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  • 1. MACRO – Socio-Cultural
    • Europe
      • The population growth in Europe has been increasing since 1999 through 2002
  • 2. MACRO – Socio-Cultural
    • The market for motorcycles or two-wheeled vehicles has stabilized just under 25,000 after a spike in 1997.
  • 3. MACRO – Socio-Cultural
    • Registration of vehicles increased for passenger vehicles, but a decrease for two wheelers.
  • 4. MACRO – Socio-Cultural
    • Japan
      • The population has been steadily increasing for the past 10 years, along with the density and also the mean age of the population.
      • Currently the mean age of the population is 41.43 years
  • 5. MACRO – Socio-Cultural
    • The population aged 20-24 has been steadily decreasing since 1996
    • The population aged 35-39 has been steadily increasing since 1997
  • 6. MACRO – Socio-Cultural
    • High population density in Japan of 349.62 people per square km
    • A huge surge of car ownership of 64% in just over twenty years
    • Japan has an extremely strained road network.
  • 7. MACRO – Socio-Cultural
    • United States
      • There was significant population growth in the warmer climate states such as California, Florida, Texas and Nevada.
  • 8. MACRO – Socio-Cultural
    • Currently there are 5.5 million motorcycle owners in the U.S. but only 3.9 million are registered
  • 9. MACRO – Political-Legal
    • Europe
      • Transportation regulations are set out by governments and agencies of the individual countries within the European Union
      • Legislation has been set forth to control emissions and braking systems.
      • Other laws regulate the use of motorcycles such as licensing, safety regulations, and equipment requirements.
  • 10. MACRO – Political / Legal
    • Japan
      • There is currently a new proposal for emission standards for Japan
      • The legal minimum age to drive a lightweight is 16 and 18 for heavyweights
      • Japan has responded to many American requests regarding laws for motorcycles and motorcycle riders.
  • 11. MACRO – Political/Legal
    • United States
      • All 50 states require motorcycle riders to obtain a special license to operate a motorcycle
      • Currently under the Motorcycle Helmet Act, states have different stipulations regarding mandatory use of helmets
  • 12. Industry Overview
    • The primary NAICS code is 336991
      • Motorcycle & arts Manufacturing.
    • The annual industry sales were reportedly worth $19.2 Billion in 2003
      • 12.7% increase from 2002 revenue totals.
    • The annual growth rate of the motorcycle industry over the span of three years is 4.11%.
  • 13. Industry Overview
    • The 2003 industry return rates are above average when compared to other industries and are listed as follows :
      • Return on Assets (ROA) is 10.2%,
      • Return on Equity (ROE) is 22.7%
      • Return on Investment (ROI) is 37.9%.
  • 14. Industry Overview
    • There are 17,151 people employed in the U.S. motorcycle industry alone.
    • Currently under the NAICS code 336991 there are 22 firms that operate solely in the motorcycle and parts manufacturing industry.
    • Some examples include BMW, Suzuki, Honda and Polaris Industries.
  • 15. INDUSTRY – Strategic Group Map Rough & Tough Perceived Image Sophisticated Low High Quality of Product Kawasaki Harley-Davidson Honda BMW Yamaha Suzuki
  • 16. Value Chain Analysis
    • Corporate HQ/ Executive
      • 3 Year sales increase
      • 28 % U.S,15 % Europe, 17% Japan.
  • 17. Corporate HQ/ Executive
    • The return ratio’s are significantly higher than the competition’s
  • 18. Market Capitalization
    • The market is confident that Harley-Davidson is going to remain a long term market leader.
  • 19. Corporate Strategy Vertical Integration
    • Harley-Davidson is a mid-stream company with its main focus on manufacturing motorcycles.
    • It would not be beneficial for Harley-Davidson to backwards integrate.
    • It would not be beneficial for Harley-Davidson to forward integrate
  • 20. Vertical Integration
    • Potential Problems and Recommendations
    • The dealer/Supplier relationships is the foundation of its successful supply chain management
    • Harley-Davidson should continue to build positive relationships to retain the competitive advantage
  • 21. Corporate Strategy Horizontal Diversification
    • Harley-Davidson is not horizontally diversified
    • Harley only has one NAICS code 336991
    • The industry of manufacturing motorcycles, bicycles and parts.
  • 22. Horizontal Diversification
    • Harley-Davidson products and services include:
      • Harley Gear –clothing
      • Harley accessories
      • Harley-Davidson Financial Services
    • The merchandise and financial services act as catalysts to the sale of Harley-Davidson motorcycles and to the image of the Harley way of life.
  • 23. Horizontal Diversification
    • Potential Problems and Recommendations
      • Harley-Davidson is dominating the motorcycle manufacturing industry.
      • Harley-Davidson has such a loyal customer base, strong brand name and image
      • it would be detrimental if they diversify into markets unrelated to motorcycles.
  • 24. Corporate Strategy Geographic Diversification
    • Harley-Davidson currently operates in three main global regions:
      • North America,
      • Europe
      • Asia.
    • Harley-Davidson operates under a global strategy
    • It offers standardized products across global markets
    • Competitive strategy is centralized
  • 25. Geographic Diversification
    • International revenue accounted for approximately 18%, of net revenue
    • Harley-Davidson 2003 Market Share
      • 50% United States
      • 8% Europe
      • 26% Asia
    • Harley-Davidson outpaced the industry in sales in each region in 2003
    • It is recommended that Harley-Davidson remains in the European, Japanese markets
  • 26. Geographic Diversification
    • Potential Problems and Recommendations
    • The company has expressed interest in other markets
      • South America, Africa and Southeast Asia.
    • Recommend that Harley-Davidson enters the Chinese market through a strategic alliance with Zongshen Motorcycle Group.
    • Not recommended entry into South American or African markets at this time