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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.

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MISSION analysis

COMPONENTS YES / NO

CUSTOMERS YESPRODUCTS & SERVICES YES

MARKETS YES

CONCERN FOR SURVIVAL YES

TECHNOLOGY NO

PHILOSOPHY YES

SELF CONCEPT YES

CONCERN FOR PUBLIC IMAGE YES

CONCERN FOR EMPLOYEES NOMISSION STATEMENT EVALUATION MATRIX

PROPOSED MISSION

To be branded as the best motorcycle available in the world.

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PROPOSED VISION

The best quality motorcycle, motorcycle products and financial

services will be provided worldwide 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 Harley-Davidson 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. Harley-Davidson do our part in

supporting all environmental laws in every country we do business. Determination

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

EXTERNAL ANALYSIS

PESTLE

• Harley-Davidson is one of the most admired and recognized

companies in the world today.

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• Academy of Motorcycling for those interested in learning to

ride a motorcycle.

• “Riders-Edge” the motorcycling academy of Harley-Davidson

introduced more than 1000 aspiring motorcyclists to the sportin 2000.

• Average purchaser of a U.S Harley-Davidson motorcycle is a

married male in his mid-forties

• Average purchasers of a U.S Harley-Davidson have a

household income of $78,600.

• Over two thirds of the sales of Harley-Davidson motorcycles

are to buyers with at least one year of education beyond highschool.

• 30% of the Harley-Davidson buyers have college degrees.

• Only about 9% of Harley-Davidson U.S retail motorcycles are

to women.

• Confidence in economy is directly proportional to the

purchasing of consumer items.

• Repeat business is strong as about 42% of motorcycle

purchasers have owned a Harley-Davidson previously.

• U.S Government and People are considering Harley-Davidson

as an American icon.

• Opportunities in emerging economies [India, China] but

uncertain operating situations.

• A new assembly facility opens in Manaus, Brazil, the first

operations outside of the U.S, reduces taxes, make them more

affordable to a larger group of Brazilian customers.

• Harley-Davidson is one of the main manufacturer and user of

V-ENGINE configuration.

• Harley-Davidson’s have a wide variety of products according

to Standard, Performance, Touring & custom.

• Harley-Davidson is facing some legal problems in Asian

countries, in India there is 60% tariff and various other taxes

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will cause the price of the bike to double.

Noise pollution and some emission standards of Harley-Davidsonbike is not up to the level of some countries across the globe.

Five Forces

Internal Rivalry.

• Four major competitors are mainly concentrated on these

heavyweight motorcycle segments: in addition to Harley-

Davidson the other three are Yamaha, Suzuki, Honda all are

Japanese companies.

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• Some of the major competitors of Harley-Davidson have larger

financial and marketing resources and are more diversified

(Example: Yamaha, half of its revenue is only from

motorcycles).• Polaris (American snowmobile/ATV manufacturer) producer of

“Victory” motorcycles priced its motorcycles below the Harley-

Davidson motorcycles.

• Strategic alliance between Suzuki and Kawazaki in the areas

of product development, design, engineering, and

manufacturing of motorcycles, this alliance strengthened both

companies’ global motorcycle businesses.• Honda, the main competitor of Harley-Davidson in U.S eat up

some market share of Harley-Davidson.

Potential entrants

• Entry barrier is very high is this segment, because this

segment needs a lot of capital investment and the industry is

on a maturity stage, so that there is only four main

competitors.

• The economies of scale are low in this segment, which is the

reason why there are only four major players.

• There is some small scale producers, who are making these

custom made motor cycles but the amount of their production

is not at all a threat for Harley-Davidson, and they are

increasing the interest of motorcycles among the general

public.

Substitute products

• Harley-Davidson motorcycles are a luxury vehicle, so that

there is only a few close substitutes for heavy weight

motorcycles that could seriously affect the market.

• Passenger cars, sports bikes, scooter bikes are the main

substitutes of Harley-Davidson motorcycles.

• The people who are thinking of buying a heavy weight

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motorcycle are not seriously considering one of these options,

scooter, sports bike.

• In India Enfield can pose as a small substitute.

Power of suppliers• Steel, basic electrical equipments and shipping of final

motorcycles are the main things Harley-Davidson seeks from

suppliers.

• Harley-Davidson has a wide span of suppliers, so that if one

supplier attempted to increase the price, they can easily

switch to the alternate suppliers without any problem in

production..

Power of Customers

• Consumers of Harley-Davidson motorcycles are individual

customers, so that they can’t seriously affect Harley’s

financial position.

• The numbers of dealers around the globe are also less and

they are also dependent to the individual customers, that

can’t affect Harley-Davidson’s financial position.

STRENGTHS

Net income of 2003 was $760mn, its more than 30% as

compared to the previous year 2002. The standard and performance segments of Harley Davidson

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make up 70% of the European heavy weight motorcycle

market

Harley-Davidson operates in two segments: Harley-Davidson

motorcycles & related products and HDFS (Harley-DavidsonFinancial Services).

Harley-Davidson is the only major American heavyweight

motorcycle manufacturer.

Strong brand name.

The HOG (Harley Owners Group), which have a 7,50,000

members world

Buell Riders Adventure Group (BRAG) was also formed recent

Customization of the bikes, this is Harley-Davidson’s major

revenue maker.

Harley-Davidson have a good marketing division and its

divided as dealer promotions, customer events, magazine and

direct-mail advertising, and public relations.

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.S).

They didn’t yet start its sales in India, one of the biggest

markets.

Required production is not met, analyzing the future of

Heavyweight motorcycle market .

OPPORTUNITIES

The European demand for Harley Davidson is the highest in

the international market and represents the single largest

motorcycle market in the world.

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Women and younger riders are increasing becoming

interested in bikes

The international heavy weight market is growing and is now

larger than the U. S. 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.

SWOT matrix

Opportunity Threat

SO Strategy: ST Strategy

EXPAND PRODUCTION TO

EUROPE

INCREASE STRONG BRAND

NAME

Strength

EXPAND PRODUCTION TO

ASIA

INCREASE MARKET TO

YOUNGER CUSTOMER

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WO Strategy WT Strategy

IMPROVE EMPLOYEE

RELATIONSHIP

Weakness

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BCG MATRIX

RELATIVE MARKET SHARE: 48%

GROWTH RATE: 13.029

STRATEGY: MARKET PENETRATION, MARKET DEVELOPMENT,

PRODUCT DEVELOPMENT, DIVESTITURE.

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STRATEGY RECOMMENDATION & IMPLEMENTATION:

MARKET PENETRATION

Get some more market share from the existing market, likeU.S, U.K, and Japan etc through more marketing techniques

like advertising. 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.

Competition is high in this segment mostly in U.S so market

penetration can be a good choice for the company.

Expand the HOG (Harley Owners Group) to Asian countries, if the company can provide the customer satisfaction that they

are providing to the U.S customers to the Asian customers

they can increase the sales.

PRODUCT DEVELOPMENT

Younger generation and female are now coming to this

segment so expand the motor cycle segments to younger

generation and females.

In Europe they can increase or expand the Buell’s market

share by introducing new motorcycles.

MARKET DEVELOPMENT

Harley-Davidson can bring in their vehicle to Asian countries

like India and China, because these countries have a high

population and the market potential is also high.

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, and its difficult that taxes and levis are high in India so

starting new plant in India can solve this problem.

Negotiations with the Government can solve these problems.

DIVERSIFICATION

Bring in new vehicles to new markets like India and China is a

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good choice, but it’s too costly.

Bringing new types of recreational vehicles is a best choice.

RECOMMENDATION Expand European and Asian market.

Increase the sales of Buell sport bike and Harley-Davidson to

younger customers and females.

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.

Concentric diversification: Bring in new recreational vehicles.

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.

MEASURING ORGANIZATION PREFERENCES

Analyze all financial ratios (current and the future).

If any advantage, then implement the new strategy, otherwise

continue with the present one.

Reference:

Strategic Management Concepts and Cases; Fred R. David, 10th & 12th

Edition.

www.harley-davidson.com

www.google.com

http://www.harley-davidson.com/

http://www.google.com/

http://www.harley-davidson.com/

http://www.google.com/

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