Group Presentation

Overview
• • • • Brief History of HD Where we are now New Vision and Mission External Analysis - Competitor Analysis - PESTLIED Analysis - Porter’s Five Forces • • • • Internal Analysis - Value Chain - Boston Matrix SWOT Analysis Conclusion Q&A

08/29/09

® Tony Gauvin, UMFK, 2005

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HISTORY
Foundation It all started in Milwaukee, Wisconsin in 1903 when William, Walter, and Arthur Davidson, along with William S. Harley, created the first Harley-Davidson in their family shed.

08/29/09

® Tony Gauvin, UMFK, 2005

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Continued…
1906, the Harley-Davidson Motor Company was incorporated. WWI & WWII spurred growth for the company due to the militaries demand for HD’s economical motorcycles. After WWII, the improved American economy, and higher demands for Harley-Davidson bikes encouraged the company to expand its efforts and purchase additional manufacturing capacity.

08/29/09

® Tony Gauvin, UMFK, 2005

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HD Today
• Manufactures heavyweight Custom & Touring Motorcycles • Owns Buell Motorcycle & Eagle-mark Financial. • Has over 1,500 dealers worldwide. • Foreign business is about 18% of Sales; R&D, 3.2%. • Has about 8,800 employees.

08/29/09

® Tony Gauvin, UMFK, 2005

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Existing Mission
“ We fulfill dreams thorough the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles, branded products and services in selected market segments ”

Proposed Vision
“ To be recognized as the best motorcycle company in the world ”

08/29/09

® Tony Gauvin, UMFK, 2005

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External Analysis
Competitor Analysis
Asia/ Pacific Market Share 25.8%

America Market Share 48.1%

Europe Market Share 8.1% Higher Price

08/29/09

® Tony Gauvin, UMFK, 2005

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American Market

Kawasaki, 7.50%

Others, 8.30%

Yam aha, 9.20% Suzuki, 12.70%

H arley D avids , on
48.10%

Honda, 14.30%

08/29/09

® Tony Gauvin, UMFK, 2005

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PESTLIED ANALYSIS
PESTLIDE ANALYSIS
Political Low taxation from U.S government could encourage Japanese & European competition within the US. Economic Global recession is effecting economies world wide therefore HD has to sustain its position in the market. Social More diverse lifestyles, Creating many Harley Clubs and academies around the globe like Rider’s Edge. Technological New materials and other technologies are giving potential for innovative / customized motorbikes.

08/29/09

® Tony Gauvin, UMFK, 2005

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Continued…
Legal Different taxation method in different countries especially southeast Asia where HD is facing legal issues due to excessive excise duty. International Volatile international market situation is restricting HD to capture new markets. Environmental Noise and some emissions standards of HD bike is not up to the level of some countries across the globe. Demographic Average purchaser of HD is mid forties married man with household incomes averaging $78600 while only 9% of consumers are women.

08/29/09

® Tony Gauvin, UMFK, 2005

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Porter’s 5 Forces

New Entrant
• High Entry Barrier •Economies of scale •High tech Involvement •Small scale Producers minimum threat

Internal Rivalry Power of Buyer
•Low power of customer as they are individual •Less no. of Dealers also rely on individual customers •Honda, Yamaha, Suzuki ( All Japanese) •Honda mainly competing in U.S •Strategic Alliance between Suzuki and Kawasaki

POWER OF SUPPLIER
•Out source Steel, Basic Electronics •Assembly within the Company •Ease of switching suppliers

Substitute Product
•Very few substitute as luxury bike. •Cars, scooter and sports car. •NO subs when looking for luxury bike.

08/29/09

® Tony Gauvin, UMFK, 2005

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Internal Analysis
Value Chain
VALUE CHAIN Firm Infrastructure Good Senior Management Has Transformed The Firm But It Remains Small Compared To Global Competitors. HRM Excellent But No Skills or Abilities Outside US. Procurement Very Good Relationship With Streamlined Supplier Base, and New Brazil Operations Can Reduce Cost Further.
Inbound Logistics Good Advance JIT Procedure Operations Excellent Highest Level Operations Outbound Logistics Very Good Because of Good Shipment Marketing & Sales Excellent Relations & Brand Strength Services Excellent In US But Weak Outside
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08/29/09

® Tony Gauvin, UMFK, 2005

Internal Analysis
BOSTON MATRIX

HD

08/29/09

® Tony Gauvin, UMFK, 2005

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SWOT ANALYSIS
Strengths • Financially sound position, net income in 2008 was $1357.4 m . • Only major manufacture in US but now set up a huge plant in Brazil. • Financial services purchased in 1995 ( Eagle Mark ). • Dealers in 67 countries. • Very strong brand image in the U.S as an American Icon. • Extremely loyal and valuable workforce in U.S strengthening the brand themselves. Weakness • Still small compared to the competition, limiting their ability to invest in new areas • Probably less efficient then their competitors as they own very few assets outside U.S. • Brand image is HD’s strength but is limited outside the U.S. • Customer loyalty outside US is low due to lack of after sale services. • No or very few Human resources outside the U.S in marketing and other fields.

08/29/09

® Tony Gauvin, UMFK, 2005

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Continued…
Opportunities • Asian economy is booming, China is the only place not effected by global recession. • Increasing demand for the bikes in US. • New dealers can be found in South East Asia and Middle East. • Interest rates are at historical lows. • Globalizations gives the opportunity to reduce cost and gives the potential to form useful relations with firms across the globe. • Alliances with Ford Motor Company or other automobile manufacturers are possible. Threats • The European Union’s motorcycles noise standards. • Risk of small custom bikes manufacturers joining the big companies. • Competitors are all from Japan & have more affordable and diversify range of bikes • Decreasing brand loyalty means the buying decisions are increasingly based on PRICE & PERFORMANCE. • Harleys average buying age is 42 years old and increasing.

08/29/09

® Tony Gauvin, UMFK, 2005

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Conclusion
• • • Increase diversity programming Explore opportunities for physical plant expansion into other geographic areas to increase labor pool Bring HD heritage to the rest of the world.

08/29/09

® Tony Gauvin, UMFK, 2005

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Questions

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08/29/09 ® Tony Gauvin, UMFK, 2005 18

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