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CASE

19
HARLEY-DAVIDSON MISSION STATEMENT

Harley-Davidson Inc. 2008:
THRIVING THROUGH A RECESSION
Patricia A. Ryan and Thomas L. Wheelen
We fulfill dreams through the experience of motorcycling by providing to motorcyclists and to the general public an expanding line of motorcycles, branded products and services in selected market segments.1

IT WAS A PRETTY AMAZING SIGHT, DOZENS AT A TIME, THOUSANDS IN A DAY DESCENDING ON THE Sinclair gas station and Western café in Lusk, Wyoming, on their way to the 2008 Sturgis rally in the blistering heat of early August. Lusk, a town of 1,348 people that lies 147 miles southwest of Sturgis, saw bikers from all walks of life, needing fuel and small supplies, some with tattoos, some with leather to protect themselves from the winds as they cruised at 60 miles per hour along Highway 18 toward Sturgis. Some clearly were businessmen on a weeklong reprieve, others were rougher in appearance. The one thing they all had in common was the love of the ride . . . the ride of the Harley-Davidson motorcycle. There were new issues facing Harley-Davidson in their 105th year of operation. Consider the weak dollar, the probability that retail sales would continue a downward spiral, which in turn would cause excess inventory of high priced motorcycles. Then there was the customer base: the rockers who grew up in the sixties and seventies are graying and this threatens the growth of Harley-Davidson. As riders approach sixty, it is important for Harley-Davidson to recruit new riders of the younger generations. Their emphasis on recruiting women has been instrumental in recent years. They were faced with an aging baby boomer population and needed to focus on growing smaller segments of their business—women bikers and younger bikers, the latter who could not traditionally afford a Harley-Davidson motorbike. Many things were looking good for the 105-year-old motorcycle manufacturer; however, President and CEO James Ziemer needed to continue the company’s strong growth as many economists felt the economy was heading into a recession. Harley-Davidson had opened their first dealership in mainland China, and named Beijing Feng Huo Lun as the first authorized dealer. A Harley-Davidson museum was due to open in 2008 and sought to attract upwards of

Copyright ©2008 by Professor Patricia A. Ryan of Colorado State University and Thomas L. Wheelen, Wheelen Strategic Audit. This case cannot be reproduced in any form without the written permission of the copyright holder, Patricia A. Ryan. This case was edited for SMBP-13th Edition. The copyright holder is solely responsible for the case content. Reprint permission is solely granted to the publisher, Prentice Hall, for the book Strategic Management and Business Policy—13th Edition (and the International and electronic versions of this book) by the copyright holder, Patricia A. Ryan. Any other publication of the case (translation, any form of electronics or other media) or sale (any form of partnership) to another publisher will be in violation of copyright law, unless Patricia A. Ryan has granted additional written reprint permission. Reprinted by permission.

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SECTION D

Industry Four—Transportation

350,000 tourists per year. CEO and President Ziemer worked his way up the ranks, starting 38 years ago as a freight elevator operator and most recently serving a 14-year stint at CFO, but now at the driver’s seat, he faced a different set of responsibilities. As noted by one analyst, There are indications that Harley-Davidson is at a turning point. “It’s a well managed company with still one of the strongest brand names in consumer products, but I just question whether the company can grow its production 7 to 9 percent in an environment where demand doesn’t seem to be growing at that rate” Ed Aaron, analyst with BRC Capital Markets2

History

3

In 1901, William Harley (age 21), a draftsman, and his friend, Arthur R. Davidson,...
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