STRATEGIC MANAGEMENT

CASE ANALYSIS

CASE:

HARLEY DAVIDSON, Inc. -2004

By
RICHARD.A.COX
FRANCIS MARION UNIVERSITY

Analyzes by,
HARI PRAKASH.N.V

Harley Davidson, Inc

Mission Statement says:
We

fulfill dreams through the experiences of motorcycling, by

providing to motorcyclists and to the general public an expanding line

of motorcycles, branded products and services in selected market
segments

Vision Statement says:

Harley-Davidson is an action-oriented, international company, a
leader in its commitment to continuously improve [its] mutually
beneficial

relationships

with

stakeholders

(customers,

suppliers,

employees, shareholders, Government, and society). Harley-Davidson

believes the key to success is to balance stakeholders interests
through the empowerment of all employees to focus on value-added
activities.

MISSION statement analysis

COMPONENTS

YES / NO

CUSTOMERS
PRODUCTS & SERVICES
MARKETS
CONCERN FOR SURVIVAL
TECHNOLOGY
PHILOSOPHY
SELF CONCEPT
CONCERN FOR PUBLIC IMAGE
CONCERN FOR EMPLOYEES

YES
YES
NO
YES
NO
YES
YES
YES
NO

MISSION STATEMENT EVALUATION MATRIX

PROPOSED MISSION STATEMENT:

We fulfill dreams through the experiences of motorcycling, by
providing to motorcyclists and to the general public an expanding line
of motorcycles, branded products and services in selected market
segments. To be branded as the best motorcycle available in the world
through

innovations.

The

total

team

effort

of

Harley-Davidson

employees is devoted to fulfilling dreams of customers and we believe

that there is not a motorcycle riding experience like a HarleyDavidsons

PROPOSED VISION STATEMENT:

The best quality motorcycle, motorcycle products and financial
services will be provided world wide is the commitment of HarleyDavidson. Customer satisfaction is our motto and the Harley-Davidson
customers can experience the taste of reality of motorcycle dreams by
relaying their satisfaction on us. Harley-Davidson is dedicated to use
the advanced technology to produce the most superior motorcycle in
domestic and international markets. Stay competitive and continue
growth worldwide remain profitable and survive is our philosophy.
Employees of Harley-Davidson are the foundation of the company and
they are the driving force behind the Harley-Davidson name. The total
team effort of Harley-Davidson employees is devoted to fulfilling
dreams of customers and we believe that there is not a motorcycle
riding experience like a Harley-Davidsons. Excellence is our push
though our Harley-Davidson bar and shield logo that says superior
quality. Honesty and customer loyalty and these morals are the
heartbeat of Harley-Davidson organization. Harley-Davidson do our
part in supporting all environmental laws in every country we do
business. Determination and commitment is the place where HarleyDavidson intends to stay.

EXTERNAL ANALYSIS

PESTLE
POLITICAL

U.S Government and People are considering Harley-Davidson as

an American icon.

Opportunities in emerging economies [India, China] but uncertain

operating situations. The governments are not deducting the
taxes and levies, they consider Harley-Davidson as an American
idol so that they are not welcoming Harley-Davidson into their
soil. More and more talks are required for this sanction, even
between the nations.

ECONOMICAL

Confidence in economy is directly proportional to the purchasing

of consumer items.

The economic crisis will hit this segment very much.

Currency fluctuation is also a big problem in this industry.

SOCIAL

Academy of Motorcycling for those interested in learning to ride a

motorcycle. In U.S the number of motorcycle users is less so that
by introducing this type of academy will encourage more and
more public to come to motorcycling. This shows their social
responsibility by teaching and educating the public how to ride
bikes responsibly. Riders-Edge the motorcycling academy of
Harley-Davidson

introduced

more

than

1000

aspiring

motorcyclists to the sport in 2000. Number of accidental death in

U.S is increasing so that this shows their social responsibility.

Average purchaser of a U.S Harley-Davidson motorcycle is a

married male in his mid-forties.

Average purchasers of a U.S Harley-Davidson have a household

income of $78,600.

Over two thirds of the sales of Harley-Davidson motorcycles are

to buyers with at least one year of education beyond high school.

30% of the Harley-Davidson buyers have college degrees. The

customers of Harley-Davidson motorcycles are creditworthy
persons who are well educated and having a social responsible
life.

Only about 9% of Harley-Davidson U.S retail motorcycles are to

women, this shows not only men but also women are interested
in Harley-Davidson.

TECHNOLOGICAL

This segment needs more and more technological advancements

because customers are going for more and more energy efficient
and technologically advanced bikes now a day.

Harley-Davidson is one of the main manufacturer and user of VENGINE configuration.

Harley-Davidsons have a wide variety of products according to

Standard, Performance, Touring & custom.

ENVIRONMENTAL

This industry is the first attacked by environmental activists, the

environmental laws varies from country to country. In Europe its
Euro, in India its BS.

Harley-Davidsons one of the main problem is this environmental

problems.

LEGAL

A new assembly facility opens in Manaus, Brazil, the first

operations outside of the U.S, reduces taxes, make them more
affordable to a larger group of Brazilian customers.

Harley-Davidson

is

facing

some

legal

problems

in

Asian

countries, in India there is 60% tariff and various other taxes will
cause the price of the bike to double.

Noise pollution and some emission standards of Harley-Davidson

bike is not up to the level of some countries across the globe.

Five Forces
Internal Rivalry: [High]

Four major competitors are mainly concentrated on these

heavyweight motorcycle segments: in addition to HarleyDavidson the other three are Yamaha, Suzuki, Honda all are
Japanese companies.

Some of the major competitors of Harley-Davidson have larger

financial and marketing resources and are more diversified
(Example:

Yamaha,

half

of

its

revenue

is

only

from

motorcycles).

Polaris (American snowmobile/ATV manufacturer) producer of

Victory motorcycles priced its motorcycles below the HarleyDavidson motorcycles.

Strategic alliance between Suzuki and Kawazaki in the areas

of

product

development,

design,

engineering,

and

manufacturing of motorcycles, this alliance strengthened both

companies global motorcycle businesses.

Honda, the main competitor of Harley-Davidson in U.S eats up

some market share of Harley-Davidson.

 Potential entrants: [Medium]

Entry barrier is very high is this segment, because this

segment needs a lot of capital investment and the industry is
on a maturity stage, so that there is only four main
competitors.

The economies of scale are low in this segment, which is the

reason why there are only four major players.

Train and installing machinery for this type of heavy weight

segment is highly capital required.

There is some small scale producers, who are making these

custom made motor cycles but the amount of their production
is not at all a threat for Harley-Davidson, and they are
increasing the interest of motorcycles among the general
public.

Substitute products: [Medium]

Harley-Davidson motorcycles are a luxury vehicle, so that

there is only a few close substitutes for heavy weight
motorcycles that could seriously affect the market.

Passenger cars, sports bikes, scooter bikes are the main

substitutes of Harley-Davidson motorcycles. Even cycle is a
substitute for this industry. Most of the buyers of this heavy
weight motorcycle are travelers, so even rail and airways can
be substitute for this product.

The people who are thinking of buying a heavy weight

motorcycle are not seriously considering one of these options,
scooter, and sports bike.

In India Enfield can pose as a small substitute.

Bargaining Power of suppliers: [Low]

Steel, basic electrical equipments and shipping of final

motorcycles are the main things Harley-Davidson seeks from

suppliers. For these items the number of suppliers is also high

so the bargaining power is low.

Harley-Davidson has a wide span of suppliers, so that if one

supplier attempted to increase the price, they can easily
switch to the alternate suppliers without any problem in
production.

Bargaining Power of Customers: [Medium]

Consumers of Harley-Davidson motorcycles are individual

customers, so that they cant seriously affect Harleys
financial position.

The numbers of dealers around the globe are also less and
they are also dependent to the individual customers, that
cant affect Harley-Davidsons financial position.

OPPORTUNITIES
The European demand for Harley Davidson is the highest in the
international market and represents the single largest motorcycle
market in the world. Harley-Davidson can exploit this situation by
introducing more products into European soil (Harley-Davidson
and Buell products).
Women and younger riders are increasingly becoming interested
in bikes. The major buyer of Harley-Davidson for now are male in
their mid forties, so by getting more women and young riders will
make Harley-Davidson flourish its revenues.
The international heavy weight market is growing and is now
larger than the U. S. heavyweight market. Harley-Davidson is
now concentrated on U.S market but the global market is
growing and Harley-Davidson can exploit this by going into more
and more global markets like Asian and European countries.
Market share increasing in Europe and Asia for the last two years.
Increase Harley-Davidsons presence there will increase its
revenue. Making use of their Buell division they can get into joint
venture with Asian and European vehicle manufacturers. Even if
they cant introduce their heavy weight models in India they can
introduce their Buell small and sports bikes in India with these
types of joint ventures.
Increasing demand in US markets for bikes. 92% of its
motorcycle customers intend to repurchase.
Customers value quality parts. Harley-Davidson have a good
brand value among its customers and in U.S people, so they can
exploit this situation, by teaching and educating the customers
what is considered as a quality product and what are the things
they are using for manufacturing their bikes. This will increase
the customer loyalty to this brand and this will help in a market
penetration.

THREAT
Harleys ongoing capacity restraints caused a shortage supply
and a loss in domestic market share in recent years.
High rise in the Oil prices. Harley-Davidson vehicles are heavy
weight motorcycles and this is one of the major threats they are
facing, because their vehicles are more oil consuming.
Harleys average buying age is 42 years old and increasing.
The European Unions motorcycles noise standards are more
stringent than those of Environmental Protection Agencies in the
U.S and increased environmental stand
Some competitors of Harley Davidson have larger financial and
marketing resources and they are more diversified
Environmental protection laws
Buell division needs to continue to produce a quality motorcycle
under Harleys brand name.

EFE MATRIX

Key external factors

OPPORTUNITIES

Weighted
score

Weight

Rating

0.15

0.6

0.15

0.6

0.1

0.3

0.1

0.3

0.1

0.2

0.025

0.025

0.15

0.3

0.14

0.28

Harleys average buying age is 42 years old and

increasing

0.1

0.2

The
European
Unions
motorcycles
noise
standards are more
stringent than those of
Environmental Protection Agencies in the U.S and
increased environmental stand

0.025

0.05

0.025

0.05

0.025

0.05

0.05
1.14

0.15
3.105

The European demand for Harley Davidson is the

highest in the international market and
represents the single largest motorcycle market
in the world
The international heavy weight market is growing
and is now larger than the U. S. heavyweight
market
Women and younger riders are increasing
becoming interested in bikes
Market share increasing in Europe & Asia for last
2 yrs
Increasing demand in US markets for bikes, 92%
of its motorcycle customers intend to repurchase
Customers value quality parts
THREAT

Harleys ongoing capacity restraints caused a

shortage supply and a loss in domestic market
share in recent yrs
High rise in the Oil prices

Some competitors of Harley Davidson have larger

financial and marketing resources and they are
more diversified
Environmental protection laws
Buell division needs to continue to produce a
quality motorcycle under Harleys brand name
TOTAL

Competitive Profile Matrix

CPM
CRITICAL SUCCESS
FACTORS

HARLEY
Weight

Rating

Weighted
Score

HONDA
Rating

Weighted
Score

YAMAHA
Rating

Weighted
Score

Advertising

0.15

0.6

0.45

0.6

Product Quality

0.15

0.6

0.45

0.45

Price
Competitiveness

0.1

0.1

0.3

0.3

Management
Financial
Position
Customer
Loyalty
Global
Expansion

0.025

0.075

0.1

0.05

0.1

0.2

0.4

0.3

0.15

0.6

0.45

0.45

0.025

0.05

0.1

0.075

Market Share

0.3

0.6

1.2

0.9

TOTAL

2.83

3.45

3.13

INTERNAL ANALYSIS
FINANCIAL RATIOS
LIQUIDITY RATIOS
Current Ratio = Current Assets / Current Liabilities
= 2729/956
= 2.85
Quick Ratio = (Current Assets Inventory) / Current Liabilities
= (2729-208)/956
= 2521/956 = 2.63
LEVERAGE RATIOS
Debt to Total Assets Ratio = Total Debt / Total Assets
=994/4923
=0.20
Debt to Equity Ratio = Total debt / Total stock holders equity
=994/2958

=0.34

Long Term Debt Equity Ratio = Long term Debt / Total stock holders
equity
=670/2958
= 0.23
Times Interest Earned Ratio = Profits before interests and taxes /
Total Interest charges
=1149/0
ACTIVITY RATIOS

Inventory Turnover = Sales / Inventory of finished goods

=4624/208
=22.23
Fixed Assets Turnover = Sales / Fixed Assets
=4624/2194
=2.10
Total Assets Turnover = Sales / Total Assets
=4624/4923

=0.93

Accounts Receivables Turnover = Annual Credit Sales / Accounts

receivable
=4624/1114
=4.15
Average Collection Period = Accounts Receivables / (Total credit
sales/365)
=1114/(4624/365)
=1114/12.66
=87.99
PROFITABILITY RATIOS
Gross Profit Margin = (Sales COGS) / Sales
=(4624-3070)/4624
=1554/4624=0.34
Operating Profit Margin = EBIT / Sales
=1149/4624
=0.25
Net Profit Margin = Net Income / Sales
=761/4624

= 0.16
Return on Total Assets (ROA) = Net Income / Total Assets
= 761 / 4923
= 0.15
Return on Equity (ROE)

= Net income / Total Stock holders equity

= 761 / 2958
= 0.26
Earnings Per share (EPS)

= Net income / Total stock holders

equity

= 761 / 302
= 2.519

Price Earning ratio

=Market price per share/Earning

per share
=39.11/2.519
=15.526
Growth ratio
Sales

=Annual % growth in total sales

= (4624-4091)*100/4091=13.029

Net income

=Annual % growth in profits

=(760-580)*100/580=31.034

Financial strength of the company is good, but there is a

decline in the sales in 2003 as compared to the previous year
2002. Net income has increased.

FINANCIAL ANALYSIS

2003

2002

2001

LIQUIDITY RATIOS
Current Ratio
Quick Ratio
The current ratio is high, its bad for the company

2.86
2.64

2.09
1.87

2.33
2.07

0.20
0.34
0.23

0.20
0.34
0.17

0.19
0.34
0.22

LEVERAGE RATIO
Debt to Total Assets
Debt Equity ratio
Long term DE ratio

Less Debt, good. What percentage of total funds is provided by creditors? Although creditors
tend to prefer a lower ratio, management may prefer to lever operations, producing a higher
ratio. A low ratio, on the other hand, indicates a wider safety cushion (i.e., creditors feel the
owner's funds can help absorb possible losses of income and capital).

ACTIVITY RATIO
Inventory Turnover
18.79
19.72
Fixed Asset Turnover
1.78
2.40
Total Asset Turnover
0.79
1.11
Its almost flat over the period, but the turnover ratio is declining thats not good for a
company.

19.81
2.47
1.15

PROFITABILITY RATIO
Gross Profit margin
0.21
0.35
0.34
Operating profit margin
0.29
0.21
0.18
Net Profit Margin
0.19
0.13
0.12
ROA
0.15
0.15
0.14
ROE
0.26
0.26
0.25
EPS
2.52
1.92
1.45
Gross profit margin is declining thats not good for the company, but net profit is increasing.
Return.

GROWTH RATIO
Sales
-9.27
19.90
Net Income
31.14
32.56
EPS
31.16
32.62
The sales has been declined in a huge percentage as compared to the previous year (2002).
The other two are almost steady.

YEAR BY YEAR FINANCIAL ANALYSIS OF Harley-Davidson

STRENGTHS
Net income of 2003 was $760mn; its more than 30% as
compared to the previous year 2002.
The standard and performance segments of Harley Davidson
make up 70% of the European heavy weight motorcycle market
Harley-Davidson operates in two segments: Harley-Davidson
motorcycles & related products and HDFS (Harley-Davidson
Financial Services).
Harley-Davidson is the only major American heavyweight
motorcycle manufacturer.
Strong brand name, one of the main things which are required
for all companies in this industry.
The HOG (Harley Owners Group), which have a 7, 50,000
members world wide, is the industrys largest company
sponsored motorcycle enthusiast organization.
Buell Riders Adventure Group (BRAG) was also formed recent
Customization of the bikes, this is Harley-Davidsons major
revenue maker.
Harley-Davidson has a good marketing division and its divided
as dealer promotions, customer events, magazine and directmail advertising, and public relations.
WEAKNESS

 High price, Harley-Davidson bikes are the costly bikes in this

category. They just started making some bikes in the low cost
category.
Harley-Davidson has problems in gaining more market share in
some European countries (Thats one of the main markets for
Heavyweight motorcycles outside U.S).
They didnt yet start its sales in India, one of the biggest
markets.
Required production is not met, analyzing the future of
Heavyweight motorcycle market
IFE MATRIX
WEIGHT

RATING

WEIGHTED
SCORE

0.15

0.45

0.09

0.27

0.025

0.1

0.1

0.4

0.15

0.6

The HOG (Harley Owners Group), which

have a 7,50,000 members world wide is
the industrys largest company sponsored
motorcycle enthusiast organization

0.05

0.2

Buell Riders Adventure Group (BRAG) was

also formed recent

0.025

0.1

Customization of the bikes, this is HarleyDavidsons major revenue maker

0.025

0.1

KEY EXTERNAL FACTORS

STRENGTHS

Net income of 2003 was $760mn, its more

than 30% as compared to the previous
year 2002
The standard and performance segments
of Harley Davidson make up 70% of the
European heavy weight motorcycle market
Harley-Davidson operates in two segments:
Harley-Davidson motorcycles & related
products and HDFS (Harley-Davidson
Financial Services)
Harley-Davidson is the only major
American heavyweight motorcycle
manufacturer
Strong brand name

Harley-Davidson have a good marketing

division and its divided as dealer
promotions, customer events, magazine
and direct-mail advertising, and public
relations

0.025

0.1

High price

0.15

0.3

Harley-Davidson has problems in gaining

more market share in some European
countries (Thats one of the main markets
for Heavyweight motorcycles outside U.S).

0.06

0.06

0.1

0.1

0.05
1

0.05
2.83

WEAKNESS

They didnt yet start its sales in India, one

of the biggest markets
Required production is not met, analyzing
the future of Heavyweight motorcycle
market
TOTAL

SWOT matrix

Opportunity

Strength

SO Strategy:

Threat
ST Strategy

SALE OF HARLEY DAVIDSON IN

EUROPEAN MARKET IS OF 70% AND
THEY CAN IMPROVE THIS BY
INTRODUCING MORE PRODUCTS INTO
THE MARKET AND THROUGH ADVT AND
ALL. BECAUSE THIS MARKET IS
GROWING HIGHLY.
EXPAND PRODUCTION TO EUROPE

INCREASE STRONG BRAND NAME

EXPAND PRODUCTION TO ASIA

INCREASE MARKET TO YOUNGER

CUSTOMER

HARLEY DAVIDSON CAN MAKE USE OF

ITS GOOD BRAND NAME, BECAUSE NOW
A DAY PEOPLE ARE MORE
CONCENTRATING ON QUALITY
PRODUCTS

Weakness

WO Strategy

WT Strategy

IMPROVE EMPLOYEE RELATIONSHIP

GRAND STRATEGY MATRIX

Buell Motorcycles a division of Harley-Davidson. This was purchased
by Harley-Davidson; this division still uses Harley-Davidson to
improve its sales.

STRATEGY: MARKET DEVELOPMENT, MARKET PENETRATION,

PRODUCT DEVELOPMENT, HORIZONTAL INTEGRATION,
DIVESTITURE, LIQUIDATION.

SPACE Matrix
Environmental
2
3
4
2

(ES)
Technological changes
Rate of Inflation
Demand variability
Price range of competing

products
Barriers

Financial Strength (FS)

Return on Investment
Leverage
Liquidity

Stability

Working Capital

to

entry

Price Earnings Ratio

Total

24
-1
-1
-3
-1
-4
-1

Industry Strength (IS)

Growth potential
Financial stability
Technological know how
Resource utilization
Ease of entry into market
Productivity,
capacity

Earnings per Share

Competitive Advantage (CA)

Market share
Product quality
Product life cycle
Customer Loyalty
Competition's capacity utilization

utilization

Technological know-how
Control over suppliers & distributors

-2

Total

-13

Total

-6

into

market
Competitive pressure
Ease of exit from market
Price elasticity of demand
Risk involved in business
Total

Inventory Turnover

-3

-2

3
3
2

Cash Flow

-2

-6
-4
-3
-2
-2
-30
3
3
5
4
6
4
25

Average value for FS = 3

Average value for CA = -1.85
Average value for IS = 4.17
Average value for ES = -3.33
Point on X axis = (-1.85+4.17)/2 = 1.16
Point on Y axis = (3-3.33)/2 = -0.165
Strategies:

STRATEGY: BACKWARD INTEGRATION, FORWARD

INTEGRATION, HORIZONTAL INTEGRATION, MARKET
PENETRATION, MARKET DEVELOPMENT, PRODUCT
DEVELOPMENT.

I.E MATRIX
Harley-Davidson U.S MARKET SHARE: 49%
Harley-Davidson EUROPEAN MARKET SHARE: 07%
Harley-Davidson ASIAN MARKET SHARE: 22%

STRATEGY: BACKWARD INTEGRATION, FORWARD

INTEGRATION, HORIZONTAL INTEGRATION, MARKET
PENETRATION, MARKET DEVELOPMENT, PRODUCT
DEVELOPMENT

BCG MATRIX
Harley-Davidson RELATIVE MARKET SHARE: 48%
GROWTH RATE:

13.029

STRATEGY: MARKET PENETRATION, MARKET DEVELOPMENT,

PRODUCT DEVELOPMENT, DIVESTITURE.

QSPM
STRENGTH

Net income of 2003 was $760mn, its more than 30%

as compared to the previous year 2002

WEIGHT

J.V EUROPE
AS
TAS

J.V ASIA
AS
TAS

0.075

0.225

0.225

0.045

0.135

0.09

0.0125

0.05

0.0375

0.05

0.2

0.2

0.075

0.3

0.15

0.025

0.05

0.075

0.0125

0.025

0.05

0.0125

0.0375

0.0375

0.0125

0.025

0.025
0

0.075

0.15

0.15

Harley-Davidson has problems in gaining market

share in some European countries (one of the main
markets for Heavyweight motorcycles outside U.S).

0.03

0.09

0.09

They didnt yet start its sales in India, one of the

biggest markets

0.05

0.15

0.15

0.025

0.1

0.1
0

0.075

0.3

0.15

The standard and performance segments of Harley

Davidson make up 70% of the European heavy
weight motorcycle market
Harley-Davidson operates in two segments: HarleyDavidson motorcycles & related products and HDFS
(Harley-Davidson Financial Services)
Harley-Davidson is the only major American
heavyweight motorcycle manufacturer
Strong brand name
The HOG (Harley Owners Group), which have a
7,50,000 members world wide is the industrys
largest company sponsored motorcycle enthusiast
organization
Buell Riders Adventure Group (BRAG) was also
formed recent
Customization of the bikes, this is Harley-Davidsons
major revenue maker
Harley-Davidson have a good marketing division and
its divided as dealer promotions, customer events,
magazine and direct-mail advertising, and public
relations
WEAKNESS

High price

Required production is not met, analyzing the future

of Heavyweight motorcycle market
OPPORTUNITIES

The European demand for Harley Davidson is the

highest in the international market and represents
the single largest motorcycle market in the world

The international heavy weight market is growing

and is now larger than the U. S. heavyweight market
Women and younger riders are increasing becoming
interested in bikes
Market share increasing in Europe and Asia for the
last two years
Increasing demand in US markets for bikes
Customers value quality parts

0.075

0.3

0.225

0.05

0.15

0.2

0.025

0.075

0.1

0.1

0.2

0.3

0.0125

0.0125

0.025

0.075

0.3

0.225

0.025

0.075

0.05

0.0125

0.0375

0.025

0.0125

0.025

0.0375

0.0125

0.05

0.025

0.025
1

0.025
3.0875

0.05
2.7925

THREAT

Harleys ongoing capacity restraints caused a

shortage supply and a loss in domestic market share
in recent years
Harleys average buying age is 42 years old and
increasing
The European Unions motorcycles noise standards
are more
stringent than those of Environmental
Protection Agencies in the U.S and increased
environmental stand
Some competitors of Harley Davidson have larger
financial and marketing resources and they are more
diversified
Environmental protection laws
Buell division needs to continue to produce a quality
motorcycle under Harleys brand name

STRATEGY RECOMMENDATION & IMPLEMENTATION:

MARKET PENETRATION
Get some more market share from the existing market, like U.S,
U.K, and Japan etc through more marketing techniques like
advertising. Harley-Davidson has a good brand name so its easy
for them to eat up the competitor market share if they can
provide some more customer benefit.
Competition is high in this segment mostly in U.S so market
penetration can be a good choice for the company.
Expand the HOG (Harley Owners Group) to Asian countries, if the
company can provide the customer satisfaction that they are
providing to the U.S customers to the Asian customers they can
increase the sales.
PRODUCT DEVELOPMENT
Younger generation and female are now coming to this segment
so expand the motor cycle segments to younger generation and
females.
In Europe they can increase or expand the Buells market share
by introducing new motorcycles.
New hybrid bikes, low cost street bikes, Energy efficient bikes for
the developing countries and new environmental friendly bikes
will help Harley-Davidson to get more market share.

MARKET DEVELOPMENT
Harley-Davidson can bring in their vehicle to Asian countries like
India and China, because these countries have a high population
and the market potential is also high.
The cost to bring in the old vehicles (old product) to India is so
much difficult because there are so much environmental laws are
there which wont allow that type of vehicles to come to India,
and its difficult that taxes and levis are high in India so starting
new plant in India can solve this problem. Negotiations with the
Government can solve these problems.
DIVERSIFICATION
Bring in new vehicles to new markets like India and China is a
good choice, but its too costly.
Bringing new types of recreational vehicles is a best choice.
RECOMMENDATION
Expand European and Asian market.
Increase the sales of Buell sport bike and Harley-Davidson to
younger customers and females.
Horizontal diversification: acquires or develops new products that
could appeal to its current customer groups even though those
new products may be technologically unrelated to the existing
product lines.
Concentric diversification: Bring in new recreational vehicles.
EVALUATION
REVIEW UNDERLYING BASES OF STRATEGY
Once again prepare all the internal and external analysis (eg: EFE
& IFE)
Compare the already prepared analysis with the one which will
be prepared after the new strategy implementation.
MEASURING ORGANIZATION PREFERENCES
Analyze all financial ratios (current and the future).

 If any advantage, then implement the new strategy, otherwise

continue with the present one.

Reference:
Strategic Management Concepts and Cases; Fred R. David, 10th & 12th Edition.
www.wikianswers.com
www.yahoo.com (yahoo finance)
www.harley-davidson.com
www.google.com
http://www.fool.com/investing/value/2006/08/02/calculating-return-onassets.aspx
http://www.va-interactive.com/inbusiness/editorial/finance/ibt/ratio_analysis.html