Harley Davidson Inc. 2008: Thriving Through a Recession, Case 16

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Harley Davidson Inc. 2008: Thriving Through a Recession, Case 16 Mgmt 479A, Week 3 Dropbox 1
November 13, 2011

Harley-Davidson is a 105 year old motorcycle manufacturer. William Harley and Arthur Davidson decided to design and build a motorcycle in 1901. By 1903, they had built and sold three motorcycles and in 1907, the Harley-Davidson Motor Company became incorporated. The company was acquired by AMF Inc in 1969, but the main focus was on short-term profits which inevitably sent consumers elsewhere and in 1981, Vaughn Beals lead a leveraged buyout to get Harley-Davidson out from under AMF.

Under new management, the focus changed towards production and consumers. The research and development department picked up momentum and during the early 1990’s they decided to invest in Buell Motorcycle Company providing them entry into sport/performance motorcycle market. By 1996, the company decided to gear all of its attention to the motorcycle business. This meant eliminating the Transportation Vehicles segment which sold for about $105 million. 1997 brought significant changes internally and the launch of new products with the help of an intense procurement expert named Garry Berryman.

James L. Ziemer worked for Harley-Davidson for 38 years before replacing CEO Jeffrey Bluestine when he retired in 2005. The Harley-Davidson name had been finding itself in places like Forbes “Company of the Year” and ranking on Business Week/Interbrand Annual Rankings Top 100 Global brands and on Fortune’s list for “Most Admired Companies.” By 2008, the recession was playing it toll and raising question about what was in store for the Harley-Davidson Company. Resources:

Brand Name: Harley-DavidsonSuppliers
International dealershipsFinancial Capital
Buell Motorcycle CompanyManufacturing Locations
H.O.G. & BRAGE-Commerce
Financial Services: HDFSJane Magazine
Raw materialsInnovation: CAD System, MAN System
Talented Managers: Ziemer, Berryman, Bluestine
Human Resources: skilled employees, union & non-union workforce, board of directors Technological Resources: patents, trademarks, trade name
RecruitingResearch & Development
Manufacturing MotorcyclesMotorcycling Lifestyle
Marketing & DistributionRider Training & Safety
Precise production schedulesStrategic Management
Strategic Alliance
Core Competencies
Strategic AlliancesResearch & Development
Manufacturing MotorcyclesBrand Name
H.O.G. ClubMotorcycling Lifestyle
Rider Training & SafetyPatents, Trademarks, Trade Names Financial Services: HDFS

Finding of Fact #1:
Harley-Davidson’s core customer base is shifting as the baby boomer population is aging. Recommendation/Justification:
In 2006, the average age for purchasing a Harley-Davidson was about 47 years old with a median household income of $82,100. Of those purchased, 88% were made by men, while only 12% were purchased by women. Buell was off to a good start in 2000, by producing the Buell Blast because it was not only considerably smaller, it was more light weight in comparison to the traditional heavyweight models and it was less expensive. Statistics were showing the median age on this bike purchase was around 38 years old and 50% were purchased by females. Focus is turning to smaller segments for women and younger generations.

I think these statistics could send Harley-Davidson down the right path. More time and money need to be put into research and development to figure out, not necessarily what females want, but what they physically need in order to have a safe and exciting ride. My co-worker and her husband purchased a Harley a few years ago and shortly afterward, she decided to get her motorcycle license. She never drove it however because the motorcycle was physically too heavy for her to operate.

I believe Harley-Davidson needs to make more of a marketing effort to appeal to 20...
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