AUG 201109/27/12              1
Harley Davidson Strategic AuditPresented to: Dr. Saneya el GalalyPresented By:Mahmoud Abdel HamidKarim MohsenMohamed Ho...
Agenda• Brief History of HD        • Alternative Strategy• Current Situation              – TOWS Matrix    – Corporate Gov...
HISTORYFoundationIt all started in Milwaukee, Wisconsin in 1903 when William Harley,Walter, and Arthur Davidson, along, cr...
HD Today• Manufactures heavyweight Custom & Touring Motorcycles• Owns Buell Motorcycle & Harley Davidson Financial service...
Corporate Governance• Although the motorcycling business is fun, we take  corporate governance seriously.• The Board of Di...
Financial Ratios                        H-D    Industry   S&P 500Current P/E Ratio       36.7     30.6       20.5Current R...
Financial RatiosManagement Efficiency indicators                                    H-D      Industry   S&P 500Income/Empl...
Current Vision  “We fulfill dreams inspired by the many  roads of the world by providing  extraordinary motorcycles and cu...
Current Mission “We ride with our customers and apply this deep connection in every market we serve to create superior val...
HD Values      These are our values. They are the heart of how  we run our business. They guide our actions and  serve as ...
Mission & Vision Analysis          COMPONENTS            MISSION   VISION  CUSTOMERS                      YES       YES  P...
American Market                             Data Monitor 201009/27/12                                         13
Macro Environment ANALYSISPolitical Considering HD as American Icon Opportunities in emerging economies [India, China], ...
Continued…Legal   Legislation effects of Helmets for motorcyclists forcing all riders by law, otherwise fines are    appl...
Issue Priority Matrix                                         Probability of occurring                                    ...
Industry                                 New Entrant (Low)Analysis                                 • Switching cost is mod...
Industry Matrix                                              Harley              Honda               YamahaCritical Succes...
External Analysis•   Opportunities    – The international heavy weight market is growing and is now larger than      the U...
External Analysis• Threats   – High rise in the Oil prices. Harley-Davidson vehicles are heavy weight     motorcycles and ...
EFAS MatrixKey External Factors                                                   Weight   Ratin   Weighted               ...
EFAS MatrixThreats                                                                      Weight   Ratin   Weighted         ...
Internal Analysis• Strengths   – Robust Cash Flow.   – Strong Market Position and Brand image   – Strong relationships bui...
Internal Analysis• Weaknesses   – Declining Financial performance   – Poor Credit rating (BBB+)   – Unfunded employee post...
IFAS Matrix                                                       Weight   Rating   WeightedKey Internal Factors          ...
IFAS MatrixWeaknesses                                                 Weight   Rating   Weighted                          ...
Strategic Factor Analysis                                                                                          Weighte...
TOWS Matrix                                                        Strengths                                    Weaknesses...
VRIO Analysis•      ValuableHD motorcycles are valuable because of the lifestyle factor. HD neutralizes other competitors ...
Harley Davidson Core Competencies• Human Resources and Capital   – Trust, know-how, managerial capabilities and     compan...
Harley Davidson Capabilities• Integrated technological resources   – Usage of Information system to insure smooth     flow...
Strategic Recommendationso Reinforce strategic alliance engagement with Asian distribution  network–   Lack of market expa...
Strategies Analysis o Strategy 1:    o   Reinforce strategic alliance engagement with Asian distribution channels    •   L...
Strategies Analysis o Strategy 1:     o   Reinforce strategic alliance engagement with Asian distribution channels     •  ...
Strategies Analysis o Strategy 2: o   Create more attractive offering capitalizing on low interest rate           • Weak P...
Strategies Analysis o Strategy 2: o   Create more attractive offering capitalizing on low interest rate           • Weak P...
Strategies Analysis o Strategy 3:    o   Direct the R&D efforts optimizing the oil consuming engines    •   High Rise of O...
Strategies Analysis o Strategy 3:    o   Direct the R&D efforts optimizing the oil consuming engines    •   High Rise of O...
Conclusion• HD is working for international (Asia/Europe) expansion  and maintaining the American focus.• HD has decided n...
Thank You !09/27/12      40
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Harley Davidson, Strategic Analysis

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Full methodological strategic analysis on Harley Davidson motor cycle company, for full paper please contact me

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  • Harley-Davidson (Harley) is one of the leading automotive companies, which produces heavyweight motorcycles, motorcycle parts, accessories, apparel and general merchandise. The company also provides financial services such as wholesale and retail financing and insurance programs. Harley primarily operates in the US. It is headquartered in Milwaukee, Wisconsin and employs about 7,900 people
  • Harley-Davidson (Harley) is one of the leading automotive companies, which produces heavyweight motorcycles, motorcycle parts, accessories, apparel and general merchandise. The company also provides financial services such as wholesale and retail financing and insurance programs. Harley primarily operates in the US. It is headquartered in Milwaukee, Wisconsin and employs about 7,900 people
  • P/E Ratio A valuation ratio of a company's current share price compared to its per-share earnings, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. Current Ratio a liquidity ratio that measures a company's ability to pay short-term obligations. Leverage Ratio : Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations. Price/Sales : A ratio for valuing a stock relative to its own past performance, other companies or the market itself. ROE : The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.
  • Alliances with Ford Motor Company or other automobile manufacturers are possible ( Capitalizing on the distribution channels allowing more market penetration strategies) Interest rates are at historical lows ( HD dealers can offer a Low interest financing packages) Harley-Davidson have a good brand value among its customers and in U.S people, so they can exploit this situation, by teaching and educating the customers what is considered as a quality product and what are the things they are using for manufacturing their bikes. This will increase the customer loyalty to this brand and this will help in a market penetration
  • High rise in the Oil prices. Harley-Davidson vehicles are heavy weight motorcycles and this is one of the major threats they are facing, because their vehicles are more oil consuming
  • Fitch credit rating agency assigned BBB+ long-term credit rating to Harley with negative outlook and maintained the short-term F-2 rating with stable outlook. The change was triggered by the severe and rapid downturn in demand for most of Harley’s products on a global basis. This rating is expected to result in a weakening of Harley’s financial flexibility. Therefore, decline in credit rating restricts the company’s access to additional sources of financing and to the financial markets.
  • improve Return on Equity/Capital/Assets (Corporate/Directional/Stability ) Higher turnover, i.e., sales mprove Return on Equity/Capital/Assets (Corporate/Directional/Stability ) Higher turnover, i.e., sales
  • improve Return on Equity/Capital/Assets (Corporate/Directional/Stability ) Higher turnover, i.e., sales mprove Return on Equity/Capital/Assets (Corporate/Directional/Stability ) Higher turnover, i.e., sales
  • improve Return on Equity/Capital/Assets (Corporate/Directional/Stability ) Higher turnover, i.e., sales mprove Return on Equity/Capital/Assets (Corporate/Directional/Stability ) Higher turnover, i.e., sales
  • improve Return on Equity/Capital/Assets (Corporate/Directional/Stability ) Higher turnover, i.e., sales mprove Return on Equity/Capital/Assets (Corporate/Directional/Stability ) Higher turnover, i.e., sales
  • improve Return on Equity/Capital/Assets (Corporate/Directional/Stability ) Higher turnover, i.e., sales mprove Return on Equity/Capital/Assets (Corporate/Directional/Stability ) Higher turnover, i.e., sales
  • Harley Davidson, Strategic Analysis

    1. 1. AUG 201109/27/12 1
    2. 2. Harley Davidson Strategic AuditPresented to: Dr. Saneya el GalalyPresented By:Mahmoud Abdel HamidKarim MohsenMohamed HossamMohamed Madkour4/09/2011 2
    3. 3. Agenda• Brief History of HD • Alternative Strategy• Current Situation – TOWS Matrix – Corporate Governance • Possible strategies – Financial position• • Recommended Strategies Vision and Mission• Environmental Scanning • Evaluation• Industry Analysis • Conclusion• SWOT• EFAS• IFAS• KSFA4/09/2011 3
    4. 4. HISTORYFoundationIt all started in Milwaukee, Wisconsin in 1903 when William Harley,Walter, and Arthur Davidson, along, created the first Harley-Davidsonin their family building. 09/27/12 ® Tony Gauvin, UMFK, 4 4/09/2011 2005 4
    5. 5. HD Today• Manufactures heavyweight Custom & Touring Motorcycles• Owns Buell Motorcycle & Harley Davidson Financial services(HDFS)• Has over 1,500 dealers worldwide in 30 countries.• Foreign business is about 18% of Sales; R&D, 3.2%.• Has about 7,900 employees.09/27/12 5 4/09/2011 5
    6. 6. Corporate Governance• Although the motorcycling business is fun, we take corporate governance seriously.• The Board of Directors is composed of accomplished leaders from a range of industries who meet regularly to review Company objectives and plan for future growth.• These individuals draw on their diverse backgrounds and experiences.• They are proud Harley-Davidson enthusiasts, and they work to ensure that the decisions made by Harley- Davidson promote fairness, financial transparency and accountability to all our shareholders 4/09/2011 6
    7. 7. Financial Ratios H-D Industry S&P 500Current P/E Ratio 36.7 30.6 20.5Current Ratio 2 2 1.4Leverage Ratio 4.3 3.5 2.3Price/Sales Ratio 1.96 1.65 2.21Price/Book Value 4.33 4.57 3.64Price/Cash Flow Ratio 18.5 17.4 17.1Gross Margin 37.8 30.9 38.3Net Profit Margin 5.3 5.4 12.4Return On Equity 12 19.4 22.5Return On Assets 2.8 6.2 8Return On Capital 3.6 10.5 10.5 4/09/2011 7
    8. 8. Financial RatiosManagement Efficiency indicators H-D Industry S&P 500Income/Employee 41,217 36,567 107,222Revenue/Employee 771,323 654,649 963,920Receivable Turnover 3.2 11.6 14.2Inventory Turnover 9.3 8.8 11.6Asset Turnover 0.5 1.2 0.8 4/09/2011 8
    9. 9. Current Vision “We fulfill dreams inspired by the many roads of the world by providing extraordinary motorcycles and customer experiences. We fuel the passion for freedom in our customers to express their own individuality.”09/27/12 9
    10. 10. Current Mission “We ride with our customers and apply this deep connection in every market we serve to create superior value for all of our stakeholders.” 10
    11. 11. HD Values These are our values. They are the heart of how we run our business. They guide our actions and serve as the framework for the decisions and contributions our employees make at every level of the Company. • Tell the Truth. • Be Fair. • Keep Your Promises. • Respect the Individual. • Encourage Intellectual Curiosity.09/27/12 11
    12. 12. Mission & Vision Analysis COMPONENTS MISSION VISION CUSTOMERS YES YES PRODUCTS & SERVICES YES YES MARKETS YES NO CONCERN FOR SURVIVAL YES NO TECHNOLOGY NO YES PHILOSOPHY YES YES SELF CONCEPT YES YES CONCERN FOR PUBLIC YES YES IMAGE CONCERN FOR EMPLOYEES NO NO09/27/12 12
    13. 13. American Market Data Monitor 201009/27/12 13
    14. 14. Macro Environment ANALYSISPolitical Considering HD as American Icon Opportunities in emerging economies [India, China], consider Harley- Davidson as an American idol so that they are not welcoming Harley- Davidson into their soil.Economic Global recession is effecting economies world wide therefore HD has to sustain its position in the market. The increase in prices for many key row material in manufacturing GDP per capita trend in the past five years (42 ~ 47 KUSD) is not showing severe variation.Social More diverse lifestyles, Creating many Harley Clubs and academies around the globe like Rider’s Edge . Average purchaser of a U.S Harley-Davidson motorcycle is a married male in his mid-forties. This is affected by early retirement plans and healthcare programs not letting the luxury option of owning a new motorcycle. New interest from different demographic groups outside US.09/27/12 14
    15. 15. Continued…Legal Legislation effects of Helmets for motorcyclists forcing all riders by law, otherwise fines are applied. The Congress repealed financial incentives for states without universal helmet laws. Licensing of motorcycles inside major city in addition to suburban.Environmental This industry is the first attacked by environmental activists, the environmental laws varies from country to country. In Europe its Euro, in India its BS. Harley-Davidson’s one of the main problem is this environmental problems. Technological More technological advancements because customers looking for energy efficient and technologically advanced bikes now a day. Harley-Davidson is one of the main manufacturer and user of V-ENGINE configuration. Harley-Davidson’s have a wide variety of products according to Standard,09/27/12 Performance, Touring & custom.
    16. 16. Issue Priority Matrix Probability of occurring   High Medium Low *Increase in Oil * Drop in APAC * Embargo due Prices market Demand “ to political *Increase in Japan Earthquake” instability Impact of occurring Steel Prices *more aggressive *Competition Governmental High Regulation of Environmental standards *New     Technology Medium *Increase in     Insurance costs Low09/27/12 16
    17. 17. Industry New Entrant (Low)Analysis • Switching cost is moderate to high • Switching cost is moderate to high •Economies of scale ,capital ,, emission •Economies of scale ,capital emission standards ,, distribution channel standards distribution channel •High tech Involvement •High tech Involvement •Small scale Producers •Small scale Producers Rivalry Competition (High) Power of Buyer (Low) •Honda, Yamaha, Suzuki ( All •Honda, Yamaha, Suzuki ( All POWER OF SUPPLIER •Low power of customer as they •Low power of customer as they Japanese) with high existing assets Japanese) with high existing assets (Moderate) are individual are individual •High exit barriers •High exit barriers •Consolidated supplier. •Consolidated supplier. •High level of differentiation and •High level of differentiation and •Strategic Alliance between Suzuki •Strategic Alliance between Suzuki customer loyalty customer loyalty •Out source Steel, Basic •Out source Steel, Basic and Kawasaki through product and Kawasaki through product diversification. diversification. Electronics (huge contract) Electronics (huge contract) •Less no. of Dealers also rely on •Less no. of Dealers also rely on individual customers individual customers •Assembly within the Company •Assembly within the Company •Industry growth has been •Industry growth has been forecasted 3.4% forecasted 3.4% •Ease of switching suppliers •Ease of switching suppliers Substitute Product (Low) •Very few substitute as luxury •Very bike. bike. •Cars, bicycle and sports car. •Cars, bicycle •NO subs when looking for •NO subs when looking for luxury bike. luxury bike. 09/27/12 17
    18. 18. Industry Matrix Harley Honda YamahaCritical Success Factors Weight Rating Weighted Rating Weighted Rating Weighted Competitive Profile Matrix Score Score ScoreProduct Selection 0.15 2 0.30 4 0.60 4 0.60Product Quality 0.1 3 0.30 4 0.40 3 0.3Price Competitiveness 0.10 1 0.10 3 0.30 3 0.30Management 0.05 4 0.20 4 0.20 4 0.20Financial Position 0.05 4 0.20 3 0.15 3 0.15Customer Loyalty 0.20 4 0.80 2 0.40 2 0.40Global Expansion 0.2 2 0.40 4 0.80 4 0.80Market Share 0.15 3 0.45 3 0.45 3 0.45Total 1.00 2.75 3.30 3.2009/27/12 18
    19. 19. External Analysis• Opportunities – The international heavy weight market is growing and is now larger than the U. S. heavyweight market – The European demand for Harley Davidson is the highest in the international market and represents the single largest motorcycle market in the world. – Asian economy is booming, China/India is the only place not effected by global recession – Alliances with Ford Motor Company or other automobile manufacturers are possible. – younger riders are increasing becoming interested in bikes. – Interest rates are at historical lows through different dealers. – Increasing demand for bikes in US markets – Customers value perception through a good quality parts maintaining loyalty.09/27/12 19
    20. 20. External Analysis• Threats – High rise in the Oil prices. Harley-Davidson vehicles are heavy weight motorcycles and this is one of the major threats they are facing, because their vehicles are more oil consuming – Harleys average buying age is 42 years old and increasing. – The European Union’s motorcycles noise standards are more stringent than those of Environmental Protection Agencies in the U.S and increased environmental stand. – Some competitors of Harley Davidson have larger financial and marketing resources and they are more diversified increase HD risk. – international importing Tax , and increase in labor cost – The expiration of US government initiatives to stabilize credit markets programs could have a negative impact on capital markets and limit the company’s access to capital market funding09/27/12 20
    21. 21. EFAS MatrixKey External Factors Weight Ratin Weighted g ScoreOpportunities1-The international heavy weight market is growing and is now larger 0.12 2 0.24than the U. S. heavyweight market2-The European demand for Harley Davidson is the highest in the 0.06 2 0.12international market and represents the single largest motorcyclemarket in the world3-Asian economy is booming, China/India is the only place not 0.05 2 0.1effected by global recession4-Alliances with Ford Motor Company or other automobile 0.04 1 0.04manufacturers are possible.5-younger riders are increasing becoming interested in bikes 0.04 4 0.166-Interest rates are at historical lows through different dealers. 0.08 3 0.247-Increasing demand for bikes in US markets 0.06 4 0.248-Customers value perception through a good quality parts 0.1 4 0.4maintaining loyalty09/27/12 21
    22. 22. EFAS MatrixThreats Weight Ratin Weighted g Score1. High rise in the Oil prices. Harley-Davidson vehicles are heavy 0.12 2 0.24weight motorcycles and this is one of the major threats they are facing,because their vehicles are more oil consuming.2. Harleys average buying age is 42 years old and increasing. 0.04 2 0.083. The European Union’s motorcycles noise standards are more 0.1 3 0.3stringent than those of Environmental Protection Agencies in the U.Sand increased environmental stand.4. Some competitors of Harley Davidson have larger financial and 0.05 1 0.05marketing resources and they are more diversified. Below5. international importing Tax , and increase in labor cost 0.08 2 0.166. The expiration of US government initiatives to stabilize credit markets 0.06 Average 2 0.12programs could have a negative impact on capital markets and limit thecompany’s access to capital market funding 1.00 2.4909/27/12 22
    23. 23. Internal Analysis• Strengths – Robust Cash Flow. – Strong Market Position and Brand image – Strong relationships built on trust and respect with suppliers and dealers.. – Harley Davidson operates in two principal business segments: Motorcycles and Related Products, and Financial Services. – Harley Davidson is the only major American motorcycle manufacturer. – The Harley Owners Group (HOG) is the industry’s largest company sponsored motorcycle enthusiast organization, which currently has approximately 750,000 members worldwide. – Harley Davidson offers customers the opportunity to customize their bikes – Harley Davidson has a strong marketing department, which sponsors and participates in all major motorcycle consumer shows and rallies. – Proven product quality – CSR (Breast Cancer Network)09/27/12 23
    24. 24. Internal Analysis• Weaknesses – Declining Financial performance – Poor Credit rating (BBB+) – Unfunded employee post retirement benefits – High price, Harley-Davidson bikes are the costly bikes in this category. They just started making some bikes in the low cost category Harley Davidson has had difficulty gaining market share in some European countries. – The top Board of Directors for Harley-Davidson are all men. – Difficult to attract and retain talented employee.09/27/12 24
    25. 25. IFAS Matrix Weight Rating WeightedKey Internal Factors ScoreStrengths1. Robust Cash Flow. 0.06 4 0.242. Strong Market Position and Brand image. 0.1 3 0.33. Strong relationships built on trust and respect with suppliers 0.1 3 0.3and dealers.4. Harley Davidson operates in two principal business 0.04 3 0.12segments: Motorcycles and Related Products, and FinancialServices.5. Harley Davidson is the only major American motorcycle 0.05 4 0.2manufacturer.6. The Harley Owners Group (HOG) is the industry’s largest 0.06 4 0.24company sponsored motorcycle enthusiast organization, whichcurrently has approximately 750,000 members worldwide.7. Harley Davidson offer’s a custom the opportunity to 0.06 4 0.24customize their bikes.8. Harley Davidson has a strong marketing department, 0.05 3 0.159. Proven Product quality 0.1 4 0.410. CSR (Breast Cancer Network) 0.02 3 0.06 09/27/12 22
    26. 26. IFAS MatrixWeaknesses Weight Rating Weighted Score1. Declining Financial performance 0.1 2 0.22. Poor Credit rating (BBB+) 0.08 1 0.083. Unfunded employee post retirement benefits 0.06 2 0.124. High price, Harley-Davidson bikes are the 0.08 2 0.16costly. They just started making some bikes inthe low cost category5. The top Board of Directors for Harley- 0.02 Below 2 0.04Davidson are all men. Average6. Difficult to attract and retain talented 0.02 2 0.04employee. 1.00 2.8909/27/12 26
    27. 27. Strategic Factor Analysis Weighted Key Strategic Factors Weight Rating Score Duration Proven product quality 0.15 4 0.6  Inter-L Strengths Strong market position and brand image 0.12 3 0.36  S-Inter Wide distribution network 0.07 3 0.21  S Declining financial performance 0.05 2 0.1  Inter Unfunded employee post retirement benefits 0.03 2 0.06  Inter Weaknesses High prices, Harley-Davidson bikes are the costly bikes in this category. They just started making some bikes in the low cost category. 0.05 2 0.1  Inter-L Harley-Davidson have a good brand value among its customers and in U.S people 0.10 Below 0.4 4  Inter Opportunities Dealers are financing the purchase of used HD motorcycles at low interest rates 0.07 Average 3 0.21  S The international heavy weight motorcycles market is growing 0.11 2 0.22  S-Inter Environmental protection laws (emissions and noise) 0.04 3 0.12  Inter-L Threats High rise in the Oil prices 0.15 2 0.3  Inter-L Increase in Labor cost 0.06 2 0.12  Inter 2.809/27/12 27
    28. 28. TOWS Matrix Strengths Weaknesses S.1. Proven product quality W.1. Declining financial performance   S.2. Strong market position and brand image W.2. Unfunded employee post retirement benefits W.3. High prices, Harley-Davidson bikes are the costly bikes in this category. They just started S.3. Wide distribution network making some bikes in the low cost category.       Opportunities 1. Follow market penetration strategy by 1. Buell Product development producing low O.1. Harley-Davidson have a good brand value among its expanding presence in US and EURO price bikes approaching low income market customers and in U.S people markets segment ( W.3 O.2 O.3) 2. Create more offerings capitalizing on low 2. Capitalizing on the growing International O.2. Dealers are financing the Interest rates Market potential optimizing the manufacturing purchase of used HD cost and accordingly recovering financial motorcycles at low interest rates position (W.1 O.3 O.2 ) O.3. The international heavy weight motorcycles market is growing Threats 1. Direct R&D efforts to focus on producing 1. Down Size companys resources (W.1 T.1. Environmental protection optimized oil consuming motors W.2 T.3) laws (emissions and noise) 2. Open Foreign factory to gain international T.2. High rise in the Oil prices market share at lower cost T.3. Increase in Labor cost09/27/12 28
    29. 29. VRIO Analysis• ValuableHD motorcycles are valuable because of the lifestyle factor. HD neutralizes other competitors in this category because the lifestyle and culture cannot be duplicated. Rivals in the industry all compete for different, yet complementary, lifestyle factors.• RareHD motorcycles are not rare. However, the reputation and personal value is rare and controlled only by that individual. Motorcycle manufacturers are many,. That image is rare,.• ImitabilityHD has a causally ambiguous position within the market, This market position is difficult to imitate, as is the culture that customers, suppliers, and employees participate in. passion for HD cannot be imitated or substituted.• OrganizationHarley-Davidson’s most un-substitutable capabilities are the knowledge,. fosters and encourages the culture that makes its company special to customers, employees and suppliers. Without this culture, HD would not survive in today’s market.09/27/12 29
    30. 30. Harley Davidson Core Competencies• Human Resources and Capital – Trust, know-how, managerial capabilities and company culture.• Innovation resources from suppliers, employees and management• Reputational resources – Brand name, reputation with suppliers and product perception09/27/12 30
    31. 31. Harley Davidson Capabilities• Integrated technological resources – Usage of Information system to insure smooth flow of production• Unique skills of employees – Provide high level training programs for its employees to add value to the company• Manufacturing – HD manufacturing plants are capable of producing many different models09/27/12 31
    32. 32. Strategic Recommendationso Reinforce strategic alliance engagement with Asian distribution network– Lack of market expansion leads to few opportunitieso Create more attractive offering capitalizing on low interest rate– Weak Performance in USo Direct the R&D efforts optimizing the oil consuming engines– High Rise of Oil & Environmental complianceo Product development /Horizontal Diversification– Leveraging on the growth of demand in the international motorcycle marketo Improve Return on Equity/Capital/Assets /Stability)– Higher turnover & sales09/27/12 32
    33. 33. Strategies Analysis o Strategy 1: o Reinforce strategic alliance engagement with Asian distribution channels • Lack of market expansion leads to few opportunities o Implementation  Invest time and persistence in order to successfully operate in Asian market  Create country based teams that are determined to make wise cultural decisions.  More involvement with foreign government through office of trade of the US  More participation in the world trade organization activities09/27/12 33
    34. 34. Strategies Analysis o Strategy 1: o Reinforce strategic alliance engagement with Asian distribution channels • Lack of market expansion leads to few opportunities o Pro/Cons PRO CONS Increase Sales Significantly huge effort & investment capital Extend international market Long payback period which presence enhancing brand might impact the financial image position. • Cooperative Business level strategy09/27/12 34
    35. 35. Strategies Analysis o Strategy 2: o Create more attractive offering capitalizing on low interest rate • Weak Performance in US o Implementation  Establish frame agreements with financial institutes for funding & support HD Mania.  Extend their marketing campaign through different type of media (Social Media) and loyalty programs.09/27/12 35
    36. 36. Strategies Analysis o Strategy 2: o Create more attractive offering capitalizing on low interest rate • Weak Performance in US o Pro/Cons PRO CONS Increase Sales Complication of reaching short/Mid term agreement with financial institutes. Sustain positive cash flow. Considerably marketing & media (Current /Liquidity Ratio) expenses Targeting lower income market segment • Cooperative Business level strategy09/27/12 36
    37. 37. Strategies Analysis o Strategy 3: o Direct the R&D efforts optimizing the oil consuming engines • High Rise of Oil and the Environmental compliance o Implementation  Joint R&D initiatives with Ford Motors R&D team for:  Oil consumption reduction for HD motorcycles  New Hybrid motors using alternative energy sources (bio fuel and green energy)09/27/12 37
    38. 38. Strategies Analysis o Strategy 3: o Direct the R&D efforts optimizing the oil consuming engines • High Rise of Oil & Environmental compliance o Pro/Cons PROS CONS Lower environmental Huge resources for R&D emissions Going Green initiatives Higher costs of manufacturing • Functional level strategy09/27/12 38
    39. 39. Conclusion• HD is working for international (Asia/Europe) expansion and maintaining the American focus.• HD has decided not to manufacture its bikes overseas to uphold the image and reputation of “Made in USA” brand.• Increase diversity programming• Bring HD heritage to the rest of planet09/27/12 39
    40. 40. Thank You !09/27/12 40

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