I. Company Profile / Summary (Brief)
Harley Davidson Inc. is an American motorcycle manufacturer. Harley Davidson specializes in the sales of heavyweight motorcycles that are designed for cruising on highways. Harleys have a distinct design and exhaust sound that have appealed to a mass market of customers all over the world. Harley Davidson has relied on a strong fan base for sales of their motorcycles and apparel. They currently offer five different models of motorcycle to try and appeal to all different types of consumers. Their specialty is the “chopper” type of motorcycle. Harley Davidson has gone through numerous battles over the years to try and protect its name and reputation. Currently, Harley Davidson is thriving having revenue of $5.31 billion for the year 2011.
II. Situational Analysis
A. General External Environment (Analysis Required to Determine DFC’s, and KSF’s) • Sociocultural
• Generational issues were a big factor to the success of Harley Davidson. Now that the baby-boomer generation was becoming older, they had an issue of trying to appeal to the younger generations. • Quality control was another issue that Harley Davidson encountered over the years. Following the 1981 leverage buyout, Harley’s new management introduced a total quality control program. This program relied on detection of defects earlier than the preexisting program which only detected defects prior to delivery. This new program helped transfer the responsibility of quality from the managers to the workers. • Technological
• There are numerous advancements in technology in the motorcycle industry throughout the years. Harley had to deal with these changes by being innovative with their products and implementing these advancements into their motorcycles. This, in return, helped Harley create a higher quality, more efficient motorcycle. • Demographic
• The population size for Harley Davidson was decreasing as the baby-boomer generation was aging. They had to find a way to appeal to a brand new customer, younger generations. • Through changes in the ethnic mix in America and culture over the past 30 years, Harley has had to adapt. Harley had to now take other cultural ideals in to consideration since the population of some races has grown over the years. • Economic
• Throughout the years, there have been periods of economic growth and recession that Harley has had to ride through. • There have been times that Harley has had a surplus or deficit and had to act accordingly with the times. Whether it meant that they had to be more aggressive and innovative or conservative. • The gross domestic product had an effect on Harley, as they have contributed greatly over the years to the United States’ GDP. • Global
• Harley Davidson has had to look at global issues like a meltdown of a global market as it could affect the sales of motorcycles globally. • Harley also has to monitor trade policies since they are now a global industry and earn much of their revenue overseas.
B. Industry Analysis (define the industry)
• Threat of New Entrants and Barriers to Entry • New entrants in the motorcycle industry have been limited over the years since there is a heavy brand loyalty among the existing companies. Brands like Harley, Yamaha, and Suzuki command huge brand loyalty among their respective customers. • The economies of scale help thwart off any potential entrants as each company is purchasing supplies in bulk and reducing costs through mass production of motorcycles....