HARLEY

DAVIDSON

Submitted by-
Abhishek Pathak
Faraz Khan
Pratibha Yadav
Rahul Pandey
Sandeep Yadav
Shubham Sharma
•Type Public-1984, NYSE-1987

•Founded 1903

•Founder William S. Harley

Arthur Davidson
Walter Davidson
William A. Davidson
•Headquarters Milwaukee, Wisconsin, USA
•Key People Keith E Wandel (CEO)
•Revenue 5.59 Billion USD (2009)
•Employees 9,700 (2006)
•Subsidiary Buell, M.V. Augsta
•Website www.harley-davidson.com
1958
The first rear brakes and hydraulic rear suspensions appear on the Duo-Glide.

 1981
On February 26, thirteen Harley-Davidson senior executives sign a letter of intent to
purchase Harley-Davidson Motor Company from AMF. By mid-June, the buyback is official,
and the phrase "The Eagle Soars Alone" becomes a rallying cry.

1988
The Harley-Davidson Traveling Museum hits the road, displaying memorabilia, classic
Harley-Davidson motorcycles and the rich history of the Harley-Davidson rider

1991
Installation of a $31 million state of the art paint facility begins at the York, PA, factory. It
becomes fully operational in 1992.
The Dyna line of motorcycles debuts with the 1991 FXDB Dyna Glide Sturgis®.
•In 2000,Buell introduces the Blast®, a single-cylinder motorcycle, for the 2000
model year. The Blast receives excellent reviews. It's introduced in tandem with the
Rider's Edge® Academy of Motorcycling, a beginner's rider course available through
Harley-Davidson and Buell dealerships.
•The VRSCA V-Rod® is introduced for the 2002 model year. Inspired by the VR-1000
racing motorcycle, the V-Rod is Harley-Davidson's first motorcycle to combine fuel
injection, overhead cams and liquid cooling, and delivers 115 horsepower.
•In 2003, more than 250,000 people come to Milwaukee for the final stop of the
Open Road Tour and the Harley-Davidson 100th Anniversary Celebration and Party.

•In 2004,Harley-Davidson,s touring and custom motorcycles were grouped into five
families: Sportster, Dyna Glide, Softail, Touring, and the VRSC V-Rod.

•Harley-Davidson unveils plans for an all-new museum in Milwaukee, scheduled for

opening in 2008.   Harley-Davidson appoints Beijing Feng Huo Lun (FHL) as the
first authorized Harley-Davidson dealer on mainland China.
HARLEY-DAVIDSON’S PRODUCT LINE

•Harley-Davidson’s touring and custom motorbikes

were grouped into five families:
•CUSTOM
 . BIKES:-
SPORTSTER
DYNA GLIDE
VRSC V-Rod
•TOURING BIKES:-
SOFTAIL
TOURING

•Sportsters, Dyna glide and VRSC models were

manufactured in the company’s Kansas city,
Missouri plant. While Softail and Touring models
were manufactured in York, PENNSYLVANIA.
•These bikes come in different variations:-

•Sportsters and Dyna Glides- 4 model variations

 .
•Softails-6 variations
•Touring bikes-7 basic configurations
•VRSC V-Rod-2 basic styles.

•In 2004,Harley-Davidson ‘s retail prices of these bikes were-

SPORTSTERS carried retail prices ranging from $6,495 to $8,675
DYNA GLIDE model sold at price points between $11,995 to $16,580
VRSC V-Rods sold for $16,895 to $17,580
The ROAD KING AND ELECTRA GLIDE Touring models sold at price
$16,995 to $20,405.
DIFFERENTIATION STRATEGY
A firm differentiates itself from its competitors “when it provides
something unique that is valuable to buyers beyond simply
offering a low price.”

Because differentiation is about uniqueness, establishing

differentiation advantage requires creativity – it cannot be
achieved simply through applying standardized frameworks
and techniques. Some examples are- McDonald’s, BMW,
SONY, AMERICAN EXPRESS, HARLEY-DAVIDSON etc.

•Differentiation is about understanding customers and

how our product can meet their needs.
DIFFERENTIATION STRATEGY continue…..

•Harley-Davidson’s ability to develop its image of ruggedness, independence, and

individuality is supported by a top management team that dons biking leathers
and ride its “hogs” to owners’ group rallies, and a management system that
empowers shop-floor workers and fosters quality, initiative, and responsibility.

•Davidson has been particularly effective at achieving differentiation advantage

through careful examination of the activities that customers undertake in
selecting, purchasing, using, and maintaining their motorcycles.

•Harley creates value for its customers through providing test ride facilities at its
dealerships, financing, driving
instruction, insurance, service and repair facilities, owners’ club activities, and
various sponsored events for Harley riders.
 The Drivers of Uniqueness

HOG (Harley Owners Group)

membership
Chapter Activities
Accessories
Exclusive Events - Club HOG
and State Rallies
.
HARLEY’S STRATEGY AND IMAGE
Harley-Davidson’s turnaround strategy including
improving product quality by adopting Japanese
management practices, abandoning a reliance on
advertising in favor of promotions at motorcycles
rallies, and improving its dealers network to broaden
its appeal to new customers.
After hearing complaints about dealers from Harley
riders at rallies and other bike events, Harley
-Davidson conducted a PILOT PROGRAM with two
dealers in MILWAUKEE that called the dealers to
build clean,
•HOG membership was that new motorcyclists could experience freedom of the
open road, much like a Hells Angel. This riding club is different from joining a
country club or other upper-income families' club.
•Baby boomers purchased Harleys because of a desire to feel “forever young”
•In fact, many Harleys competitor have claimed that Harley sells lifestyles, not
motorcycles.

•On Harley-Davidson’s 2003 Memorial Day centennial celebration in Milwaukee,

thousand of leather –clad bikers attended, most of them are professional
people…people want to create image.

•Most weekend bikers were quite different from the image they emulated. Hells
angles continued to be linked to organized crime into 2003 like drug trafficking,
murdering, theft of motorcycles and firearms. Harley-Davidson balanced its need
to promote freedom and rebellion, while distancing the company from criminal
behavior
 PEST 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.
 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.

12/07/2021 ® Tony Gauvin, UMFK, 2005 14

 Internal Analysis
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 Operations Outbound Marketing & Services

Logistics Logistics Sales

Good Advance Excellent Very Good Excellent Excellent In US

JIT Procedure Highest Level Because of Relations & But Weak
Operations Good Shipment Brand Strength Outside
Porter’s 5 New Entrant
•• High Entry Barrier
Barrier
Forces ·High
·High tech
tech Involvement
Involvement
·Small
·Small scale
scale Producers
Producers minimum
minimum
threat
threat

Internal Rivalry
Power of Buyer ••Honda,
Honda, Yamaha,
Yamaha, Suzuki
Suzuki (( All
All POWER OF SUPPLIER
Japanese)
Japanese)
•Low power of customer as
as they
they are
are ••Out source Steel, Basic Electronics
Electronics
individual
individual ·Honda
·Honda mainly competing in U.S
U.S
·Assembly
·Assembly within the Company
Company
·Less
·Less no.
no. of
of Dealers
Dealers also
also rely
rely on
on ·Strategic
·Strategic Alliance
Alliance between
between Suzuki
Suzuki
individual customers and
and Kawasaki
Kawasaki ·Ease
·Ease of
of switching
switching suppliers
suppliers

Substitute Product
••Very
Very few
few substitute
substitute as
as luxury
luxury
bike.

·Cars, scooter and sports car.

·NO subs when looking for

luxury bike.
 Harley-Davidson University
•Set up in Milwaukee
•To train Dealers and Mechanics
•17,000 were trained in 2002
•It has 665Iinstructor led and 115 online
classes
•96 percent company dealer participate
 Distribution and Sales Program
•In 2003, 644 independently owned dealer

•857 dealers in 2009 in U.S.

•436 Buell dealers in U.S. in 2003
•76 Independent dealers and 1 Buell dealer in
Canada in 2003
•In Japan 161 Independent dealers in 2003
 Distribution and sales continue….
•50 dealers and 3 distributer in Australia and
New Zealand in 2003
•73 dealers in Asia/Pacific sell Harley and
Buell in 2003
•32 dealers in 17 Latin American Country in
2003
• 436 and 313 are Harley and Buell dealers
in Europe in 2003
PROBLEMS OF HARLEY-DAVIDSON ARE:-
•Harley has faced difficulties in luring buyers in the
performance segment of the industry.
•Heavy Price
•Not liked by Echo Boomer
•Challenges faces by Buell
•In the early 1980s, Japanese competitors' heavyweight
motorcycles created a real threat for the Harley-
Davidson organization.

•Harley-Davidson had co-developed, reanalysis the

customer needs and later purchased Buell to compete
with performance category against models offered by
HONDA,YAMAHA,KAWASAKI,SUZUKI and lesser known
European brands such as MOTO GUZZI,DUCCATI and
Triumph.
 Problem Continues……

•Long term Production Process

•Over availability of models
•Fuel Venting problem in Dyna series
•Problem with V-twins
•Poor Quality Control
THE END