Running Head: MANAGEMENT DECISION MAKING 1

Management Decision Making

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Institution
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Introduction

Harley-Davidson Company is a firm that deals with the production of motorcycles, spare

parts, and sale of riding costumes as well as licensing the use of its name and trademark by other

companies such as those manufacturing clothes which include L’Oreal’s line of Harley-Davidson

cologne.

Transformation

Harley’s change came to effect after a drop in its market for the motorcycles. This was

brought about by competition from the Japanese companies as well as accumulated debts which

were included in the company’s balance sheet. However, in the 1980s, the company was reborn

and became successful due to; cutting down stock and costs hence enhancing quality control.

There were improved production methods and co-operation between workers and the

management. Additionally, investment in new models and machinery led to a broader market for

its motorcycles. Harley’s managers conducted a benchmarking to several Japanese car plants on

the Just-In-Time system, whereby they later converted their operations to JIt. They came up with

a production-scheduling program known as Materials-As-Needed.

Tools and Techniques

SWOT analysis explores a company’s strengths, weaknesses, opportunities, and threats.

Harley’s weakness was that he lagged behind when it came to improving his technology.

However, the company too had some strengths that did outdo his competitors, he ventured in

new products and came up with new models, attractive painting designs, and improving his

engineering techniques. Harley identified opportunities such as selling spare parts and riding
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costumes for both genders (Brannen, Miller, & Ibrahim, 2012). He also licensed the use of his

name and trademark to other companies who manufactured clothes, jewelry, and other products.

Nonetheless, Harley faced threats from his competitors such as Honda and BMW who

manufactured both motorcycles and cars, unlike him who manufactured motorcycles only.

PESTLE analysis considers factors affecting Harley which are Political, economic,

social, technological, legal, and environmental aspects. Harley took a long time to adopt new

technologies in the manufacture of motorcycles. He chooses the traditional designs thus his bikes

looked old-fashioned. In a social perspective, Harley built better employee-employer relationship

thus leading to job satisfaction and employee commitment. In an economic point of view, models

developed by Harley were expensive thus the customers opted for cheaper products from other

companies.

Porter’s analysis focuses mainly on the competitors. Harley faced competitive rivalry

from Honda and BMW who produced both cars and motorcycles making him loose some clients.

(Schoenberg, Collier, & Bowman, 2013). To improve his supplying power, Harley improved his

distribution network and incorporated pre- and after-sales services to his clients, which he

believed would increase demand for the motorcycles.

Harley Principle Resources and Capabilities

Principle resources determine the capacity of a firm. First, financial resources; Harley had

his sales largely financed by loans from its financial services which was later retained on its

balance sheet. Second, physical; the firm worked hard in improving its equipment painting

designs and sale of spare parts. Thirdly, technology; Harley had less know-how of technology

whereby he developed old-styled motorcycles. Fourthly, reputation; the firm’s primary

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customers were aging and bought new bikes less often. Lastly, human resources; the

management buyout in Harley enhanced employee relationship, and workers became more

committed.

Recommendations

Harley was left behind in adopting the new technology. He would have been in a position

to cope with the rising competition if he adopted new technology. Secondly, he would come up

with other substitutes of motorcycles as his competitors had done, allowing him to maintain his

customers who would have opted for alternatives from the firm. Thirdly, he would have

regulated the prices of his products to compete with those of his competitors.

Conclusion

Analyzing the firm’s strengths, weaknesses, opportunities, and threats are essential in

determining the areas to be improved for it to be successful and achieve its required goals. A

PESTLE analysis is necessary to identify all the external factors that would influence the

performance of Harley. All these factors are major for the achievement of the goals of a firm and

should not be assumed.

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References

Brannen, D. E., Miller, J. R., & Ibrahim, N. A. (2012). HARLEY-DAVIDSON, INC.

Schoenberg, R., Collier, N., & Bowman, C. (2013). Strategies for business turnaround and

recovery: a review and synthesis. European Business Review, 25(3), 243-262.