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The purpose of this assignment is to decipher and understand the inner and outer working of Harley Davidson Motorcycles Company by using different tools and techniques used in class. By studying this company from all possible angles we could determine the future of the company and how it could cope in a so ever changing world. External and internal analysis will be used with a wide range of tools to determine threats and opportunities that can affect this company.
The Harley Davidson Company is well known for their V-twin engine cruising motorbikes. All the needed information about this company is in the case study papers. Harley Davidson is a major market leader in the USA for cruising bikes and also it offers a lifestyle that other companies can’t replicate. With the advancement of mechanical and manufacturing technology and increasing competition, Harley faces a rough time to sail through. Mainly manufacturers from the Far East have targeted Harley for competition by bringing up their own version of cruisers in which they succeeded. They also came along with more advanced engine technology at a cheaper price tag and also by sheer volume compared to that Harley can output.
By using the tools to analyse the market situation, threats, opportunities and other variables a draw-up of Harley’s future can be achieved.
Vision: Harley Davidson vision statement: ‘We fulfill dreams inspired by the many roads of the world by providing extraordinary motorcycles and customer experiences. We fuel the passion for freedom in our customers to express their own individuality’ www.harley-davidson.com Harley Davidson’s vision expresses to be unique in every way with by standing by its roots and delivering superior motorcycles to the market with prosperity quality and character built in.
Harley Davidson’s mission statement: ‘We ride with our customers and apply this deep connection in every market we serve to create superior value for all of our stakeholders’ www.harley-davidson.com
Harley Davidson has a objective and aim which is to provide its customer the ultimate riding joy and a global Harley Davidson community not only for the enthusiast and to attract more customers for more people to enjoy and share the pleasure of owning a Harley Davidson motorcycle
Purpose: • • • • • Values: Harley Davidson to remain an iconic legendary heritage to American culture. To maintain prosperity and uniqueness of the Harley Davidson brand and the image it is selling. To dominate the heavy motorcycle segment globally and make a statement of being one of the oldest all American motorcycle producers and its authenticity to American culture. To produce quality motorcycles for customers to experience the ultimate riding experience. To build a global community of Harley Davidson riders not only for enthusiasts.
• • Standards and Behaviours: • Since the buyout the company has seen many changes especially in the hr department they have developed a more non hierchial management approach which has led to better employee involvement and commitment. Its loyalty to customers. Harley has been improving their products and technology and moved on from their old fashioned ways and technology in order to compete with its competitors. • • • The standards and behaviours of Harley Davidson is influenced by its values and purpose as it reflects upon Harleys own values from their website which includes encouraging intellectual curiosity. During the early 1900’s through racing to being the suppliers of motorcycles to the American army and police the brand is very strong and well known globally. Developed a very good reputation very early stage compared to its competitors. Harley Davidson also owns beull and mv agusta in order to capture the lighter weight sports bikes category. Using and the well known brand as a tool to convince that it’s not only a bike it’s a lifestyle.• • • • • • Being one of the oldest all American motorcycle producers in the world and its developed expertise and experience developed over a century. The Harley Davidson brand not only represents motorcycles but also a lifestyle and culture. The unique styling and character with Harley Davidson motor bikes setting trends for heavy weight motorcycles. The brand represents a tradition and authenticity to American cultures showing loyalty to its American roots works in their favour. Its loyalty to America as it served its part during the war eras for providing them motorcycles throughout and being the only sole American motorcycle to survive. Harley Davidson’s involvement with its customers. The Harley Owners Group (HOG) worldwide events held including rallies organised by Harley Davidson. Strategy: • • • Globalization. respect for individuals and fairness . this can create an emotional attachment with the product as it is also used as a way of expressing yourself and your style. Harley Davidson has also changed its initial thoughts about entering the lightweight motorcycle segment and has introduced new bikes to compete in this segment. Harley Davidson has broadened its target audience with its new products. dealerships worldwide.
tshirts.Harley have now developed liquid cooled engines with electronic ignition -improved suspension and brakes for the European Market Margin Procurement -Lots of bought-it parts from other suppliers. caps.etc) Service -Harley Financial Services (buy on finance) -improved customer service -try before you buy (test ride facility) -Customisation. delay orders) -MV Production and Assembly in Italy Operations -2 power train plants in Wisconsin -Plastic parts manufacturing facility in same state -2 motorcycle parts manufacturing plants in other states close by -Motorcycle wheel production in Australia -Brazil assembly plant for that market Outbound Logistics -Products distributed through over 1000 dealerships worldwide. Australia and Europe Marketing and Sales -HOG group. Inbound Logistics -9 Main site around the USA of which 7 in the state of Wisconsin Including the Head Office -Wheel manufacturing in Australia (which will incur delay from shipping. consultation (including Chrome Consulting) -Service/repair facilities . -manufacturing plants located in Italy.jbkjb Firm Infrastructure Main market share holder in heavyweight cruising bikes Non hierarchical management and more team based structures Over 1000 dealers world wide 4 manufacturing plants in the USA Differentiator firm also known for their custom seats and other motor bike parts Buell Motorcycles for sportier bikes MV Augusta. selling more of a “Harley experience” -Hundreds of dealers worldwide -main market is middle aged middle class men -company branded merchandise sold (perfumes. USA mainly. Brazil. Italian super bike manufacturer purchased Human Resource Management -Improved dealership customer service quality -Harley Davidson Learning Centre for staff training and improvement -Good health and leave benefits offered to employees + bonuses Technical developments -JIT manufacturing systems implemented to their plants in order to produce bikes faster and better quality -Harley only made around 90 Patent applications during the last decade . which meant that manufacturing costs were too high.
braking and suspension were primitive compared to those of BMW and others. the competition was getting heavier with other Japanese manufacturers introducing rival models resembling to Harleys’. has many of its parts bought from other suppliers and small manufacturers which account for a major part of manufacturing costs as they do not have strong bargaining power. Buell also had a group called BRAGG which was to offer the same experience as the HOG. How ever in the last decade Harley made some patent applications and has improved their engines by adding electronic injection and liquid cooling. Most of its plants are located within the Wisconsin state but the others are in distant places. They offered the HOG. A major concern is their manufacturing and assembling plants including headquarters. This slow laid back attitude towards R&D and adapting new technologies just led to two new types of engines decades apart while the likes of Honda could churn out new engine models nearly every year. They have a Research and development centre in the same town as one of their power train production plants which is good as communication can be done in a fast way.D. Also the company seems to be offering a range of merchandise that brings in some revenue. are all far apart from each other and located though out the USA. The two part fabrication plants are located hundreds of miles apart not to mention their wheel manufacturer which is located in Australia. they tend to stick to traditional design and technology which might have put off some potential customers. Engines wasn’t the only technical department Harley was behind with. others are attracted by those motorcycles. So maybe by introducing the same styles they could keep the younger market till they buy a real Harley and this is how they can survive. In order to keep up and prolong the life of Harleys. What is not known is that if they are in the same industrial estate. The competition was set to produce as much as 30 times heavyweight bikes including ones that looked alike in style. Also their R&D didn’t have the advantage to pass on knowledge from other entities such as car manufacturing like some other competitors were doing. where roads are curvy. H. However there is good infrastructure within the USA. Although they did have this facility. and also that came with more powerful and economic engines. The main problems this poses is transportation costs and time. Harley is a company that seems to be selling a lifestyle which only comes complete if the bike is bought and then you can finally belong to a family rather than just having a technically sound bike and then there is nothing after. they offered constant upgrades. In order to adapt to other markets such as the European. The figures of sales show that Buell is increasing . and the parts would be transported on cargo lorries but this would take hours or even days before parts can arrive. While their main market may be middleaged men from the middle class. this is also due to their philosophy of letting other companies thrive rather than making it in-house. just a bike without a soul.Value chain Evaluation Harley Davidson have always been a market leader in the USA heavyweight cruising motorcycles but as they increased production capacity by introducing JIT systems in their plants. This led to the acquisition of Buell motorcycles which had sportier performance and therefore would seem more appealing to a younger market. they had improve suspension and brakes in order to satisfy this spec. but probably isn’t that necessary as it is not like a souvenir shop. However this target market is getting older and the company is not attracting younger audience. but also mechanisms such as gears. a group founded for Harley owners to arrange outings and events.
While they produced much lower volumes than the competition.shipments year on year. the dealerships were reformed in order to drastically improve customer service and availability in order to attract their desired target audience which wasn’t flowing in through their network’s doors. Italian super bike manufacturer. Harley is more of a differentiator company that could also offer customised motorcycles. This posed problems with their cash flow and balance sheets. They included services such as Chrome Consulting. . less formal communication between managers and shop floor staff and suppliers was sparking up more enthusiasm thus increasing productivity. and all parts were made manually. Also the MV Augusta.D. This meant that the price bas was widening and parts were costing more. was also more appealing to the younger generation. custom seats and custom paint jobs in order for the customer to have their dream motorbike come true. which ended up being paid by customers when buying the end product. During the management changes in mid 80’s. This was a good source of income as it was sold throughout Europe and it is the bike which appeals the most to this market. Their approach to non-hierarchical management style and a better. Amongst other entities. also purchased by H. Harley offers financial services so that people can buy bikes on finance but this proves to be difficult as not everyone can keep with payments.
5 1 The table illustrates where HD are positioned which is a differentiation company which is high priced and aimed at a broad scope of market however their customers are mainly higher earning 40+ years.1 0.1 0.6 0. Resources: Poor .45 2.5 3 1.1 0.15 1 2 2 2 3 0.05 0.15 0.15 0.15 0.15 0.Internal Factors Matrix Internal Factors Strengths: Strong/well known brand Global Good Experience in building motorcycles Strong loyal community of H.1 4 4 3 2 2 3 0.1 0.5 2 5 4.2 0. HD does have a long tradition in the industry creative designs and strong marketing capabilities along with engineering capabilities which makes HD liable to compete as a differentiator. owners Good Corporate structure Good Distribution Weakness: Struggle to capture attention of their lightweight bikes Majority of their customers being 40+ Marketing Engineering Total Importanc e Weighted Rating Score Comments Strong can use to push Buell & MV Needs to be stronger in some parts of the world Needs to advance Can stray its focus Its a key issue to success Mainly outsourced Hard to compete with its rivals products Narrow segment Wrong marketing approach Hard to compete with its rivals engineering 0.D. Being a differentiator carries certain risks such as competitors imitating therefore HD is always under threat with the market being saturated with HD lookalike imitations therefore HD always needs to look for ways of implementing distinctiveness into their products.05 0.3 0.3 0.05 0.6 0.6 Outstanding Above Average Average Below Average 2.5 4 3.05 0.
Human 9000 employees Good employee involvement and encouragement culture. Employee training programs. Open communication non hierchal culture.1 billion Buell and MV Agusta plants. Advanced technology implemented into manufacturing processes such as vibration analysis and thermograph programs HOG activities promoting brand.4 billion. Using M. Intangible 90 new patents 2001-2009 JIT and lean implementation into production & inventory. 1 Fiberglass and plastic fabrication site in America. plant. 2 Motorcycle parts fabrication sites in America. Property. machinery: £1. Good healthcare benefits. Real D scientific visualization for designs. Harley Davidson stores & cafe’s around America Various training & learning centres for staff. 1 Corporate Office in America. Tangible Cash: $594 million Receivables for investment: $1. Over a 1000 dealerships globally. 1 Buell Assembly site in America.• • • • • • • • • • • • • • 2 powertrain production sites in America. . 1 Product development centre in America 1 Assembly plant for Brazilian market in Brazil 1 MV Agusta & Cagiva assembly site in Italy 1 MV Agusta & Cagiva warehouse in Italy 1 Motorcycle wheel production in Australia Over a 100 licensees for non motorcycle such as toys and souvenirs.Porters Generic strategy table we can determine HD’s strategy.
Being a differentiator carries certain risks such as competitors imitating therefore HD is always under threat with the market being saturated with HD lookalike imitations therefore HD always needs to look for ways of implementing distinctiveness into their products. HD does have a long tradition in the industry creative designs and strong marketing capabilities along with engineering capabilities which makes HD liable to compete as a differentiator.HD The table illustrates where HD are positioned which is a differentiation company which is high priced and aimed at a broad scope of market however their customers are mainly higher earning 40+ years. .
Financial Analysis .
The analysis below gives some understanding on the financial situation within the Harley Davidson Motor Company for period from 2006 to 2008. within the US and from Australia. 10. and accessories in order for the customers to customise their bikes further and make the most out of it. This table represents the company’s sources of income and spending on a yearly basis.General merchandise sales were up a staggering 10% in 2007 followed by a slight increase of nearly 3%in 2008.The financial services just suffered a decrease of 1. 8. their profit seems to spiral downwards 9. The following points were identified within the table. a total of nearly 10% over the past 2 years.Engineering. But over all this overhead has increased considerably .From point 1. All the sales from both of these categories are fused into one figure so no one is really sure which group is most popular.The costs of good soared by nearly 6% during this period. looks like people bought less bikes and preferred to get HD merchandise 5. 1.With manufacturing costs up. Also this gives a stable ground to analyse and even predict their future from their financial past by comparing every year.57% decrease in revenue between 2006 and 2008 due to factors stated above. dramatically decreased sales volume with a lowered revenue. admin and selling expenses are all summarised up into one figure but nothing is known what has been spent on each. Harley was loosing sales meanwhile.A total of 3.There is a dramatic drop in sales. This section will add more comments related to the profit loss table. They are making less and less profit. 7. Also the parts were fabricated and HD didn’t have a strong bargaining power with their suppliers. this could be due to the competition also the year 2008 was when the recession started and people had less disposable income to buy a product for leisure 2.Year on year their profit margin seems to decrease alarmingly as well.The parts and accessories sales suffered just a slight decrease but barely noticeable. and the prices of raw materials were getting up. Increased manufacturing costs and also to consider transportation costs. Both profit-loss summary and balance sheet will provide the figures. when the economy began collapsing. people still need to repair their motorcycles (maintenance and replacements of failed components).3% over the period of those two years. 4. less and less motorcycle sales due to change in economic climate. 6. 3. Big increase in 2007 and a bigger decrease in 2008.
Investments don’t return anything. as this can take their products further by implementing new technologies. This department could help to boost the sales up but there was a huge decrease in 2008 from 2007 where there was a small increase.(nearly 16%). 12. Financial info and stock information too from http://investor. Also probably they had decreased budget due to the lower sales volume. they had to spend more on advertising their products. in order to reach more people so that they could pick up sales again. where stocks were at their highest and then crashed from there onwards 16. 13. a massive 82% from 2007. NB.cfm . as shares in HD would have lowered in value. especially engines. higher manufacturing and over heads costs. Not good for the shareholders.As their sales volumes dropped drastically. This is due to lower sales volume. an unnecessary increase while the revenue was lower than previous years 14. 15. This could suggest that they are not really interested in developing their products further. probably they have restructured their distribution network and engineering costs could have soared. this is worrying.The total costs of overheads has risen by 13%.com/StatementsBalanceSheets. Admin fees could have gone up as there was more paper work to do. 11.harley-davidson.The operating profit decreased dramatically over the past 2 years. The green highlights represent figures that contribute positively to the company and the red highlights represent figures that have a negative impact on the company. A worrying prospect for stockholders.Research and development is an important part of any company. they just lose money.Revenues are falling drastically and year on year their net income decreases.
Balance Sheet (figures in millions of $) .
378 401 265 5.094 1.444 1.for 2008 Net Assets Total Current Assets Cash Accounts receivable Finance receivables for sale Finance receivables for investment Inventory Other Current Assets 594 296 2.357 2 3 TOTAL 7.176 758 175 5 6 . plant and equipment Others 1.829 Liabilities and Stockholders' Equity Current Liabilities Accounts payable Short-term debt 865 1.739 2.378 1 Property.604 4 Finance debt Pension and postretirement benefits Other long-term liabilities 2.
116 7 TOTAL 7.34 million square feet of production and assembly shop floor surface area around the central north of the USA. this could be due to the suppliers’ prices going up.829 1. 2.000 people working for HD and that number has not changed for some time. Also they have quite a big product development centre of around 400 000 sq ft.3.Too much debt from the financing service 6.300 of benefits per employee. The stock prices . Their corporate office is in Milwaukee. and double the amount in cash.They have some money owed to them. which is nearly a tenth of the total revenue.Nearly $84. The year 2007 was an all time high for HD as shown in the graph below.The total pot for the shareholders.Other unknown assets 4. etc… 5. they have around 9.109 Total shareholders' equity 2. 7.They have loads of creditors that they owe money to. Financial Review The figures on the profit loss statement show that there is clearly a big drop in net income. The total revenue only dropped nearly 300 million but their net income dropped by a staggering 40% over those 2 years. This also gives them higher morale and thus increasing productivity and quality of work.HD has a total of nearly 3. transport costs. where the company was started. They also have 3. 3.7millions square feet of production and assembly lines in other parts of the world (outside the USA).
just like the figures show on the tables. . This visually shows how much decline there is in the company. The worrying factor is that they have $2. thus the stock prices went crashing down. this was a panic time for them to try and get their bikes remarketed and to attract more people. Also on the P/L table. The lower sales volume year on year meant that their manufacturing costs went up. Also prices of steel went up considerably thus suppliers had to increase their prices. With increasing costs in overheads their profits were tumbling which then resulted in lower net income.6 Billion debt for 2008which accounts for nearly half of their revenue. the stock crashed and hit a rock bottom. There are 5 green points out of 15 highlighted issues between 2006 and 2007 while the period 20072008 shows only 2 green points and the rest are red. The recession hit in late 2008. also they had less bargaining power with their suppliers. the green highlights represent figures that contribute positively to the company and the red highlights represent figures that have a negative impact on the company. before then their stock price was fluctuating and then in 2009. at the end of 2008. Which falling sales they started spending more money on advertising but far less on R&D. meaning that less people had disposable income to be able to buy those kinds of bikes which were considered more as a leisure product.were at their highest which meant they had a good financial year.
This would mean that people could lose their jobs in the current manufacturing sites.Recommendations Improving Manufacturing Operations: The first thing to do in order to cut costs. the following points should be considered: breakdown of manufacturing operation. they should definitely stop their investment activities as this poses a problem of loss. They should keep all the good pay packages for their employees as this boosts up their morale thus improving productivity and quality in their work. it would be better to have a central manufacturing site with assembly lines within the same area. would mean cutting shipping costs and saving a lot of time and close the plant in Australia. But HD could help them with their move and even give them bonuses. In order to understand increase in costs and decrease in sales. as there would be far less logistical problems involved (far less costs). bargaining power. By having all those processes just meters away. costs investigate as of why suppliers increased costs (volume. Investment income: As the figures show. steel price) investigate why there is a high level of inventory investigate where there are bottle necks in the processes that slows their production rates down why isn’t there more money spent in R&D External Analysis: . would cut overall cost of the motorbikes. Having a wheel manufacturer in the USA especially in the state of Wisconsin.
and this alliance strengthen the global motorcycle business of both companies. Internal Rivalry • Harley Davidson is one of the most admired and recognized companies in the world but there are four major competitors mainly concentrated on these heavyweight motorcycle segments: in addition to Harley Davidson the other three are Yamaha . Some of the major competitors of Harley Davidson have larger financial and marketing resources and are more diversified. engineering. Honda is the main competitor of Harley Davidson in lap up some market share of Harley Davidson. design. • • • • • Rivals implicate the existing product of Harley Davidson and they are trying to lack behind existing product in automobile technologies (Honda and Yamaha) Harley Davidson does not have many shares in European market. .Five Forces: 1. Strategic alliance between Suzuki and Kawasaki in the areas of product development. and manufacturing of motorcycle.Suzuki Honda are Japanese companies.
• 3. Harley Davidson seeks main things from its supplier which are steel. Substitute Products: • • • • • Harley Davidson are luxury vehicles so that there is only few close substitutes for heavy weight motorcycles that could seriously affect the market. Suzuki . There is some small scale producers who are making these customers made motor cycle but the amount of their production is not a threat for Harley Davidson.which is the reasons why there are only four major competitors. basic electrical equipment and shipping of final motorcycles • • In completion with Harley Japanese’s manufactures key advantage was the scale advantage deriving from vastly greater volume. 5. The economies of scale are low in this segment . Power of supplier: • Harley Davidson has a wide range of suppliers. 4.2. and they are increasing the interest of motorcycles among the customers.Yamaha and Kawasaki are offering V twin Cruisers closely related to Harleys. Passengers cars . Power of Customers : . at lower prices with more advanced technologies. Honda. they can easily switch to the other suppliers without any problem in production. sports bike. sports bike scooter bikes are main the substitute of Harley Davidson. In case one of the supplier attempted to increase the price. The customers who are thinking of buying a heavy weight motorcycle are not seriously considering one of these options scooters. Potential entrants: • • In this segment entry barrier is very high because it needs a lot of capital investment and the industry is on maturity stage so that there are only four major competitors. In India Enfield can position as a small substitute.
The number of dealer worldwide are also less and there are also dependant to the individual customers . that cant affect Harley Davidson financial position. .• • • Consumers of Harley Davidson are individual customers so the financial position of Harley Davidson cannot be seriously affected. Economical: In many places in the world fuel prices are very high compared to US fuel rates and as fuel rates are always on the rise it may have an effect when buyers considering heavyweight motorcycles. Transport costs are also at a soar which may have an affect on sales. Pest Analysis Political: As Harley produces heavy weight motorcycles the market/industry it’s in is slightly narrowed by legislation in the U.S and Europe which requires users to have a full motorcycle license and relevant experience this automatically eliminates young riders between 16-18 and as far as insurance policies concern is that some models insurance companies simply won’t insure or will be relatively expensive for younger riders. Future legislations which may affect Harley motorcycles may be if new emission limit legislations are enforced and Harley being a heavyweight motorcycle may affect on some models. Harley Davidson and its customer’s relations are very strong. Other legislations that Harley motorcycles may face with noise limit regulations in some areas of the world as Harleys are very noisy motorcycles not many people or the law tolerates it. No political barriers are enforced with trade with US companies however countries in the middleast such as Afghanistan and Iraq may not be able to trade as as US product may not appeal to them due to their war history with the US.
as the market is targeted at 40+ with a wealthier income it has narrowed its industry potential however Europe being a portentous market as it is the second largest heavy weight motorcycle market in the world it is seen that 70% of this comes from performance bikes which Harley is missing out. Technological advances have pushed out the iconic air cooled engines from Harleys production into liquid cooled. People buying into Harley want not just the Harley experience but also look for the uniqueness and as far as Harley riders they wouldn’t want to be associated with aftershaves with Harleys name made by loreal. Harley doesn’t appeal to customers as a designer brand but does as individuality and the wrong approaches has been taken trying to achieve it. New technologies are always coming mainly from the far east and as their companies are from there it is hard for them to compete but also Harleys competitors have business in other areas so they can cross and share resources and technological developments. But as Harley doesn’t also own a car business it is already giving the japaneese a head start. Technological: Harleys competitors have pushed Harley to compete in technological advances in their products however for Harley to become as competitive with the far east in terms of technology will take a long time so therefore Harley is left lacking in technology in their products. PEST Factors Commentary Impact Effect Effect of Time Rating .D overheads also increasing depreciation levels to rise in assets. In Europe due to conditions and layout of road cruising motorcycles are not as adaptable to these conditions where as performance bikes are for the tight turns and windy narrow roads where as in America it has an Harley has an apparel associated with American culture big wide roads long straight roads in the middle of deserts suitable for cruising.The global rescession has had an impact on sales of motorcycles as Harleys main customer audience is focused on 40+ with a fairly high income with peoples savings and jobs being in jeopardy it had an effect on sales. Social: Motorcycles that Harley offers may be regarded as “old man” motorcycles due to their lack in performance and speed generally being built for cruising this segment of the market does not attract many younger riders. Also as inflation soared currency drop and cost of materials goes therefore increase in H.
It can have negative effect on the firm There are not much changes at the moment in the firm . High It is resulting in negative effect on the production and sales of the company Harley Davidson trying in various ways to overcome this problem Important . Important This factor also has a There are great impact some on the firm economical as it is a barriers for heavyweight the Harley motorcycle Davidson due company so to recession inflation can and fuel rates have some which are effect on the always on rise sales of . Critical High Social : Harley Davidson motorcycles may be offered as ‘old man’ motorcycles due to lack in performance. Intermediate Medium Technological Due to lack of Harley technology Davidson is Harley is lacking far lagging far behind in behind its technology .Political : In the case study there are no political barriers for Harley Davidson to trade with US companies Economical: This factor Has great influence on the firm Positive effect on the firm Possibly no change in the firm at the moment High It depends on the recession and inflation period but in near future it can have some serious effect on the sale of company. motorcycles. competitors. This factor also has a impact on the firm as the rider now look for uniqueness and best performance bikes which Harley are missing out. At the moment there is increase in price range of motorcycles. its market is not attracting younger riders.
• Harley Davidson has poor market techniques which is not attracting new customers in the international market. especially in the European market. • • • • • • It is the only American brand for heavy weight motorcycle manufactures. • Harley Davidson is a strong brand company and is well established in the mind of customers with the image of strength and freedom. to analyses the Strengths. Weaknesses.S Harley Davidson has strong and long lasting relations with the employees. Opportunities and Threats of a company. Weakness: • The main weakness of Harley Davidson is due to losing its market share continuously. and it also operate in providing financial services. Buell formed to endorse the brand and involve customers to beat their loyalty level. Strong market and distribution channel in U. The foremost strength of Harley Davidson is customer loyalty. • It has its operation in manufacturing motorcycles. Strategic Alignment: SWOT Analysis: SWOT is used. Strengths: • Harley Davidson has approximately 70% share regarding the heavy weight motor cycle market. Motorcycles customization makes up a major amount of revenue for Harley Davidson. .
it can be seen that Harley Davidson has many strengths this compares to a few threats identified.• • The prices charged on the motorcycles are quite high. • There is increasing demand in US market for bikes Threats : • • The average buying age of Harley’s bikes is 42 years old and increasing. In the recent years Loss in domestic market share and shortage of supply due to on-going capacity restraints. The weakness outnumber the opportunities though which would imply that Harley Davidson have to focus on realizing these opportunities to reduce and combat the threats. Conclusion: From applying the SWOT techniques. By analysing the future need of production heavyweight bikes is weak. The international heavy weight market is growing and is now larger than U. • Buell division needs to continue to produce a quality motorcycle under Harley’s brand name. . • • • Market share is increasing in Europe and Asia for the last two years. Opportunities: • The demand for Harley Davidson is the highest in European regarding the international market and represent the single largest motorcycle market in the world. • Some competitors of Harley Davidson have larger financial and marketing resources and these competitors are more diversified. due to which the required production amount is not targeted. Younger riders and women are becoming interested in bikes.S heavy weight market. Harley Davidson should expand European and Asian market. • The European Union’s motorcycles standards are more strict than those of environmental protection agencies in the US and increased environmental stand.
No real push to break into European market. • • Harley Davidson brand has developed a community based phenomenon. Harley’s long term profit growth depends on its ability to expand the sales of high. .priced heavyweight motorcycles.7 S’s The McKinsey 7 S Model Strategy : • Harley Davidson strategy is to control the market by increasing the sales of heavy weight motorcycle. • Heavy investment in new plants for manufacturing and development. R&D department to develop new products. • • • Harley Davidson main competitive advantage lay with super heavy weight bikes.
Keith Wandell CEO of Harley Davidson.2B). Employers are extremely loyal. Harley Davidson has a large frame work conducted with 19 organizations in a variety of industries across the America. Inc. • • Harley Davidson is a well-known manufacturer of heavy weight motorcycles in US. • Financial results logged and monitored to keep on track.3B to $4. has seen revenues remain relatively flat ($4.23% to 77. Harold Scott vice president of HR of the company. Arthur Davidson and Walter Davidson. though the company was able to grow net income from $55.1M to $146. A reduction in the percentage of sales devoted to cost of goods sold from 78. Structure : • Harley Davidson is a family run business founder by William Harley and Brothers William Davidson. . • System: • Hierarchy in place with Directors overseeing activities and decision making going through Paul Stroud. Style : • Harley-Davidson is one of the most admired and recognized Companies in the world today. • No defined hierarchy stated in the case study however these positions are stated: the founders are William Harley and Brothers William Davidson.82% was a key component in the bottom line growth in the face of flat revenues.5M. • Harley-Davidson. Europe and Asia/Pacific.
union representatives elected representatives from the process groups and six staff members. • Harley Davidson is strongly reliant on super heavyweight motorcycles.• Harley Davidson has considered the American icon by people and US government . Production is by 8 to 15 member natural work group. Overall plant management is by a 14 member plant leadership comprising the plant manager. Staff: • • Harley Davidson has an energized work force. Skills: • Dealer relationship continued to be a strategic priority for Harley Davidson. • • Good shift pattern with flexible staff to cover emergencies. . Harley Davidson is Non-aggressive non-ambitious company. structured around a family business model. • HOG has played a critical role in building in building brand image and customer loyalty. • Harley Davidson has achieved greater success in penetrating international market. Emphasis are placed on developing g manufacturing capabilities. Managers in place at each major function. • • Harley Davidson has a strong relationship with its loyal employees and customers. • Investment is done in the various plants for advanced technologies and capacity expansion. The entire plant is organized into two teams.
Skills and Style areas. • Maintain employment at all sites.• Good customer services and liaison. This configuration must be aligned to have a successful company. Conclusion of 7 S Analysis: The 7s model shows the company in its current state. including support for rush order. The 7 S strategy tool has identified key attributes within each area. Strategic Decisions . to align this tool correctly the Strategy. Structure and Systems group must engage with the ‘people’ issues within the Staff. Shared value: • Market leading quality product. • Maintain of their brand market.
Aggressive. Marks from 1 (low) to 6 (high) Financial Strengths: Their cash amount is increasing year on year which suggest more money to spend around if needed Have assets worth $7. Not many innovations have been issued by HD during 8 years and not much new advancement have been made which means the competition had plenty of time to develop better products. [RATING: 4] Strong brand and strong relationship with customers [RATING: 4] Overall rating 3+4+4=11 : 11/3=3. [RATING: 2] Products are sold around the world through more than 1000 HD dealerships. Defensive. All those categories will have a total mark and then plotted onto the two axis from which the company’s position will be determined each quarter will represent Conservative. They - . most being in America and secondly most being in Europe so they can reach their two main markets.Space analysis The SPACE analysis wills breakdown four major areas which will be given a mark and then plotted onto a graph in order to determine what a company’s strategic position is.7 - - Environmental Strengths: Research and Development department is present and has its own lab but investments within this asset have fallen since 2007 when it received a big boost.8 billion Investment capabilities [RATING: 4] over all Competitive Advantage: Harley Davidson is a major leader in the American heavyweight motorcycle market. more special for the customer. Competitive Advantage. and Industry Attractiveness. Environmental Strengths. Those main points to be analysed are: Financial Strengths. or Competitive strategies. and is the pioneer of the whole cruise bike and chromed parts culture but there is big competition from other huge Japanese corporations [RATING: 3] They can offer a wide range of parts in order to customise motorbikes for each client in order to make it bespoke. Harley is more of a differentiator than the other companies but could end up cost more.
The competitors have their own dealerships but they mix with their other products such as cars or are sold through dealers that sell many brands. [RATING: 5] Increase of women riders [RATING: 3] Overall rating: 4+4+3+5+3=19 .CONSERVATIVE There are many events organised by Harley for their owners such as. [RATING: 3] Overall rating: 2+5+3=10 .also have the factory in Brazil for the South American markets which is a strength. They are the original. the real deal.8 Industry Attractivenes s SPACE Model: DEFFENSIVE COMPETITIVE Environmental Strengths . 19/5=3. 10/3= 3. Also this could be good as Financial Buell buyers can be lead on to later in life to buy a Harley Strength [RATING: 4] - AGGRESSIVE . resulting in transportation cost and increase in lead time. [RATING: 4] HD offers the possibility for younger buyers to get a Buell motorbike (sportier) as a substitute while not affecting HD’s finances because they own the brand.3 - Industry attractiveness: Harley Davidson is a pioneer in the motorcycle industry offering virtually limitless customisation for their products while bigger competitors offer less and just imitations of HD. gatherings and cruises. They have instituted a new programme where they are joining more factories together. Other competitors cannot offer this kind of experience. also same kind of club for Buell owners. [RATING: 3] Competitiv e Advantage There is growth in the international heavy weight motorcycle market. [RATING: 5] Most of their manufacturing and assembly facilities are all situated in the state of Wisconsin where their headquarters is. Their major concern is their wheel manufacturers located in Australia. This is supposed to enhance the over all experience and make it all feel like doing something as a “family”. But some other two plants are situated in near by states. So HD is only focussed on bikes.
The space model shows that the company are fairly centralized however in order to differentiate they need to become more of an aggressive strategy. Priorities: .
The lightweight segment also shows opportunity in order to compete H. H. slowly Harley adapted just a few bits of new technology and implemented them onto their products.D. should keep their engine and power train production in America as this is what customers pay for is all American made product. H. All that said. HD should look further into aiming certain products at females as identified the female riders are increasing in the market. They could reduce costs greatly by having a more unified manufacturing and assembly site.D. Overall Harley Davidson could improve certain aspects in order to increase capacity. also concentrate on protecting the prosperity of the brand and not alliancing with companies like loreal as these type of marketing is not right for its aimed consumers. create more demand and improve its financial situation. H. They also improved their dealership network by training their partners to enhance their customer services and have higher stock levels.D shows strengths in many areas and the opportunities identified in the market. Bibliography & Reference Sources . The European market shows an opportunity however the product line must be adjusted to meet European customer demand and expectation as their current models may not be highly appealing. needs to step up their technology and performance integrated into the lightweight products.D has a very strong brand this can be used to back their other lines Buell and MV Agusta. Conclusion: By using different tools to analyse the Harley Davidson situation the following was concluded: Harley Davidson is a differentiator company which sells in lower volumes to a broader market. there is vast room for improvement. They have proven to adapt to economic and time changes by using new production methods in order to improve quality and quantity.D. should offer exclusive lines of updated classic models as this will keep uniqueness for the loyal enthusiast customers.Using from the overall analysis findings H. However the competition always advanced and remained ahead of them in technological developments. By doing this they could finally reach a standard accepted by their target market.
asp?ticker=HOG:US http://www.articlesbase. Wheelen and J.com/grant/files/CSAC05.pdf http://www.com/ http://www.html Book: Strategic Management and Business Policy by Thomas L.harley-davidson.org/partners/harley_davidson.businessweek.com/research/stocks/financials/financials.php http://investing.http://www.com/motorcycles-articles/harley-davidson-symbolizes-the-spirit-offreedom-and-strength-867579.blackwellpublishing. David Hunger Eighth Edition .networkofstrength.