Harley-Davidson is an American motorcycle manufacturer founded in 1903. It has 5,700 employees and is headquartered in Milwaukee, Wisconsin. Harley-Davidson has a 45% market share in the US heavyweight motorcycle market. While it faces competition from Honda, Yamaha, and Kawasaki, it was one of only two motorcycle companies to survive the Great Depression. A PEST analysis found political, economic, social and technological factors impact Harley-Davidson, such as free trade agreements and increasing attitudes about leisure activities. Porter's Five Forces analysis found high rivalry in the industry and a moderate threat of new entrants. A SWOT analysis identified Harley-Davidson's global footprint and brand loyalty

1. IT’S NOT THE DESTINATION, IT’S THE JOURNEY

2. QUICK FACTS
• Company Name: Harley-Davidson, Inc.
• Ticker Symbol: HOG(NYSE)
• Headquarters: Milwaukee, Wisconsin, United States
• Year of incorporation: 1907
• Year of IPO: 1986
• Number of shares outstanding: 167 million
• Number of employees: 5700 full-time employees
• Industry: Motorcycles and related products, Financial
services
• Chief Executive Officer: Matthew Levatich

3. INDUSTRY OVERVIEW
• Company Business Harley-Davidson is the leading factor in
the U.S. heavyweight motorcycle market with a 45 percent
market share.
• Harley-Davidson owns a twenty percent market share
followed closely by Honda, Yamaha, and Kawasaki.
• Out of the 151 motorcycle manufacturers, Harley-Davidson
was one of the only two companies to survive the Great
Depression.
• The recent performance of the company was moderate,
mainly due to economic down turns and market
fluctuations; despite this, the price earning ratio and
earning per share are significantly strong .

4. PEST
 This form of business analysis examines the external
environment of a business.
 It can provide a quick and visual representation of the external
pressures facing a business
 It is usually divided into four external influences on a business
• P – Political
• E – Economic
• S – Social
• T – Technological

5. POLITICAL
• Free trade agreements: Harley-Davidson benefits from free trade
agreements, which facilitate the company’s global expansion. However, such
a political external factor threatens the business by increasing the influx of
cheaper products or substitutes that compete against Harley-Davidson.
• Increasing support for e-commerce : It creates opportunities for the company
to improve its market reach through online media.
• Improving inter-governmental support for patent protection : Harley-
Davidson also has better patent protection for its products, based on
intergovernmental efforts on patent law.

6. ECONOMIC
• Economic stability of major markets : The economic stability of major
markets presents opportunities for Harley-Davidson to stably grow its
business in its core markets, especially in the United States.
• Economic growth of developing countries: The company has
opportunities for rapid growth and expansion in some high-growth
developing countries where there is demand for chopper motorcycles.
• Stable credit accessibility : The stable credit accessibility could support
competitors, which threaten Harley-Davidson. Nonetheless, the company
can capitalize on its economies of scale to protect its business from
competition in the remote or macro-environment.

7. SOCIAL
• Increasing attitudes about leisure: The increasing attitudes about
leisure create opportunities for the firm to market its products as
leisure motorcycles.
• Increasing involvement of women in chopper biking: The
increasing involvement of women in chopper biking presents an
opportunity for Harley-Davidson to increase its marketing efforts
to target female customers.
• Increasing attitudes about green technology

8. TECHNOLOGY
• Increasing availability of green technologies
• Moderate R&D investments in the motorcycle industry
• Increasing use of computing technology in vehicles
• Development of additional safety features in motorcycles.
• Incorporation of intelligent and automated technologies in
motorcycles.

9. PORTER’S FIVE FORCES
rivalry among
existing
competitors
Threats of new
entrants
Bargaining power
of buyers
Threat of substitute product or
services
Bargaining power
of supplier

10. PORTER’S ANALYIS
BARGAINING POWER OF BUYERS: High
Easy access to substitutes imposes a strong force against Harley
Davidson.
BARGAINING POWER OF SUPPLIERS: Low
• Harley-Davidson’s suppliers are weak because they have minimal
forward integration. This means that the suppliers have low control
on the distribution and sale of their products to companies like
Harley-Davidson.
• Because of the high stability of supply, individual suppliers have low
leverage in imposing their demands on Harley-Davidson.
THREAT FROM SUBSTITUTES: Moderate
There are many substitutes to Harley-Davidson’s products. For example,
cars and public transportation are available. This condition exerts a
strong force on Harley-Davidson. However, the overall threat of
substitution against the company is only moderate because customers
who are really into using chopper motorcycles are less likely to readily
shift from Harley-Davidson to such substitutes

11. PORTER’S ANALYIS (..cont.)
THREAT OF NEW ENTRANTS: Moderate
Companies like Harley-Davidson benefit from
moderate economies of scale. Only some new
entrants can easily achieve the same benefit.
RIVALRY AMONG EXISTING FIRMS: High
This industry is characterized by rapid growth, and
fierce competition.
The competitive rivalry is strong and ongoing in this
industry because large amounts of advertising dollars
flow to the website that has captured the largest
volume of searches.

12. A strategic planning tool that separates influences on a
business’s future success into internal and external
factors
• Strengths
• Weaknesses
• Opportunities
• Threats
SWOT ANALYSIS

13. SWOT OF HARLEY DAVIDSON
STRENGHTS
• Huge global footprint-
business in close to 100
countries worldwide
• Strong marketing policies
maintaining a high brand
image, trust and consumer
loyalty
• Integrated services to the
bike consumers including
parts & accessories and
financing options.
WEAKNESSES
• Greater reliance on third
parties for company
operating and administrative
activities
• Less market share outside
domestic market in
international countries
• Decrease in net income for
the company by 8%
OPPORTUNITIES
Wide gamut of trade
agreements by the home
government with exporting
countries coupled with global
and domestic economic growth
THREATS
Rising competition from local
players in global markets.

14. RATIO ANALYSIS
1. EBITDA Margin:
EBITDA margin = (EBITDA/Net sales)
HOG is doing fairly good as compared to its competitors.
15.86 11.96 11

15. RATIO ANALYSIS
2. Net Profit Margin:
In terms of net profit margin, HOG is good to its competitors .
9.7 7 6

16. RATIO ANALYSIS
3. Return on Assets:
• This ratio tells us how much profit a company is able to generate for each dollar of assets invested.
• HOG is comparable with its competitors Honda and Suzuki.
7.44 6 7

17. RATIO ANALYSIS
4. Return on Equity:
HOG is ahead in ROE with its competitors.
30.29 14 18

18. RATIO ANALYSIS
5. Current Ratio:
HOG is in a moderate position to pay its current liabilities on time as compared to its competitors.
1.35 1.23 1.56

19. RATIO ANALYSIS
6. Price to Earnings Ratio:
The PE ratio of HOG is approximately equal to Suzuki and much greater than Honda.
13.86 5.32 13.97

20. RATIO ANALYSIS
7. Asset Turnover Ratio:
HOG has a low Asset turnover ratio, Honda is far better than its competitors in this regard.
0.54 2.18 1.16

21. RATIO ANALYSIS
8. Price to Sales Ratio:
HOG is far ahead of its competitors in-terms of Price to Sales ratio.
1.33 0.38 0.69

22. RATIO ANALYSIS
9. Debt to Equity Ratio:
• The most widely used measure of a company’s leverage, debt to equity ratios greater than 1 indicate the company may
be overleveraged, and stretching itself financially.
• HOG has a high debt to equity ratio.
2.25 0.87 0.45

23. HISTORICAL STOCK PERFORMANCE
SOURCE: https://www.macrotrends.net/stocks/charts/HOG/harley-davidson/stock-price-history

24. Anil Verma
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