Strategic Management and Policy Case Study of Harley-Davidson Inc

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Strategic Management and Policy
Case Study of
Harley-Davidson, Inc.
August 19, 2006

In 1903, a legendary motorcycle company was formed when William S. Harley and the Davidson brothers, William D., Arthur and Walter, handcrafted their first three motorcycles. In 1909, Harley-Davidson introduced the first V-Twin engine, which is still the company standard to this day. From 1917-1918, the company supplied 20,000 motorcycles for the military during World War I, and during this time major design advancements of motorcycles were made with Harley-Davidson as the leader. By the end of the Great Depression, only Harley-Davidson and Indian (Hendee Manufacturing) were the sole U.S. motorcycle manufactures that survived through the 1930's. Throughout the 1940's, Harley-Davidson supplied more that 90,000 motorcycles to the military for World War II, added additional facilities and started to decertify by selling apparel – the classic black leather jacket. After Indian closed in 1953, Harley-Davison was the sole American motorcycle manufacture for the next 46 years. Private ownership ended in 1965 whit their Initial Public Offering and four years later, the company merged with American Machine and Foundry (AMF).

By the early 1970's, huge numbers of lower-priced Japanese motorcycles were being imported into the U.S., and these firms were able to capture a large portion of Harley's market share. Additionally, due to Harley's rapid production expansion, the company was experiencing quality problems. In 1981, thirteen members of Harley-Davidson's senior management purchased the company from AMF in a leverage buyout and implemented new quality management and manufacturing methods. The company successfully petitioned the U.S. federal government, relying on recommendations from the International Trade Commission (ITC), to impose additional tariffs on imported Japanese motorcycles (over 750cc's) for five years starting in 1983. Harley-Davidson, Inc. again...
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