Harley-Davidson Inc. 2008 Case Analysis

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 . 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 million in 2005 V. Analysis of Strategic Factors 1. Strengths * American Icon * Strong well-respected Brand Name * Strong foothold in international markets * Special Camaraderie among riders 2. Weaknesses * Considered “toys of the wealthy” *

Aging riders * High price deters new younger riders Mainly Recreational 3. Opportunities * Harley appeal straddles class boundaries * Large grow potential in high performance Buell motorcycles * Large growth potential in foreign markets 4. Threats * Aggressive rivals * Slow economy VI. Strategic Alternatives and Recommended Strategy A. Strategic Alternatives * Concentrate marketing efforts on international markets least hit by recession * Increase marketing and production of low end Buell bikes, Harley’s cousin the high performance street bike, and offer classes for first time riders to recruit younger riders. Begin promotion of motorcycles at youth, college, university, and music events to reach younger audience. B. Recommended Strategy *

Continue shipping fewer motorcycles in anticipation of recession * Work on new technology through collaboration with suppliers and R&D * Maintain high quality with lower cost through relationships with suppliers VII. Implementation * To increase market share, increase awareness of Buell, concentrate high performance segment through Buell, to maintain integrity of the custom and touring segments of the Harley line.

Trying to create a Harley “crotch rocket” will only upset the Core customer base of Harley-Davidson, however if you sell Buell as Harleys younger, faster, cooler cousin coupled with an increased presents in youth event, such as music events and college and university events we should see an increase in youth sales. * Expand the Rider’s Edge New Rider Course to the high performance, lower price Buell motorcycles, although exciting owning your first motorcycle can also be scary so expanding the course could remove the fear and add safety.

Consider offering low cost class at or near colleges and universities, which focus on both fast and custom motorcycles to highlight all segments of Buell and Harley-Davidson. * Expand Financial Services to include the Buell line to expand customer base. VIII. Evaluation and Control * Monitor sales of lower end “beginner bikes” to evaluate affects of presence at youth events as well as effectiveness of expanding new rider courses. * Monitor Financial Services to evaluate effectiveness of expanding customer credit to include Buell and lower end Harley-Davidson motorcycles.