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
