Harley Davidson presented a case study on the company's current performance and strategic posture. In 2008, Harley Davidson saw declines in revenue, net income, earnings per share, and motorcycles sold compared to 2007. However, the company maintained its mission to fulfill customer dreams through extraordinary motorcycles and experiences. Key strategies included getting costs under control, funding for Harley Davidson Financial Services, and investing in the brand. An analysis of external factors found opportunities in international growth but also threats from rising fuel prices and a potential recession. Internally, strengths included financing availability and brand loyalty, while weaknesses were lower sales volumes and higher prices.

1. Presentation on case study
Harley Davidson
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2. Prepared By
2
ID Name
12102235 MD:- Saddam Hosson
13102073 Ety Akter
13102518 Nusrat Jahan
12302114 Afrina Jahan Prity
Section: A
Subject: Strategic management and Business Policy (MGT-403)
TO
Md. Lutfar Rahman
Instructor
Collage of Business Administration (CBA)
2-6-2015

3. Introduction
 Harley-Davidson Inc, often abbreviated H-D or Harley, is an
American motorcycle manufacturer.
 Founded in Milwaokee,Wisconsin, during the first decade of the
20th century, it was one of two major American motorcycle
manufacturers to survive the Great Depression.
 Harley-Davidson also survived a period of poor quality control
and competition from Japanese manufacturers.
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4.  From 1977, the only motorcycles sold to the public under
the Harley-Davidson brand have been heavyweight
motorcycles, with engine displacements greater than 700 cc,
designed for cruising on highways
 Harley-Davidson sustains a large brand community
which keeps active through clubs, events, and a museum.
 Licensing of the Harley-Davidson brand and logo
accounted for $40 million (0.8%) of the company's net
revenue in 2010.
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5. Current Situation
A. Current Performance 2008
 Revenue 2008 $5.59 billion down from $5.73 billion in
2007
 Net Income $654.7 million down from $933.8 million
in 2007
 Earnings per stock share $2.70 down from $3.74 in
2007
 Motorcycles sold 303,470 down from 330,619 in 2007
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6. B. Strategic Posture
 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.
 Objectives
 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.
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7. Strategies
 Get Cost structure correct
 Obtain funding for Harley-Davidson Financial
Services
 Invest in the Harley-Davidson Brand
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8. Policies
Harley-Davidson values the deep emotional connection
that is created with our customers through our products,
services and experiences. We are fueled by brand
loyalty and trust that our customers place in us to
deliver premium quality and the promise of a fulfilling
lifetime ownership experience. We exemplify this
commitment by embracing a culture of personal
responsibility and stewardship for quality in everything
we do.
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9. Corporate Governance
 Board of Directors
The Board of Directors consisted of 11 members, of which only two
were internal members—James L. Ziemer, President and Chief
Executive Officer (CEO), and Thomas E. Bergman, the
Chief Financial Officer. High lights board members in 2008.The
Board of Directors serve three-year staggered terms. Each of the
nine non-employee directors are compensated $100,000 per year. At
least half of this amount is to be paid in common stock. Since 2005,
the board has authorized a stock repurchase. In 2007, 2006, and
2005, the Company repurchased 20.4 million, 19.3 million, and 21.4
million shares of its common stock at weighted-average prices of
$56, $55, and $49, respectively. As of February 2008, all of the 20
million shares authorized in 2007 remained to be repurchased. Each
of the prior two years authorizations were fully repurchased by the
end of the next year.
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10. 1. Jochen Zeitz, Chief Executive Officer and Chairman of the Board, Puma
AG
2. James L. Zeimer, President and CEO, Harley Davidson, Inc
3. James A. Norling, Executive Vice President, Motorola, Inc
4. George L. Miles, Jr., President and CEO
5. Sara L. Levinson, ChairMom and Chief Executive Officer, ClubMom, Inc
6. Donald A. James, Vice Chairman and Chief Executive Officer, Fred Deeley
Imports, Inc
7. Judson C. Green, President and CEO
8. George H. Conrades, Executive Chairman of Akamai Technologies, Inc
9. Jeffrey L. Bleustein, Chairman of the Board, Harley-Davidson, Inc
10. Richard I. Beattie, Chairman of the Executive Committee
11. Barry K. Allen, President, Allen Enterprises
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11. C .Top Management
 James C. Ziemer started with Harley-Davidson 38 years ago as a freight elevator
operator and served as the CFO from 1991 to 2005. In 2005, upon the retirement of
Harley veteran Jeffrey Bluestein, Ziemer assumed the top role of President and CEO.
Corporate Officers, Harley-Davidson, Inc.
James L. Ziemer
President and Chief Executive Officer
Thomas E. Bergmann
Executive Vice President, and Chief Financial Officer
Gail A. Lione
Vice President, General Counsel and Secretary
James M. Brostowitz
Vice President, Treasure, and Chief Accounting Officer
2. Motor Company Leadership
Joanne M. Bischmann
Vice President, Marketing
David P. Bozeman
General Manager, Powertrain Operations
James M. Brostowitz
Vice President and Treasurer
Leroy Coleman
Vice President, Advanced Operations
Rodney J. Copes
Vice President and General Manager, Powertrain
Operations
William B. Dannehl
Vice President, North American Sales and Dealers Services
William G. Davidson
Vice President and Chief Styling Officer
Karl M. Eberle
Vice President and General Manager,
Kansas City
Operations
Robert S. Farchione
General Manager, Parts and
Accessories
Fred C. Gates
General Manager, York Operations
James E. Haney
Vice President and Chief Information
Officer
Michael P. Heerhold
General Manager, Tomahawk
Timothy K. Hoelter
Vice President, Government Affairs
Ronald M. Hutchinson
Vice President, New Business
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12. Kathleen A. Lawler
Vice President, Communications
Lara L. Lee
Vice President, Enthusiast Services
Matthew S. Levatich
Vice President, Materials Management
Gail A. Lione
Vice President and General Counsel
James A. McCaslin
President and Chief Operating Officer
Jeffrey A. Merten
Managing Director, Asia Pacific and Latin
America
Louis N. Netz
Vice President and Director, Styling
John A. Olin
Vice President, Controller
Steven R. Phillips
Vice President, Quality, Reliability and Technical
Services
Harold A. Scott
Vice President, Human Resources
Patrick Smith
General Manager, General Merchandise
W. Kenneth Sutton, Jr.
Vice President, Engineering
Michael van der Sande
Managing Director, HD Europe
Jerry G. Wilke
Vice President, Customer Relationships and
Product
Planning
3. Harley-Davidson Financial Services Leadership
Lawrence G. Hund
Vice President, Operations and Chief Financial
Officer
Kathryn H. Marczak
Vice President, Chief Credit and Administrative
Officer
Saiyid T. Naqvi
President
4. Buell Motorcycle Company Leadership
Erik F. Buell
Chairman and Chief Technical Officer
Jon R. Flickinger
President and Chief Operating Office
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13. 2.External Environment
General Environment
Economic-
Confidence in economy is directly proportional to the purchasing of consumer items.
The economic crisis will hit this segment very much.
Currency fluctuation is also a big problem in this industry
Revenue from sales outside the using increased 7% from 2006 to 2007
Technological
As technology changes, customers’ expectations increase.
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,
Performance, Touring & custom
Politica
U.S Government and People are considering Harley-Davidson as an American icon.
Federal, state, local authorities have control requirements relating to air, water,
noise, and pollution.
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14. Legal
Harley-Davidson is facing some legal problems in Asian countries, in
India there is 60%tariff and various other taxes will cause the price
of the bike to double Noise pollution and some emission standards
of Harley-Davidson bike is not up to the level of some countries
across the globe.
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
Socio-cultural
Traditionally targeted to upper middle class males.
Increased demand by women for motorcycles.
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15. B .Industrial Environment
 Rivalry High Competition Motorcycle manufacturers continue to improve designs
and provide a competitive market for Harley Davidson to compete for new
consumers. Thus Harley Davidson traditionally has become the dominant market
player in the market with the strong market share. Honda has been the major
competitor in the same market and Harley Davidson is heavily relying upon its
brand and they are trying to maintain the strong base of the customers. Honda has
really become the major internal rivalry for the company with its improved
strategies in the products
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16.  Buyers Power High With over 30 different models of
Harley's ranging from $6,695-20,645, and 8 Models of
Buell bikes avalible from $4,695-11,995, consumers hve
many options of finding the bike that meets their needs
while staying within their price range.
 Distributors Power High Harley has 684 Independent
owned full service dealerships as well as 323 foreign
locations.
 Threat of Substitutes Medium Honda is a big
competitor for Harley with many similar lines of bikes
from the small "crotch rockets" to the bigger cruising and
touring bike
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17. C . Summary of External Forces
External Factors WEIGHT RATING
WEIGHTED
SCORE COMMENTS
Opportunities
Double digit growth in international market 0.1 4 0.4 Growth doubled in international dealer network for 2007
New dealership in S. Africa 0.1 3 0.3 New dealership being built in South Africa in 2008
Addition of Buell motorcycle line 0.2 5 1 Soaring Profits from adding the Buell line to H.D. dealers
E-commerce, online catalog 0.03 1 0.03 Harley-Davidson developed in 2001
Threats
Rising Fuel Prices 0.3 1 0.03 Steady sharp rise in fuel prices since 9/11
Pending recession 0.2 2 0.4 Consumers may keep aging motorcycles or wait to purchase
U.S and Foreign environment controls (EPA) 0.03 2 0.06
Stricter Government environmental controls add to cost of
production.
National Traffic and Motor Vehicle Safety Admin 0.03 2 0.06
Stricter Government environmental controls add to cost of
production.
Total Scores 1 2.28
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18. Finance
 In 1985 Harley-Davidson was 4 hours from shutting
there doors. Citicorp, Harleys main lender denied
lending money in 1985 but with only 4 hours
remaining to find a lending company, Harley made a
deal with Heller Financial and managed to save the
company. At this current time it is now funded by
HDFS (Harley-Davidson Financial Services). Which
is a lending company for Harley-Davidson
motorcycles among several other helping factors.
This means the company basically now funds itself.
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19. FINANCIAL HIGHLIGHTS
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21. Ratio Analysis
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23.  R&D
Harley feels that research and development of there custom and touring
motorcycles is a large part of the way they compete against the
competition. They spent $178.5 million in 2005, $177.7 million in
2006, and $185.5 million in 2007 in areas such as style, purchasing,
and manufacturing.
Human Resources
Approximately 50% of the manufacturing employees of Harley-
Davidson's own Harley's themselves and buy from dealerships so that
they have first hand experience with what they are contributing too as a
work force. There are roughly 9,000 employees of Harley-Davidson.
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24. IS
 Teamwork also played a role in the structure of the IS function at Harley Davidson
 Instead of chief information officer, they had “office of the CIO” where it is having
three directors.
 Senior management looks to the CIO to be their internal consultant, to give them
guidance and direction regarding technology’s ability to create business value.
 Each circle of leadership had an information technology circle (ITC) attached to it.
 It is made up of senior IS people & end users representing each site and function.
 The role of the ITC was to understand group processes and interactions and to decide
from a business perspective where the group should focus its technology efforts.
Harley Davidson implemented “Accentual Human Capital Development Framework”
allowed Human Resource issues with senior level management in the language they
both can understand. By allowing access from multiple locations instead of a single
source, this improved Human Resources Information System became a major
benefit for the Company because it increased employee engagement and work
force adaptability.
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25. Capabilities of the Firm
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 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 models

26. Harley Davidson Best Strategic
Just-in-time inventory (JIT): Just-in-time inventory "was the driving force of
Harley's quality-improvement program. Suppliers of Harley had to implement JIT
into their production process in order to compliment Harley's system. Previously,
Harley utilized a complex, computerized inventory system, Material
Requirements Planning, which was based on maintaining high levels of stock, to
offset any manufacturing problems, so the assembly line would not be halted.
Harley recorded impressive improvements:
 1. Inventory turns up from 5 to 20.
 2. Inventory levels down 75 %.
 3. Percentage of motorcycles coming off the line completed up from 76 % to
99 %.
 4. Scrap and rework reduced by 68 %.
 5. Productivity up by 50 %.
 6. Space requirements down by 25 %.
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Employee involvement (EI): Successful implementation of any
company program occurs when there are a commitment at all
levels of the organization. Top management must not only direct
but take direction from the lower level employees. Harley has set
the following nine guidelines to follow for successful employee
involvement.
 Management must take a actions about continuous
improvement of quality and efficiency of the employee.
 Management must be should be encouraged the employee
to develop and grow.
 There must be a mutual trust between employees and
management.

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 Employees must be thoroughly trained in specific problem-
solving and quality-control techniques.
 Managers must encourage participation from everyone.
 Employees must be given responsibility and authority for
production, quality, preventive maintenance, and other
aspects of their jobs.
 Individual employees must help each other develop and
grow.
 Employees must attack problems, not each other-that is,
there must be no finger-pointing when things go wrong.
 Creativity must continuously be encouraged through a free,
non-threatening atmosphere.

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Statistical operator control (SOC): In the beginning
Harley-Davidson believed that their present machinery
was unable to produce quality products. But, with the
implementation of the Statistical Operator Control
(SOC) process they soon realized that it was not their
equipment but their methods. "SOC involves using
simple statistical techniques and control charts to
monitor the variation in a work process". Harley
realized that this process would only work if the
responsibility of quality was placed upon the persons
who had direct contact with the materials (operators).

30. Summary of Internal Factors
Internal Factor weight Rating Weighted score Comments
Strength:-
Marker Share leadership
Large and Customized
score
.20
.15
4.10
4.20
.80
1.00
Provide quality
product
Provide
competitive
Advantage
Weakness:-
Low sales Volume
High price
.10
.15
4.05
3.90
0.64
0.59
Reduce Revenue
Loss customer
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31. SWOT analysis
Internal
Strengths Weaknesses
Availability of financing through
HDFS (Harley Davidson Financial
Services.)
Strong brand name and brand loyalty
(clubs, events and museum)
Quality control Harley’s custom
segment gives owners the opportunity
to customize their bikes
Harley have a effective marketing
division
Operating income for Financial
Services segment decreased 61 percent
Decreasing market share in America
(major market for Harley) and has
problem in gaining market share outside
America
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32. SWOT analysis External
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Opportunities Threats
The European heavyweight
motorcycle market roughly 80 % of the
size of the U.S. market
Women and younger riders are
increasingly becoming interested in
bikes
Market share increasing in Europe
and Asia for the last two years
Market share expansion in new
markets such as India and Latin
America
Fierce competition from Japanese manufacturers
(Honda, Yamaha, Suzuki, and Kawasaki)
Competitors of Harley Davidson
have larger financial and marketing resources and
they are more diversified
Environmental protection laws
Discretionary spending on high-end consumer
goods has declined drastically
Harley’s Financial Services operations face
competition from various banks, insurance
companies and other financial institutions that have
additional sources of capital at more competitive
rates and terms.

33. Strategic Factors Analysis Summary (SFAS)
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The internal strengths and weaknesses of Harley-Davidson, listed in Table ,
are about average. On a scale of one to five, werates the company at a 3.7.
Harley has very strong strengths that are essential to the future success of
the company.

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The external opportunities and threats of Harley-Davidson, listed in Table 3, are average.
On a scale of one to five, the author rates the company at 3.85. Important opportunities
for Harley are the expanding overseas markets and the market of b women and young
riders. In 2008, Harley has already expanded production overseas into India. where there
is a large demand for Harley motorcycles

35. Identification of strategic issues:-
 1st strategy is customer focus: Harley-Devidson offers a wide
range of products and services,from children’s tricycles, clothing
accessories and affordable motorcycles to more higher- ended
luxury motorcycles targeting customers in all age groups.
 2nd is brand loyalty: By allowing their customers to personalize
and customize their motorcycles, this strategy helps build their
second strategy.
 3rd Their value is: “Tell the truth. Be fair, keep your promises.
Respect the individual. Encourage intellectual curiosity.’’
 4th Policies: Harley- Davidson minimized the traditional
approach in management and encouraged the “Open Door”
policy throughout the company in order to maximize and
encourage overall the employee involvement. Hence, they allow
their employees to participate in the company’s key business
decisions.
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36. Strategic Alternatives and Recommended Strategy
Alternative 1: Reinforce strategic alliance engagement with Asian distribution
channels. (Lack of marketing experience leads to few opportunities).
 Pros: 1. Increase sales, 2. Extend international market presence enhancing
brand image.
 Cons: 1.Significantly huge effort and investment capital, 2. Long payback
which might impact the financial position.
Alternative2: Create more attractive capitalizing on low interest rate. (Weak
performance in US)
 Pros : 1. Increase sales, 2. Sustain positive cash flow (current/ liquidity
ratio), 3. Targeting lower income market segment.
 Cons: 1. Complication of reaching short/ mid-term agreement with
financial institutes, 2. Considerable marketing and media expenses.
Alternative 3: Direct the R and D optimizing the oil consuming engines.
(High rise of oil and environmental compliance).
 Pros: 1. Lower environmental emissions, 2. going green initiative.
 Cons: 1. Huge resources for R and D, 2. Higher cost of manufacturing.
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37. Implementation:
Strategy 1: Reinforce strategic alliance engagement with Asian distribution channels.
 Invest time and persistence in order to successfully operate in Asia market.
 Create country based teams that are determined to make wise cultural decision.
 More involvement with foreign government through office of trade of the US.
 More participation in the world trade organization activities.
Strategy 2: Create more attractive capitalizing on low interest rate.
 Establish frame agreements with financial institutes for founding and support HD
media.
 Extend their marketing campaign through different type of media (social media) and
loyalty programs.
Strategy 3:
 Direct the R and D efforts optimizing the oil consuming engines.
 Joint R and D initiatives with Ford Motors R and D team for.
 Oil consumption reduction for Harley- Davidson’s motorcycles.
 New hybrid motor using alternative energy sources. (bio fuel and green energy)
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Recommendation: I would strategy recommend no.2 because no.1 is
difficult; here need huge effort and investment capital. Alternative
no.3 is difficult too because it need huge resource and very costly

38. Conclusion:
Harley Davidson, the famous manufacturer of heavyweight
motorcycles, has dominated the U.S. market by
successfully targeting and selling its customers not only a
motorcycle but the lifestyle that accompanies it. However,
due to its overemphasis of the American heavyweight
segment, the retirement of its core demographic, lack of
research and development, and the economic strain on its
financial services, the American icon must remodel its
business strategy to achieve profitability and
sustainability.
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