Harley davidson inc

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  • Kawasaki MTBP 2013 says they are more concentrating on growth through differentiation

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  • 1. HARLEY DAVIDSON, INC. King of the Road
  • 2. HISTORY TIMELINE 1903 •William Harley, Walter and Arthur Davidson created the first Harley Davidson 1917 •Harley Davidson supplied around 15000 motorcycles to US military for World War I 1920 •Emerged as the largest motorcycle manufacturer in the world 1965 •The company filed for IPO and 53% stake was controlled by the owners 1969 •Harley was acquired by AMF 1981 •The company was bought by its management for $81.5 mn through leveraged buyout 1987 •It was listed in the NYSE after going public in 1986 1998 •Harley Davidson factory opened outside USA in Brazil 2011 •Started operations in India
  • 3. MODELS AND AFTERMARKET These model families are distinguished by the frame, engine, suspension, and other characteristics There are thousands of companies producing aftermarket Harley- Davidson parts The aftermarket now produces every single part on a Harley motorcycle in multiple forms Touring: These bikes all have saddlebags and other touring trim. The touring bikes include the "Road King," the "Electra Glide" and the "Ultra Classic." Softail: A general- purpose bike Dyna: This classic Harley chopper is 94 inches long and about 630 pounds Sportster: Harley's entry-level bike. It is lighter and sportier than most Harley Vrod: This is currently the only production Harley- Davidson mot orcycle using the Revolution engine Street: The cheapest Harley Davidson ever built
  • 4. THE COMPETITORS GENERIC STRATEGIES US MOTORCYCLE INDUSTRY 2012 • Kawasaki• Suzuki • Harley Davidson • Honda • Yamaha Cost Leadership Differentiation Differentiation focus Cost focus
  • 5. TOWS MATRIX • Threats • Environmental protection laws • High rise in the oil prices • Increase in labor cost Opportunities Good brand value among customers Dealers are financing at low interest rates • Weaknesses • Declining financial performance • High prices (they have now entered into the middleweight segment) • Strengths: • Proven product quality • Strong market position and brand image • Wide distribution network Should expand the presence in Euro and other emerging markets (S n O) Optimizing the manufacturing cost and also catering to the low price bikes segment through Buell (W n O) Sales have declined and this may give rise to more low weight bikes boom (W n T) R&D efforts should be on reducing the oil consumption in motors (S n T)
  • 6. CORE COMPETENCY Hundreds’ of models and efficient engine technology Brand image and Brand loyalty Differentiation strategy Customization or Aftermarket Promoting lifestyle through HOG (Harley Owners group) Wide distribution network Skillful workforce
  • 7. CORPORATE STRATEGY The Brand name in the mind of consumers are synonymous with “machismo and machines of shining chrome” Adopted the MAN (materials as needed) strategy similar to JIT of Honda to reduce the manufacturing costs Though HD owns Harley Davidson Financial services (HDFS), they have never tried to enter any other markets Acquired Buell Motorcycle company for whom it used to sell the engines Entered into Brazil in 1998 and India in 2011 Acquired MV Augusta company for $109 mn to expand its Europe network Recently in Auto Expo, the affordable Street was revealed which is a new segment for HD In 2008, a committee was formed to look after the reduction of carbon di oxide emissions for green environment
  • 8. PROBLEMS FACED..  Environment protection laws have given a lot of trouble to HD lately  The R&D costs have gone up in order to reduce the carbon emissions  The average age of Harley Davidson users has increased to 42 which was below 35 in 1980  Catering only to High end Luxury segment  Debt issues after the leveraged buyout  Faced huge losses in sales in 1933 due to Great Depression  HD faced immense competition from Japanese Motorcycles from 1960 to 1985  High manufacturing costs and losing market share to Honda and Yamaha has caused financial crisis in 1980  Stock price has suffered to its all time low at the time of 2008 global recession
  • 9. FINANCIALS  Market capitalization of $12.54 billion in 2013  P/E ratio is 20.12 which was 23 in 1986  The stock price movement of the last 22 years
  • 10. RECOMMENDATIONS  Reinforce strategic alliances with Asian distribution network  Middleweight and lower weight motorcycle segments should also be targeted  Improve the return on assets/sales/equity  Redefine the Harley Davidson brand to attract the younger segment  Reducing licensing and operational costs
  • 11. THANK YOU