Harley-Davidson Inc. 2008 Case Analysis

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Case Analysis # 19
Harley- Davidson Inc. 2008

I. Current Situation
A. Current Performance
* First decline in 20 years
* Leads industry in domestic sales
* Increased share of foreign markets
* Strong, highly recognizable brand name and trademarks

B. Strategic Posture
1. Mission
* 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. Buell’s Mission

* To develop and employ innovative technology to enhance “the ride” and give Buell owners a motorcycle experience that no other brand can provide. 2. Objectives
* Increase market share both domestic and international
* Grow production during a down economy
* Gain new and younger customers
* Maintain operational efficiently
3. Strategies
* Grow H.O.G. and BRAG organizations with new memberships and chapters * Open the Harley-Davidson Museum
* Expand Rider’s Edge New Rider Course to more states and countries to bring in more first time riders * Establish and maintain long-term relationships with suppliers, focus on collaboration 4. Policies

* Invest in research and development to lead the market and develop products * Utilize just-in-time inventory, employee involvement, and statistical process control * Protect patents and trademarks

II. Strategic Managers
A. Board of Directors
1. Eleven members
2. Well respected, half on board since mid 1990’s
B. Top Management
1. Promoted from within
2. Brought company back to life
3. Responsible for current success
III. External Environment
A. Natural Environment
* Seasonal variations
* Market saturation

B. Societal Environment
1. Economic
* Weak Dollar
* Pending Recession
2. Technological
* Younger and international markets demanding sleeker faster bikes 3. Political-Legal
* EPA compliance
* CARB compliance
* International emissions, noise, and safety standards 4. Socio-cultural
* Aging ridership
* Easily deferred purchase
* Growing segment of competition

C. Task Environment
* North American market aging, younger riders want faster lightweight bikes. * Brand name recognition high, large grow potential in international markets * Maintain integrity of brand while striving to reach the youth market * Rivalry Low in domestic markets, high in international markets * Power of Other Stakeholders Medium, quality, safety, environmental regulations increasing * Threat of substitutes High

* Entry barriers Low

IV. Internal Environment
A. Corporate Structure
* Divisional structure: motorcycle and related products largest business segment, Financial Services separate segment * Centralized major decisions by Harley-Davidson Top management

C. Corporate Resources
* Constants in business success close to customers, growth, and operational excellence * Approximately half of the 9,000 Harley-Davidson employees ride a Harley-Davidson motorcycle * Acquired Buell and Financial Services to expand into new markets and allow financing for distributers and customers. D. Corporate Resources

1.Marketing
* Efforts divided among dealer promotions, customer events, magazine and direct mail advertising * Public relations, cooperative programs with dealers, and national television advertising * Sponsors racing activities, promotional events, and participates in all major motorcycle shows and rallies 1. Finance

* Revenues down slightly, operating income down slightly
* Financial service income up slightly
* Unit shipments down
2. R & D
* Viewed as significant factor in its ability to lead custom and touring motorcycling market * Expenses of $185.5 million in 2007, $177.7 million in 2006, and $178.5...
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