Executive Summary –Harley Davidson Strategic Plan
The motorcycle industry is a consolidated industry. The U.S. and international heavyweight motorcycle markets are highly competitive. The major players, such as Yamaha, Suzuki, and Honda, generally have financial and marketing resources that are substantially greater than the non-major players. Competitions in the heavyweight motorcycle market are based on several factors; price, quality, reliability, styling, product features, customer preference, and warranties. Harley’s first segment is motorcycle and related products business which includes designing, manufacturing, and selling heavyweight touring and custom motorcycles products, parts, and accessories. The custom products charge a higher price because of its features, styling, and high resale value. Their target market is mainly in the United States. By the end of 1997, they have an approximate 48.3% share in the United States market, 6.1% share in European, and 16.5% share in Asia/Pacific. New competitors have entered the marketplace because demand for the motorcycles has exceeded production. The demand is prospected to grow in the future, and the switching cost is low. The company should continue to build their enterprise. Since the industry does not have significant economies of scale, growth-via-acquisition strategy could be used. Harley-Davidson can merge or acquire weaker rival or smaller players. Taking over the weaker and smaller players will increase the entry barriers (echeat, 2008).
The Harley-Davidson company was created 1903. The company was acquired by AMF Inc, which favored short-term profits instead of investing in research, development and retooling. Harley-Davidson’s focus was on sales, while competitors were continuously improving the quality of their motorcycles (echeat, 2008). This resulted in a downturn of the company with weak profits. Harley-Davidson Inc. acquired the Buell Motorcycle Company during 1993. This investment offers Harley-Davidson the possibility of gradual entry into the sport and performance motorcycles market (echeat, 2008). “Harley-Davidson Inc. operates in two business segments: Motorcycles and Related Products and Financial Services. These two segments offer different products and services, and they are managed separately. However, the financial service works as a complementary for the Motor Company “(echeat, 2008, p.1). Harley-Davidson’s customers are primarily middle aged married males with some degree of education. The majority of buyers purchases a motorcycle for recreational purposes and is experienced motorcycle riders. Harley riders are loyal to the Harley brand, quality, and style. Since the consumer switching cost is not high the consumer has medium to high power to choose the product and the supplier has medium to low power (echeat, 2008). The power of a threat of substitute products is medium since there are other products, such as bicycles and recreational cars that serve similar customer needs. Since most Harley motorcycles purchases are for recreational purposes all other recreational entertainments are possible substitutions (echeat, 2008). “Every country has environmental control requirements relating to air, water, and noise pollution. This affected the way Harley-Davidson had to run business operations. The company had to ensure that the facilities and products complied with all applicable environmental regulations and standards. Certain levels of cost are required for the company to deal with this issue” (echeat, 2008, p.1). Vision Statement
“Harley-Davidson is an action-oriented, international company. A leader in its commitment to continuously improve the quality of profitable relationships with all of its stakeholders. Harley-Davidson believes the key to its success is to balance stakeholder interest through the empowerment of its employees to focus on value-added activities” (Marketline 2008, pp. 11)....
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