Harley Davidson was seen in America as a company that produced motorcycles with “raw power.” The company was founded by Arthur and Walter Davidson and William Harley in 1903. In 1918, Harley Davidson had become the largest motorcycle producing company in the world. Their production totaled 28,000 motorcycles. Production continued to increase with the onset of World War II and the military use of Harley’s motorcycles. The mystique of the product had a tough sense to it with famous actors such as James Dean and Marlin Brando sporting the bikes. After World War II, foreign competitors became interested in the motorcycle market. Japanese competitors entered the market in 1959; Harley Davidson executives did nothing to counter the advance of the competition. Harley Davidson’s share of the industry began dropping while Japanese competitors introduced high quality products. The confidence in Harley’s reputation was causing the firm’s market share to decline steadily.
AMF Years Harley Davidson lacked resources to finance new products and designs to expand their production. They were taken over by AMF, a heavy-industrial conglomerate. At this time there was high demand for motorcycles in the U.S. The AMF team thought that they would be able to sell anything they produced, even without taking quality into consideration. After the take over, production was increased drastically at the cost of the quality of the product. AMF began spending large amounts of money on Harley’s manufacturing plants. Production increased from 15,475 units in 1969 to 70,000 units in 1973 due to these new expenditures on capital. To make things worse for Harley, the Japanese firm Honda introduced the “Goldwing.” This was the first introduction of a foreign “heavy weight” motorcycle that would directly compete with Harley’s market share. With Harley Davidson’s share of the heavyweight market beginning to decrease, the quality of their products also decreased because
References: Buller & Schuler. (2006). Managing organizations and people. U.S.: Thomson South Western. Judge, J. A., & Robbins, S.P. (2008). Organizational behavior (13th edition). New Jersey: Prentice Hall.