Harley - Davidson case review
Hartley Highlights: Harley-Davidson
Essential Facts
Harley-Davidson had a 70 percent share of the motorcycle market in its first 60 years.
The introduction of the Japanese motorcycle by Honda dropped Harley’s market share down to 3 percent by 1982.
AMF bought into Harley in 1965 in an attempt to fix the company. They sped up production, which decreased quality. They put Harley up for sale in 1981.
Vaughan Beals, vice president of motorcycle sales, led a team that purchased the division from AMF.
In 1983 Congress increased the tariff on Japanese motorcycles from 4% to 45%, which significantly helped Harley.
Vaughn Beals drove a Harley around to rallies where he met Harley owners and would listen to their concerns.
Beals visited Japanese plants and realized their key to success was professional managers who understood their business and paid attention to detail. Based on these observations Beals started making culture changes at Harley.
Harley needed to communicate these changes with the public so marketing moves were made. They developed a new customer base called Rubbies – the rich urban bikers.
This brought Harley back to a leading position in the industry by 1989. Harley was now so successful that they could not keep up with demand.
Harley won “Company of the Year” in 2002 and celebrated its 100th birthday in 2002.
Lessons Summary
There are several lessons that can be learned from the Harley case. There are three that stand out to me: A company cannot become complacent, a company cannot solve a problem by throwing money at it and a strong leader along with a change of culture can bring a company back from the brink of extinction.
Harley-Davidson had a 70% market share in its first 60 years of existence. During this time the company became complacent. When Honda essentially invades their market Harley did not react. They assumed that Honda was no threat and they could continue business as usual. They had become complacent and this was
Essential Facts
Harley-Davidson had a 70 percent share of the motorcycle market in its first 60 years.
The introduction of the Japanese motorcycle by Honda dropped Harley’s market share down to 3 percent by 1982.
AMF bought into Harley in 1965 in an attempt to fix the company. They sped up production, which decreased quality. They put Harley up for sale in 1981.
Vaughan Beals, vice president of motorcycle sales, led a team that purchased the division from AMF.
In 1983 Congress increased the tariff on Japanese motorcycles from 4% to 45%, which significantly helped Harley.
Vaughn Beals drove a Harley around to rallies where he met Harley owners and would listen to their concerns.
Beals visited Japanese plants and realized their key to success was professional managers who understood their business and paid attention to detail. Based on these observations Beals started making culture changes at Harley.
Harley needed to communicate these changes with the public so marketing moves were made. They developed a new customer base called Rubbies – the rich urban bikers.
This brought Harley back to a leading position in the industry by 1989. Harley was now so successful that they could not keep up with demand.
Harley won “Company of the Year” in 2002 and celebrated its 100th birthday in 2002.
Lessons Summary
There are several lessons that can be learned from the Harley case. There are three that stand out to me: A company cannot become complacent, a company cannot solve a problem by throwing money at it and a strong leader along with a change of culture can bring a company back from the brink of extinction.
Harley-Davidson had a 70% market share in its first 60 years of existence. During this time the company became complacent. When Honda essentially invades their market Harley did not react. They assumed that Honda was no threat and they could continue business as usual. They had become complacent and this was