Emmanuel Okon Ita

Name: ………………………………………………………………………………………………………………

X19102518
ID NO: ………………………………………………………………………………………………………………

M.sc Management 2019/2020

Programme: ……………………………………………………………… Year:
………………………

Managing the Organization

Module: ………………………………………………………………………………………………………………

Dr Philip Mc Govern
Lecturer: ………………………………………………………………………………………………………………

Due Date: 24th October 2019

………………………………………………………………………………………………………………

Title: Harley Davidson Case Study Assignment

………………………………………………………………………………………………………………
2,500
Word Count: ………………………………………………………………………………………………………………

Question 1
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The external and internal key features of the Harley Davidsons industry can be evaluated
using PESTLE, Porters five forces and SWOT analysis.

PESTLE of Harley Davidson

Political factors: Harley Davidson is currently stuck in the middle of a tariff war
between the United States of America and the world specifically the European union. Its
plans to establish strategic manufacturing plant in India to avoid EU tariffs this does not sit
well the trump led administration they view this move as being unamerican of the company.
Donald trump is threatening to impose the opposite side of the tariffs the company received
from the Ronald Regan administration 35 years ago which was crucial to them survive the
Japanese invasion of the motorcycle industry of America Bentley (2018).

Economic factors: Economic factors that could affect the industry include economic
development and purchasing power. According to Pongthanaisawan and Sorapipatan (2010)
in developing countries motorcycles growth coincided with increase in economic growth.
Motorcycle ownerships in developing countries exceeds car ownerships in developed
countries due to low per capital income and GDP compared to most developed countries. In
the past few years the motorcycle industry has experienced strong growth of up to 13.8%.
Although there is also a steady decline in consumer confidence and middle-class population
which would mean decline in consumer spending company spotlight (2010). There is still an
expanding market for Harley Davidson to tap into in the developing countries despite the
few challenges associated with the market.

Social factors: In popular culture the Harley Davidson bikes have a social image of
patriotism, rebellion, outlaw, and is perceived as ‘’nationwide builders’ bikes” (white men
bikes). The bikes image is synonymous with the US flag, to most outsider the Harley
community seems less inviting and not diverse to some people it signifies most things they
do not like about the American culture. The bike is also the quintessential American for
others Dean (2017). Millennials image of Harley Davidson include “in your face” bike, no
longer cool, old man image and obnoxious in terms of bike customization. There is a trend
toward small, quiet, light weight and electric bikes among millennials Ell (2018).

Technological forces: Changes in technology in the motorcycle industry is rapidly

growing. It is becoming very innovative industry. sophisticated heavy and lightweight bikes
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are constantly being introduced by competitors. Manufacturers are looking into advanced
technology like electric powertrain and concepts for fuel cell, and electric motorcycle. There
is now a huge consideration for use of lithium batteries to create and power electric
motorcycle just like bicycles and cars by competitors Cox and Mutel (2018).

Legal factors: The motorcycle industry is currently facing legal restriction from
government policies and agencies around the world especially in the area of emissions and
noise company spotlight (2010). Most notably the European union have put in place strict
emission rules known as the Euro 4 in 2016 and is set to roll out new rules in 2020 known as
the Euro 5 Piasecki (2016). This means motorcycle manufacturers like Harley would have to
make design changes to its bikes to comply with government regulations and laws. This
could mean additional cost and displeasing its loyal customers.

Environmental: One major environmental offset that will likely affect the industry way of
doing business is the need to reduce carbon emissions. Countries like America japan, and EU
countries are imposing more stiff laws and regulation to protect the environment. This puts
pressure on the motorcycle industry to adapt is products which could lead to increase in
cost and possibly affect their market profit margin company spotlight (2010).

Porter’s five forces of Harley Davidson

Buyers: Buyers of Harley Davidson are cruiser style riders who enjoy the brotherhood
riding lifestyle and community lifestyle Dean (2017). Some powers lies with the buyers
because together as a group under the HOG community they have an influence on the
company Mc Bee (2011). Even though they are individual buyers and might not want to
switch brands because of their loyalty and love for Harley Davidson.

Competitors: The motorcycle industry is very competitive Harley competitors are

Japanese manufacturers like Yamaha, Suzuki, Kawasaki, and Honda. Its European
competitors are BMW and Ducati Bronson and Beaver (2004). Some of these competitors
produce cruiser bikes like Harley Davidson but are not as successful in that market segment.
Riders prefer the Harley because of its legendary brand name and lifestyle affiliation which

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makes its customers loyal Todalbagi (2017). Their area of strength is production of sports
bike which attract the younger demographics Harleys Davidson badly needs.

New entrants: The motorcycle industry has a high entry barrier. KTM an Austrian
motorcycle manufacturer already in the industry had to forge new joint venture deals with
other companies to get necessary support to establish relationship with supplier and create
new supply chain. Acquire the right talent for the organization, gather and analyse data,
invest in new and emerging technology and set up factories just to expand and meet
international market needs Manufacturing global (2019). Entry into this industry would
require huge amount of finical and human resources.

Suppliers: Harley Davidson rely on foreign suppliers in japan, Italy, Australia, Mexico, and
china to provide parts this Harley reliance on suppliers for some key parts like break, clutch,
engine piston, and electronic components Fattore (2018). This puts them in moderate risk
and gives the suppliers in a fair amount of power. Changing to another supplier could lead
to possible delays in production due to new problems associated with change in supply
chain and quality control issues.

Substitutes: There are other cruiser and touring motorcycle options available to
customers from Honda, Kawasaki, Indian, Moto Guzzi, Triumph, Yamaha, and Ducati West
(2019). Consumer can easily switch brands if they want but will likely not. Most Harley
customers believe that Harley is the most premium and quality motorcycle brand in the
world. Even though its competitors make the same quality bikes as Harley Todalbagi (2017).

Swot analysis of Harley Davidson

Strength:
Brand image: Harley Davidson has the made in America brand image and possesses the
HOG lifestyle which domestic and international riders want to be associated with Dean
(2017).

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Organizational culture: The family/lifestyle and training of culture in Harley Davidson
creates a conducive environment for the company to grow as employees see them selves as
part of the company and are loyal Agnihotri (2013).

Weakness:
Ageing baby boomers: The baby boomer generation is ageing. the new generation of
millennials are not latching on to the brand because it does not appeal to them or meet
their needs Ell (2018).

Union disputes: Harley Davidson has witnessed three strikes between 2007 to 2010 by
workers over pension and health care cost. employees are also nursing fears that
production are going to be moved overseas McBee (2011). This could demotivate its loyal
employees and change their organizational culture and value of one family.

Opportunities:
Global outlook: There is huge potential in the international market. Between 2010 and
2014 30% to 40% of Harleys sales was predicted to come from overseas market especially
china and India because of their heavy use of motorcycle McBee (2011).

Treats:
US tariff war: The current US tariff war with various nations puts the company between
a rock and a hard place. If they keep producing in America only manufacturing cost might
increase due to retaliatory tariffs but if the move factories overseas, they might lose its good
relations with the US government

Emissions regulation: Due to changes in legation regarding emissions Harley would

be forced to make specification changes to its motorcycle to comply with the government
regulations or face outright ban spotlight (2010).

Question 2
According to Hitt, Black, and Porter (2014) there are six key area where organizational
change occurs, they include strategy, structure, system, shared values and culture, staff, and

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technology. key changes and transformation took place in the following areas in Harley
Davidson

Strategic change: Harley Davidson employed differentiation strategy from its

Japanese competitors. They changed their image from a company that just sells motorcycles
to a lifestyle and community brand both to its employees and customers. They created a
convenient unique, attractive, friendly, and family like environment which fostered
teamwork, customer satisfaction and relation as key factor relation Robertson and Qualizza
(2012). The companies also went public with its IPO in in 1986 changing it financial strategy
from a privately funded company to a publicly funded company Bronson and Beaver (2004).

Harley changed its marketing strategy from targeting a niche market in America to targeting
an international market with it made in America lifestyle brand by creating the Harley
ownership group HOG Agnihotri (2013). Harley employed customer diversification strategy
by trying to attract African American, female, Hispanic and international riders Nolan and
Kotha (2006). Harley adopted a human resource development strategy by training and
developing its employees in leadership Bronson and Beaver (2004). Product diversification
strategy also occurred when Harley purchased Buell motorcycle in other to compete in the
performance bike segment Agnihotri (2013).

Systems change Harley Davidson changed from a centralized to a decentralized

system by positioning staffs close to manufacturing operation. They ensured equal
representation for decision making, production, and quality control. They achieved this by
creating flexible work groups with staffs from all departments for effective communication
Bronson and Beaver (2004). The company reviewed it value chain and eliminated support
activities that where not adding value to the entire production process Agnihotri (2013).
Harley also benchmarked its Japanese competitors just in time JIT inventory system by
creating the Material-As-Needed Beaulieu and Love (2011). Pay for performance incentive
system was also adopted as incentives to motivate employees Nolan and Kotha (2006).

Technological change: The company made technological changes with regards to its
engine by creating the V-Rod engine designed by Porsche which is a V -twin liquid-cooled
engine offering almost twice the power of a typical Harley Bronson and Beaver (2004).

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Structural change: Harley Davidson changed its organization structural layout from
vertical to horizontal reducing span the long of control which allowed for more interaction
and learning for employees making them feel like a part of the organization Agnihotri
(2013). They created work groups and circles which include 8 to 10 workers to from all
departments to promote collaboration and participation in decision making Oosterwal
(2010).

Staff change: All employees where no longer seen as just as workers but as part of the
Harley family. They encouraged open and honest dialogue with them and conducted
surveys to track employee attitude and actively listened to the feedback they got Robertson
and Qualizza (2012). They empowered their employees through various leadership
programmes aim at improving employees’ skills and driving personal growth in leadership.
This improved their skills and competitiveness and in turn fulfilled employees need for
growth and personal advancement and growth Bronson and Beaver (2004).

Shared values and cultures: Harley integrated its employees into the Harley
lifestyle and turned the organization values into an adventurous family and stylish
community Harley changed to a relaxed communication flow system allowing subordinates
to interact with top management and give feedback on issues which created a fun
environment and family, friendly and fun working environment got Robertson and Qualizza
(2012). The organization developed a positive response to criticism and engaged in regular
training and development in leadership for employees creating an enabling environment for
growth Bronson and Beaver (2004).

Question 3
The leadership skills exhibited by the leaders in Harley Davidson early years was poor it did
not showcase some core and intuitional leadership skills. According to Fernandez et al
(2015) this include system thinking, stakeholder analysis, visioning, futuring, innovation and

7
performance management, leading change and change management, self-awareness,
communication, interpersonal, collaboration, and creative partnership skills. The leadership
merely came up with solution to challenges as they arise.

As a leader in a dynamic business environment I would use my self-awareness skills which is

related to my ability to scan my environment actively and vigilantly for the slightest change
no matter how small to avoid being caught off guard. A leader’s ability to be sensitive and
detect the direction of the blowing wind of change is critical. Good leaders can pick up soft
data in subtle ways which may not be easy to see Goffee and Jones (2015). When Honda
came into the US market and started manufacturing small and medium weight bikes plans
and scenarios would have been drawn up to determine what impact this would have on
Harley Davidson in the future. Efforts understand the strategy of the Japanese even though
we had no intention of going into the small and medium weight motorcycle market. If the
company at looked at possible scenarios it could have predicted that Honda would make a
play to enter the heavy weight segment later and set up plans to compete effectively with
them.

I would also utilize my communication and interpersonal skills which according to

Mumford, Campion, and Morgeson (2007) are the most needed skills by a leader at any
organizational level to solicit feedback from employees who had a better understanding of
trends and ideas in terms of the gap that needed to be filled in the market and problems
that need to be solved. If effective communication and good interpersonal relationships
existed in Harley Davidson Erik Buell insight on creating less powered bikes would have been
picked up by management and possible been developed by entering into collaboration and
creative partnership with Erik Buell possibly solving the problem of attracting younger
demographics.

When the Japanese brands launched their own heavy weight bikes which attracted younger
riders. As a leader who is self-aware, and sensitive to the slightest change. I would have
tried to interpret through critical thinking and research why the younger demographics
preferred the sports bikes. Because a leader is supposed to recognize patterns push through
ambiguity and seek new insight in other to expose hidden implications rather than seeing
things for their face value Schoemaker, Krupp, and Howland (2013). After doing this task the

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right department be it R & D or marketing to fill gap the customers needed in other to tap
into the younger demographics market.

As the leader of Harley Davidson even after the sports bike trend had already taken off
without us. I would courageously investment in research and development and created a
sport bike of our own even though success was not guaranteed. A leader must have courage
and to make decision and take calculated risk with the knowledge that it might fail Wooden
and Jamison (2009). It is the job of a leader to make tough calls with incomplete
information but with robust decision making process courageously Schoemaker, Krupp,
and Howland (2013).The new sport bike would be launched within a new performance
division of Harley Davidson far enough not to damage the current successful cruiser brand
but close enough that people could easily make a connection between the both of brands.
Not alienating the its existing loyal customers but rather leverage on them to influence
young riders like their sons who were teenagers and young adult into riding also creating a
new Harley Davidson community with a unique setting than that of the baby boomers.

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