conclusion Page 13 Works Cited Page 14 Introduction Over the past few years, Harley Davidson has had to make numerous changes to remain competitive. The first thing we will take a look at is global competition. Harley Davidson’s increasing demand overseas has caused many changes over the past few years. The second thing we will take a look at is new competition. The demographics of the nation have been changing, due to the aging of the “baby boomers,” and Harley has to make changes in order to keep up with the competition of the market. New competition ranges for sport bikes to other competing cruiser models. The third thing we will look at is competitive remakes and accessories. The competition for Harley is on the rise due to the high interest in custom motorcycles and cheaper accessories. The fourth thing we will take a look at is motorcycle buyer’s demographics. The market is ever changing and it is important to look at how Harley is adapting to these changes. The final thing we will address is how......

Words: 3356 - Pages: 14

Free Essay

Harley Davidson

...Executive Summary Size Up Analysis Harley Davidson is a leader in the motorcycle manufacturing industry that mainly competes in the heavyweight class motorcycles. They compete mainly against Japanese manufacturers in the market. During the 1980s, the company came close to bankruptcy due to quality issues that accompanied its rapid production expansion. However, that incident compelled Harley Davidson to renew its focus on quality. Since then, Harley Davidson’s successful differentiation strategy focusing on quality, luxury and branding has been reflected on Harley Davidson’s financial highlights. Net income has more than doubled in a span of 5 years; net income increased to $213 million in 1998 from $104 million in 1994. Net working capital has also increased to $376 million in 1998 from $179 million in 1994. Harley Davidson’s share price has more than tripled during the same period as well, suggesting improved investor confidence. However, we should note that Harley Davidson has increased its financial leverage as displayed by the change in their debt to assets ratio. It was noted that Harley Davidson’s customers are willing to wait 2 years for its motorcycles. There seems to be unmet demand and that may have caused a focus on production to be ingrained into their culture. This is evident in their vision to dramatically increase production capacity demonstrated in their plan 2003. Harley Davidson’s products also have very long life cycles. The evolution of......

Words: 1920 - Pages: 8

Free Essay

Harley Davidson

...Stock Analysis Report: Harley Davidson [pic] Chad Combs Finance 824 6/1/2004 TABLE OF CONTENTS I. Summary of Recommendation – Page 1 II. Brief Company Overview – Pages 1-2 III. Economic Analysis – Pages 2-5 IV. Industry Analysis – Pages 5-6 V. Growth Drivers/Catalysts/Positive Issues – Pages 6-8 VI. Risks/Concerns – Pages 8-10 VII. Sources of Growth – Pages 10-15 VIII. Financials – Pages 15-19 IX. Valuation – Pages 19-21 X. Conclusion – Pages 22-23 Summary of Recommendation Recommendation: Market-weight Reasoning: Increasing Market Demand: The motorcycle market is growing both domestically and internationally. Harley is well poised to take advantage of international opportunities that may present themselves. Draining Affect of Excess Cash: Harley is cash rich firm with very little debt. However Harley has no idea what to do with their extra money. They need to find strategic measures to determine how to invest the cash for that it is obtaining a smaller rate of return (2%) compared to the ROE of its core business (29%). This excess cash is diluting the returns of the firm. Revenue Should Increase: Harley is committed to expanding and as long as the increases to production will give them overall increases...

Words: 6731 - Pages: 27

Premium Essay

Harley Davidson

...Despite their conception in 1903, Harley-Davidson and the motorcycle industry as a whole didn’t really take off until after the Second World War. Many people rode motorcycles during the war, with Harley-Davidson themselves supplying almost 90,000 motorcycles for the U.S. military during this time. Many veterans chose to purchase motorcycles upon returning home, as they enjoyed riding during the war and wanted to continue riding in their civilian life. This generation known as the "baby-boomers" quickly became the main target audience for many of Harley-Davidson’s marketing efforts. With sales increasing and the industry growing, many "motorcycle clubs" and "rallies" were introduced. Unfortunately, due to the lewd behavior displayed by most people associated with these clubs and rallies, bikers typically had an image of being disorderly and raucous. Harley-Davidson’s image itself took a big shot due to the Hells Angels. This was a motorcycle gang wishing to become notorious for "drug trafficking and other organized crime activities," who used only Harley-Davidson motorcycles. All of this combined to lead to a decline in demand and sales throughout the entire industry during the 1960’s. The industry was really helped out with the release of the Hollywood film Easy Rider in 1969. This film helped change the public’s perception of bikers and sparked an increase in motorcycle demand which has lasted to this day. The motorcycle industry offers products which can be viewed as......

Words: 1802 - Pages: 8

Premium Essay

Harley Davidson

...being muscle toned, risky, loud and obnoxious badass on a bike. This isn’t exactly what Harley-Davidson wanted to portray, but it’s what made them into the company they are today. Harley-Davidson was started by no other than William S. Harley and Arthur and Walter Davidson, a few friends fascinated by motors and bikes in a rural part of Milwaukee, Wisconsin. The first blueprint sketched by William S. Harley was in early 1901, but the first actual sale of a completed bike wasn’t till late 1906. With nothing more than a small machine shop, a handful of old motors, and a few bicycles the friends started on their road to fame and fortune. They wanted to manufacturer these modified bicycles to the public in hopes they would make money, the main driving force behind any entrepreneur back then and now. Beginning its journey through sales in World War I and II the Harley brand was thrust onto the scene of racing and leisure riding from veterans and active duty members to civilians and celebrities. Being one of the only manufacturers to survive not only the war, but also the Great Depression, Harley-Davidson had its fair share of ups and downs. The image of Harley started with the production of the “F-Head” motor, known as the workhorse of the Harley-Davidson Motorcycle, and has since been a leading innovator in the market of motorcycles today with more than 6 different engine types, 5 main body styles, and endless customizable options to choose from. Harley’s mission statement......

Words: 1291 - Pages: 6

Premium Essay

Harley Davidson

... Harley-Davidson’s strength of its founded brand image, along with its array of products, assists with its lead in the industry. Conversely, evolving emission standards for motorcycles in addition to new competition may have a negative affect on Harley Davidson’s growth. Harley Davidson’s initiatives of quality control and strategic, financial planning continue to bring success to the company through its many ventures. Harley-Davidson owns one of the strongest brands in the world, establishing iconic positioning, that help’s it magnetize and maintain a devoted customer base thus generating revenue. Harley-Davidson’s motorcycles are well known for their long-established style, effortless design, quality, and durability thus remaining strategic.     Through it strength of broad products and service portfolio Harley-Davidson continues to offer an array of products and services ranging from motorcycles to related parts and products, and also through its subsidiary HDMC (Harley-Davidson Motor Company that manufactures Touring, V-rods, Dyna, Softail, and Sporster motorcycles) and HDFS (Harley-Davidson Financial Services). HDMC models are notable for their engines, frames, and suspensions. HDFS (Harley-Davidson Financial Services) has a competitive edge that offers financial services for its products to retail and wholesale financial services for its products in the motorcycles business in the US and Canada regions. HDFS also provides wholesale financial......

Words: 269 - Pages: 2

Premium Essay

Harley Davidson

...Summary of Harley-Davidson case study Harley-Davidson is the first name that comes to our mind when the topic about motorbikes comes up. The rugged yet beautiful motorbike is a U.S. bound brand that inspires many to own its customized bike with the iconic engine (Kotler and Keller, 2012). Today, Harley-Davidson motorbikes are well known by all; bikers and non-bikers around the globe. The two big questions running through our minds would be how it is accepted globally and how their customers remain loyal. Well, the dealers of Harley-Davidson maintain close relationship with their customers via face-to-face communication and social media (Kotler and Keller, 2012). What helps Harley-Davidson to understand their customers need better is by conducting research to keep up with their customers changing expectations, which comes with the trend and their experiences. Greater brand loyalty and unique experiences is built when they know Harley-Davidson takes their opinion into account very seriously. Reflection of freedom, individualism, the ability to connect with their friends through the H.O.G program (Harley’s Owners Group) is what one would get when buying a Harley. This program allows the members to enjoy various benefits such as discounts, major rides, charity events, new model launches, fund raising, riders appreciation night and much more. Harley-Davidson feels that people development such as by providing training, sharing company values, philosophy, effective......

Words: 2574 - Pages: 11

Free Essay

Harley Davidson

...Porter’s Five Forces model and three generic strategies analysis. 2. Choose one of the businesses mentioned and explain why data, information, business intelligence, and knowledge are important to successfully running the business over the next few years. Be sure to list examples of the different types of data, information, business intelligence, and knowledge you might find in this company. 3. Review Bloomberg Businessweek’s most current top five under 25. Choose of the companies and perform a detailed analysis of the company using the strategies discussed in Chapter 5. Determine a few ways the company can improve its business by creating competitive advantages using the ideas and methods discussed throughout the chapter. 4. Explain the difference between efficiency and effectiveness metrics and why both are important in business. 5. Clearly identify the benefits and challenges of CRM and detail the five CRM success factors. 6. As a young Christian business person consulting to one of these start-ups, what ethical concerns does this case study raise for you when assessing it from a Christian worldview? Unit #3 Closing Case #2 - "Harley Davidson" - Assignment Questions 1. Define the systems organizations use to make decisions and gain competitive advantages. 2. Explain how Talon helps Harley-Davidson employees improve their decision-making capabilities. 3. Identify a few key metrics a Harley-Davidson marketing executive might want to......

Words: 2791 - Pages: 12

Premium Essay

Harley Davidson

...“Harley Davidson” Team #1: Tamala Hamilton Emmy C. Rodriguez Jason N. Cedillo Nov. 17, 2007 “Harley-Davidson” Harley-Davidson motorcycles have been around for over 100 years, and from what Harley has been able to accomplish throughout the years, I think it is safe to say that Harley-Davidson will be around for another 100 years. Since its first motorcycle built in 1903 by William Harley and the Davidson brothers, Harley-Davidson has been transformed into an American icon. Every customer feels like each Harley-Davidson bike is custom built to suit their individual taste and style like the loud roaring sound, unique powerful engine, and its rugged bad boy image. With all the personas and symbolic labels that Harley-Davidson possess, this little bad boy company manages to incorporate the concept of family first to its employees making it one of the best companies to work for. The road to success did not come easy for the Harley-Davidson company. The company had several ups and downs that nearly forced the company to shut its doors of operation permanently. With the many different CEO leaders came different leadership styles, each with its own distinctiveness that rescued the company to only bring it back down to near destruction. The Harley-Davidson company finally resurrected itself when a group of senior executives managed to borrow enough money to purchase a buyout of the company to take full control of Harley-Davidson and make the necessary......

Words: 3680 - Pages: 15

Premium Essay

Harley Davidson

...My presentation of the analysis of this case would be very specific and to the point. I would relate to certain broad strategy areas and describe them in enough depth to help understand the concept, without going into the complete details. Post analysis of the Harley Davidson turn-around, I see the activities and planning involved by the entire management team, to be somewhat as highlighted below. I would also link these aspects with an (I) Internal and (E) External stakeholder sign, for the purpose of understanding the relationships involved in this re-engineering process. Educate (I+E) -> Create Need (E) -> Supply (E) -> Post-Sales (I+E) -> Promote Loyalty(E) -> Best Practices (E) -> Educate (I+E) Harley Davidson's (HD) entire turnaround effort since 1981 can be bulleted within these critical areas of improvement. More specifically, we could categorize all these above initiatives and more, within three functional areas of priority. Create Demand, Produce Product & Provide Support. Create Demand- a. Branding (E)- The HD leadership embarked on a mission to re-brand their image, and successfully did so with their Ford Truck Initiative and the Diverse Customer Base product positioning. They appealed to a larger population base, than the company had ever done in its history. b. Customer Loyalty (E)- HD had a strong customer base, but with a rapidly ageing customer population the company took some initiatives in developing customer loyalty- to further their......

Words: 793 - Pages: 4

Premium Essay

Harley Davidson

...1. How does Harley-Davidsonbuild long term customer relationship? As a company who sold more than 900,000 units of motorcycle, Harley Davidson must be made a very good relationship with its customers, especially the long-term customers. We all know that Harley-Davidson users are not only men, but also women. Even in some products, they make teenagers ride them too. So that, the company needs to keep their relationship in the right ways. In a case, Harley-Davidson Company builds a good relationship to the customers by shortening the distance between the company and its customers. They make a community in every genre or style, by website especially. For example in an area or in young executive forum, and also Harley-Davidson make the community for the female users. Those people often make a touring event with all the community members. Harley-Davidson also make a gathering event to celebrate the Harley-Davidson anniversary in every single year until now. The informations are available in the website. Included the gathering date for the communities and events that will be held by Harley-Davidson Company. Usually, the communities had been included in a group that facilitated by the company, it called Harley-Davidson Owner Group (H.O.G). Everyone who joins in this group can get a lot of benefit. There, they can share every experience they got when ride the motorcycles. In the other side, the company can reach the advantages too. They give the members the information......

Words: 886 - Pages: 4

Premium Essay

Harley Davidson

...In 1996, Harley-Davidson began the development of a corporate Supply Management Strategy (SMS) intended to move the company from a site-specific, transactional mentality to a long-term focus on supplier relationships. By July 1997, the initial planning meeting was held for an integrated procurement system, the supplier information link (SiL’K). Harley-Davidson followed a very thorough and rigorous process in implementing SiL’K to allow the organization time to become comfortable with this new philosophy and to ensure engagement and enthusiasm for SMS. By November 1997, momentum had built to the point that procurement managers were will to provide several part-time resources to the SiL’K project team. Their goal was to move the project from strategy to action. The next four months were spent mapping existing procurement processes to find commonalities across business units. Starting in April 1998, a reduced core team consisting of a smaller number of full-time resources started developing the desired future state (“to-be” processes). This team also began work on the detailed specifications and actively managed expectations through frequent communications with the stakeholders. By the end of September 1998, the team had completed a functional specification for the SiL’K system and distributed an RFQ to key stakeholders for review. The team’s shared vision of new processes and activities simplified the task of completing a jointly written RFQ. Internal acceptance......

Words: 1223 - Pages: 5

Premium Essay

Harley Davidson Traditional Targeting and Positioning Strategy

...Harley Davidson's Traditional Targeting and Positioning Strategy I am a motorcycle enthusiast who has been riding since 1997. I’ve always enjoyed my passion for the open road and the feeling of being free. This Harley-Davidson motorcycle provides me with a euphoric experience of “the wind is beneath my wings”. I like enjoy the fundamental aspects of riding quickly but safely. I get consumed in it because you can lose track of time and ride all day and night. The best part about it is, there doesn’t have to be a defined end destination, you can just get on it and go. You have the capability to travel where most cars can’t because of its maneuverability. Harley Davidson’s motorcycles are classic custom bikes that provide the comforts of cruising, sporting, or rugged cycling. This case will briefly describe Harley Davidson's traditional targeting and positioning strategy to attract women customers. Harley-Davidson and motorcycles are usually considered a masculine sport intended for men (Mitchel). However, there are women out there who enjoy the freedom of riding their own Harley. Harley Davidson is fully committed to fostering and growing the women motorcyclist market. Women today represent a large sector of the workforce, enjoy higher incomes than 20 years ago, and possess more disposable income. Furthermore, women are much more empowered than ever before and are encouraged to exercise their freedom of expression and individualism. To fill their psychological needs...

Words: 2081 - Pages: 9