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 analysis COMPONENTS CUSTOMERS PRODUCTS & SERVICES MARKETS CONCERN FOR SURVIVAL TECHNOLOGY PHILOSOPHY SELF CONCEPT CONCERN FOR PUBLIC IMAGE CONCERN FOR EMPLOYEES
MISSION STATEMENT EVALUATION MATRIX

YES / NO YES YES YES YES NO YES YES YES NO

PROPOSED MISSION To be branded as the best motorcycle available in the world. PROPOSED VISION The best quality motorcycle, motorcycle products and financial services will be provided world wide is the commitment of Harley-Davidson. 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 HarleyDavidson 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-Davidson’s. 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. HarleyDavidson do our part in supporting all environmental laws in every country we do

. Determination and commitment is the place where Harley-Davidson intends to stay. .business.

A new assembly facility opens in Manaus. Confidence in economy is directly proportional to the purchasing of consumer items.S Harley-Davidson have a household income of $78.S. Over two thirds of the sales of Harley-Davidson motorcycles are to buyers with at least one year of education beyond high school.600.EXTERNAL ANALYSIS PESTLE • • • Harley-Davidson is one of the most admired and recognized companies in the world today. Brazil. U. Academy of Motorcycling for those interested in learning to ride a motorcycle. . make them more affordable to a larger group of Brazilian customers.S Harley-Davidson motorcycle is a married male in his mid-forties Average purchasers of a U. Repeat business is strong as about 42% of motorcycle purchasers have owned a Harley-Davidson previously.S Government and People are considering Harley-Davidson as an American icon. Opportunities in emerging economies [India. • • • • • • • • • • Average purchaser of a U. the first operations outside of the U. China] but uncertain operating situations. “Riders-Edge” the motorcycling academy of Harley-Davidson introduced more than 1000 aspiring motorcyclists to the sport in 2000. Only about 9% of Harley-Davidson U.S retail motorcycles are to women. reduces taxes. 30% of the Harley-Davidson buyers have college degrees.

Harley-Davidson is facing some legal problems in Asian countries. Harley-Davidson’s have a wide variety of products according to Standard. • Noise pollution and some emission standards of Harley-Davidson bike is not up to the level of some countries across the globe. in India there is 60% tariff and various other taxes will cause the price of the bike to double. Performance. Touring & custom. .• • • Harley-Davidson is one of the main manufacturer and user of VENGINE configuration.

engineering. this alliance strengthened both companies’ global motorcycle businesses. • • The economies of scale are low in this segment. half of its revenue is only from motorcycles). the main competitor of Harley-Davidson in U. and manufacturing of motorcycles. • Four major competitors are mainly concentrated on these heavyweight motorcycle segments: in addition to HarleyDavidson the other three are Yamaha. Suzuki. design. • Polaris (American snowmobile/ATV manufacturer) producer of “Victory” motorcycles priced its motorcycles below the HarleyDavidson motorcycles. There is some small scale producers. • Honda. so that there is only four main competitors.S eat up some market share of Harley-Davidson. and they are increasing the interest of motorcycles among the general public.  Substitute products . Honda all are Japanese companies. • Strategic alliance between Suzuki and Kawazaki in the areas of product development. because this segment needs a lot of capital investment and the industry is on a maturity stage. • Some of the major competitors of Harley-Davidson have larger financial and marketing resources and are more diversified (Example: Yamaha. who are making these custom made motor cycles but the amount of their production is not at all a threat for Harley-Davidson.Five Forces  Internal Rivalry.  Potential entrants • Entry barrier is very high is this segment. which is the reason why there are only four major players.

of Harley-Davidson motorcycles are individual customers.  Power of Customers • Consumers position. so that there is only a few close substitutes for heavy weight motorcycles that could seriously affect the market. • • In India Enfield can pose as a small substitute. OPPORTUNITIES  The European demand for Harley Davidson is the highest in the international market and represents the single largest motorcycle market in the world. they can easily switch to the alternate suppliers without any problem in production. that can’t affect Harley-Davidson’s financial position. basic electrical equipments and shipping of final motorcycles are the main things Harley-Davidson seeks from suppliers. so that if one supplier attempted to increase the price. • • Passenger cars. The people who are thinking of buying a heavy weight motorcycle are not seriously considering one of these options. sports bikes. • The numbers of dealers around the globe are also less and they are also dependent to the individual customers. scooter.. sports bike. • Harley-Davidson has a wide span of suppliers.  Power of suppliers Steel. scooter bikes are the main substitutes of Harley-Davidson motorcycles.• Harley-Davidson motorcycles are a luxury vehicle. so that they can’t seriously affect Harley’s financial .

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

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 Union’s 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 Harley’s brand name. .

1 0.EFE MATRIX Weighted Key external factors OPPORTUNITIES Weight Rating score 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.15 0.2 .15 4 0.05 0.1 0.025 3 0.025 4 3 3 2 1 0.05 1 2 4 1 0.6 0.3 0.05 3.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 Harley’s brand name TOTAL 0.6 0.025 0.025 0. S.1 4 3 0. 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 THREAT 0.075 loss in domestic market share in recent 0.3 Agencies in the U.1 0.1 0.3 0.025 0.15 0.6 Harleys ongoing capacity restraints caused a shortage supply and a years Harleys average buying age is 42 years old and increasing The European Union’s motorcycles noise standards are more stringent than those of Environmental Protection 0.2 0.

02 1 3 2 0.85 0.05 Rating 3 3 Weighted Score 0.25 0.75 0.06 0.025 0.16 0.1 0.075 0.04 2.56 0.075 0.15 Weight 0.6 0.02 0.075 HONDA YAMAHA Advertising Product Quality Price Competitivenes s Management Financial Position Customer Loyalty Global Expansion Market Share TOTAL 0.335 3 1.6 0.03 3 4 0.32 1 4 3 0.1 0.12 0.15 2 0.45 0.15 4 0.6 0.15 0.1 0.15 0.12 0.93 .2 0.96 3.025 1 3 0.14 4 0.3 1 3 2 0.025 Rating 4 3 Weighted Score 0.15 Rating 4 4 Weighted Score 0.CPM HARLEY CRITICAL SUCCESS FACTORS Weight 0.3 0.6 2.2 0.6 Weight 0.6 0.15 0.1 2 0.005 0.06 2 0.05 0.2 0.05 3 2 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 = 0.63 LEVERAGE RATIOS Debt to Total Assets Ratio = Total Debt / Total Assets =994/4923 =0.INTERNAL ANALYSIS FINANCIAL RATIOS LIQUIDITY RATIOS Current Ratio = Current Assets / Current Liabilities = 2729/956 = 2.23 Times Interest Earned Ratio = Profits before interests and taxes / Total Interest charges =1149/0 ACTIVITY RATIOS .85 Quick Ratio = (Current Assets – Inventory) / Current Liabilities =(2729-208)/956 = 2521/956 = 2.

34 Operating Profit Margin = EBIT / Sales =1149/4624 =0.66 =87.23 Fixed Assets Turnover = Sales / Fixed Assets =4624/2194 =2.99 PROFITABILITY RATIOS Gross Profit Margin = (Sales – COGS) / Sales =(4624-3070)/4624 =1554/4624=0.15 Average Collection Period = Accounts Receivables / (Total credit sales/365) =1114/(4624/365) =1114/12.25 Net Profit Margin = Net Income / Sales .10 Total Assets Turnover = Sales / Total Assets =4624/4923 =0.Inventory Turnover = Sales / Inventory of finished goods =4624/208 =22.93 Accounts Receivables Turnover = Annual Credit Sales / Accounts receivable =4624/1114 =4.

526 Growth ratio Sales Net income =Annual % growth in total sales =(4624-4091)*100/4091=13.519 =Market price per share/Earning .15 Return on Equity ( ROE ) equity Earnings Per share (EPS) equity Price Earning ratio per share =39.029 =Annual % growth in profits =(760-580)*100/580=31.11/2.519 =15.034 = Net income / Total Stock holders = 761 / 2958 = 0.16 Return on Total Assets ( ROA ) = Net Income / Total Assets = 761 / 4923 = 0.=761/4624 = 0.26 = Net income / Total stock holders = 761 / 302 = 2.

S).  Buell Riders Adventure Group (BRAG) was also formed recent  Customization of the bikes.  Harley-Davidson have a good marketing division and its divided as dealer promotions. analyzing the future of Heavyweight motorcycle market IFE MATRIX .STRENGTHS  Net income of 2003 was $760mn. customer events.  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).50.  Harley-Davidson is the only major American heavyweight motorcycle manufacturer. one of the biggest markets. magazine and direct-mail advertising. WEAKNESS  High price  Harley-Davidson has problems in gaining more market share in some European countries (That’s one of the main markets for Heavyweight motorcycles outside U.  The HOG (Harley Owners Group). and public relations.  Strong brand name. which have a 7.000 members world wide is the industry’s largest company sponsored motorcycle enthusiast organization. its more than 30% as compared to the previous year 2002.  Required production is not met.  They didn’t yet start its sales in India. this is Harley-Davidson’s major revenue maker.

which have a 7.15 3 0.000 members world wide is the industry’s largest company sponsored motorcycle enthusiast organization Buell Riders Adventure Group (BRAG) was also formed recent Customization of the bikes.025 4 0.50. magazine and direct-mail advertising. this is HarleyDavidson’s major revenue maker Harley-Davidson have a good marketing division and its divided as dealer promotions. and public relations WEAKNESS 0.075 0.45 High price .05 0.15 2 2 0.4 0.WEIGHTED KEY EXTERNAL FACTORS STRENGTHS WEIGHT RATING SCORE Net income of 2003 was $760mn.025 2 0.1 0.1 0.27 0.09 3 0. customer events.05 0.3 0.025 3 0.025 0.15 4 4 0.05 2 0.6 0.1 0. 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 The HOG (Harley Owners Group).

18 .06 3 0. one of the biggest markets Required production is not met.S).05 1 4 0.Harley-Davidson has problems in gaining more market share in some European countries (That’s one of the main markets for Heavyweight motorcycles outside U.075 0.3 0. They didn’t yet start its sales in India. analyzing the future of Heavyweight motorcycle market TOTAL 0.2 3.1 3 0.

SWOT matrix Opportunity SO Strategy:   Strength EXPAND PRODUCTION TO EUROPE EXPAND PRODUCTION TO ASIA Threat ST Strategy  INCREASE STRONG BRAND NAME INCREASE MARKET TO YOUNGER CUSTOMER  WO Strategy WT Strategy  Weakness IMPROVE EMPLOYEE RELATIONSHIP .

HORIZONTAL INTEGRATION. SPACE Matrix Environmental Financial Strength (FS) Return on Investment Leverage Liquidity Working Capital 2 3 4 2 5 Stability (ES) Technological changes Rate of Inflation Demand variability Price range of competing products Barriers to entry into market Competitive pressure Ease of exit from market Price elasticity of -2 -3 -6 -2 -6 -4 -3 -2 Cash Flow Inventory Turnover Earnings per Share Price Earnings Ratio 3 3 2 . LIQUIDATION. PRODUCT DEVELOPMENT. MARKET PENETRATION. DIVESTITURE.GRAND STRATEGY MATRIX RAPID MARKET GROWTH STRATEGY: MARKET DEVELOPMENT.

capacity utilization Technological know-how Control over suppliers & distributors Total -2 -13 Total 25 .demand Risk involved Total Competitive Advantage (CA) Market share Product quality Product life cycle Customer Loyality Competition's capacity utilization in -2 -30 24 business Total Industry Strength 3 3 5 4 6 4 -1 -1 -3 -1 -4 -1 (IS) Growth potential Financial stability Technological know how Resource utilization Ease of entry into market Productivity.

. MARKET PENETRATION.33 Point on X axis = (-1. PRODUCT DEVELOPMENT.17)/2 = 1. MARKET DEVELOPMENT.165 Strategies: STRATEGY: BACKWARD INTEGRATION.85+4. HORIZONTAL INTEGRATION.Average value for FS = 3 Average value for CA = -1. FORWARD INTEGRATION.16 Point on Y axis = (3-3.85 Average value for IS = 4.17 Average value for ES = -3.33)/2 = -0.

FORWARD INTEGRATION. PRODUCT DEVELOPMENT .075 STRATEGY: BACKWARD INTEGRATION.2 IFE: 3. MARKET DEVELOPMENT. HORIZONTAL INTEGRATION.I. MARKET PENETRATION.E MATRIX EFE: 3.

MARKET DEVELOPMENT. DIVESTITURE.BCG MATRIX RELATIVE MARKET SHARE: 48% GROWTH RATE: 13. . PRODUCT DEVELOPMENT.029 STRATEGY: MARKET PENETRATION.

0125 3 0.0375 0.000 members world wide is the industry’s largest company sponsored motorcycle enthusiast organization Buell Riders Adventure Group (BRAG) was also formed recent Customization of the bikes.075 4 4 4 0. 0.15 2 2 0.15 0.075 2 2 0.075 0.0125 0. customer events. this is HarleyDavidson’s major revenue maker Harley-Davidson have a good marketing division and its divided as dealer promotions.09 0. and public relations WEAKNESS 0.2 0.QSPM STRENGTH WEIGHT J.025 0 0.05 0.2 0. 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 The HOG (Harley Owners Group).05 0.0125 2 2 0. which have a 7.09 3 0.225 3 0.135 2 0.S).V EUROPE AS TAS J.0375 3 0.15 0.025 3 4 0.V ASIA AS TAS Net income of 2003 was $760mn.3 3 4 2 0.05 0.075 3 0.05 0.0125 0.09 .025 0. magazine and direct-mail advertising.03 3 0.025 0.045 3 0.0375 High price Harley-Davidson has problems in gaining more market share in some European countries (That’s one of the main markets for Heavyweight motorcycles outside U.50.225 0.

3 0.15 3 0.075 3 2 0.0125 0.They didn’t yet start its sales in India.05 market share in recent years Harleys average buying age is 42 years old and increasing The European Union’s motorcycles noise standards are more stringent than those of Environmental Protection Agencies in the U.025 0.1 0.025 0.0125 0.05 3 0.0375 0.075 4 0.05 .075 0.225 0.15 0. one of the biggest markets Required production is not met.025 0. S.2 0.1 4 0.0375 2 0.025 4 3 0.025 0.075 0.15 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.0125 3 4 4 3 2 0.1 0.05 0.025 4 0.2 0.075 0.0125 3 0.025 0. 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 THREAT 0.1 0 0.05 0.3 0.0125 4 3 3 2 1 0.025 3 2 2 0.3 2 0.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 Harley’s brand 0.3 0.025 2 4 1 0. analyzing the future of Heavyweight motorcycle market OPPORTUNITIES 0.15 Harleys ongoing capacity restraints caused a shortage supply and a loss in domestic 0.225 0.

 MARKET DEVELOPMENT  Harley-Davidson can bring in their vehicle to Asian countries like India and China. .0875 2. Harley-Davidson has a good brand name so it’s easy for them to eat up the competitor market share if they can provide some more customer benefit.S.  PRODUCT DEVELOPMENT  Younger generation and female are now coming to this segment so expand the motor cycle segments to younger generation and females. like U. U.  Expand the HOG (Harley Owners Group) to Asian countries.K. because these countries have a high population and the market potential is also high.7925 STRATEGY RECOMMENDATION & IMPLEMENTATION:  MARKET PENETRATION  Get some more market share from the existing market.S customers to the Asian customers they can increase the sales.  In Europe they can increase or expand the Buell’s market share by introducing new motorcycles.  Competition is high in this segment mostly in U. and Japan etc through more marketing techniques like advertising.S so market penetration can be a good choice for the company.  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 won’t allow that type of vehicles to come to India. if the company can provide the customer satisfaction that they are providing to the U.name 1 3.

but it’s too costly. otherwise continue with the present one.  DIVERSIFICATION  Bring in new vehicles to new markets like India and China is a good choice.  MEASURING ORGANIZATION PREFERENCES  Analyze all financial ratios (current and the future).  Reference: . then implement the new strategy.  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. 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. Negotiations with the Government can solve these problems.  Bringing new types of recreational vehicles is a best choice. RECOMMENDATION  Expand European and Asian market.  Concentric diversification: Bring in new recreational vehicles.and its difficult that taxes and levis are high in India so starting new plant in India can solve this problem.  Increase the sales of Buell sport bike and Harley-Davidson to younger customers and females.  If any advantage.

harley-davidson.com . Strategic Management Concepts and Cases.  www. David. Fred R.com  www. 10th & 12th Edition.google.

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