The document is a strategic plan submitted by Stacey Wagner for Professor Don Looney's Business Policies and Strategies course. It includes Harley-Davidson's vision, mission, and external and internal assessments. The external assessment examines factors like industry growth rates, competitors, and geographic markets. The internal assessment reviews Harley-Davidson's finances, strengths, weaknesses, and strategies. The plan proposes long-term objectives and annual goals, along with pro-forma financial statements to project future performance.
A case study presentation on the various aspects of Harley Davidson entry into Indian market. The questions answered include organisational readiness, Leadership, Strategy, Marketing & Sales and Segmentation.
Visit www.tas2014.wordpress.com to know more about TAS process
This is for educational purpose only. If you own any of the content please let me know. We are not here to hurt anyone's emotion. Please try to co-operate and use this for educational purposes only.
History behind the Honda company. product line. problem generated. manufacturing. analysis using BCG. Strategies adopted by Honda like corporate level strategy, business level,etc. Marketing strategies. Success story.
Strategic Management
We Also Provide SYNOPSIS AND PROJECT.
Contact www.kimsharma.co.in for best and lowest cost solution or
Email: amitymbaassignment@gmail.com
Call: 9971223030
Bechtel is a Global EPC company and it recognizes that women are important contributors at all levels, to the success of its projects and organization. This session will summarize the steps taken by employees at Bechtel to stand up Women@Bechtel, Bechtel's first Employee Resource group for women. This presentation will describe the grassroots efforts, logistical challenges coordinating a global team, benefits of lessons learned from other ERGs and the important elements needed to stand up an ERG at your Company.
Nurdan Şahin-Genel Müdür: "......Dr. Emre Erdoğan ve İnfakto Araştırma Şirketi ile geçtiğimiz yıllarda birbirini takip eden 3 araştırma çalışması yaptık. 2008 yılında “Türkiye’de Gençlik, Gönüllülük ve Sosyal Sermaye”; 2009 yılında “Gönüllülük ve Kazanımları”; 2010 yılında “Sürdürülebilir Gönüllülük” başlıkları altında yapılan bu çalışmalar, ilgili yılların, yine TEGV tarafından düzenlenen Dünya Gönüllüler Günü Konferanslarında kamuoyu ile paylaşıldı, web sitemize kondu, küçük bir kısmı da TEGV ETKİ ARAŞTIRMASI adlı çalışmamızda yayınlandı. Ancak, konu ile ilgili kaynakların azlığını da göz önüne alarak, 3 araştırmayı bir bütünlük içinde ve geneli ilgilendirecek kısımlarıyla kitaplaştırarak, tüm ilgilenenlerin yararlanmasını arzu ettik.Bu çalışmanın hem Türkiye’de gönüllülüğün yaygınlaşmasına hem de STK’lardaki gönüllü koordinasyonuna katkı yapmasını umuyor, araştırmaları yürüten ve kitaplaştıran Dr. Emre Erdoğan’a; araştırmaları gerçekleştiren İnfakto ekibine ve büyük destek sağlayan
TEGV merkez ve saha personeline yürekten teşekkür ediyoruz. Teşekkürün en büyüğünü ise, hiçbir karşılık beklemeden emeklerini ve zamanlarını toplum yararına sunan ve bu önemli çalışmanın gerçekleştirilmesinde katkı sağlayan, en büyük gücümüz, gönüllülerimiz hak ediyor."
A case study presentation on the various aspects of Harley Davidson entry into Indian market. The questions answered include organisational readiness, Leadership, Strategy, Marketing & Sales and Segmentation.
Visit www.tas2014.wordpress.com to know more about TAS process
This is for educational purpose only. If you own any of the content please let me know. We are not here to hurt anyone's emotion. Please try to co-operate and use this for educational purposes only.
History behind the Honda company. product line. problem generated. manufacturing. analysis using BCG. Strategies adopted by Honda like corporate level strategy, business level,etc. Marketing strategies. Success story.
Strategic Management
We Also Provide SYNOPSIS AND PROJECT.
Contact www.kimsharma.co.in for best and lowest cost solution or
Email: amitymbaassignment@gmail.com
Call: 9971223030
Bechtel is a Global EPC company and it recognizes that women are important contributors at all levels, to the success of its projects and organization. This session will summarize the steps taken by employees at Bechtel to stand up Women@Bechtel, Bechtel's first Employee Resource group for women. This presentation will describe the grassroots efforts, logistical challenges coordinating a global team, benefits of lessons learned from other ERGs and the important elements needed to stand up an ERG at your Company.
Nurdan Şahin-Genel Müdür: "......Dr. Emre Erdoğan ve İnfakto Araştırma Şirketi ile geçtiğimiz yıllarda birbirini takip eden 3 araştırma çalışması yaptık. 2008 yılında “Türkiye’de Gençlik, Gönüllülük ve Sosyal Sermaye”; 2009 yılında “Gönüllülük ve Kazanımları”; 2010 yılında “Sürdürülebilir Gönüllülük” başlıkları altında yapılan bu çalışmalar, ilgili yılların, yine TEGV tarafından düzenlenen Dünya Gönüllüler Günü Konferanslarında kamuoyu ile paylaşıldı, web sitemize kondu, küçük bir kısmı da TEGV ETKİ ARAŞTIRMASI adlı çalışmamızda yayınlandı. Ancak, konu ile ilgili kaynakların azlığını da göz önüne alarak, 3 araştırmayı bir bütünlük içinde ve geneli ilgilendirecek kısımlarıyla kitaplaştırarak, tüm ilgilenenlerin yararlanmasını arzu ettik.Bu çalışmanın hem Türkiye’de gönüllülüğün yaygınlaşmasına hem de STK’lardaki gönüllü koordinasyonuna katkı yapmasını umuyor, araştırmaları yürüten ve kitaplaştıran Dr. Emre Erdoğan’a; araştırmaları gerçekleştiren İnfakto ekibine ve büyük destek sağlayan
TEGV merkez ve saha personeline yürekten teşekkür ediyoruz. Teşekkürün en büyüğünü ise, hiçbir karşılık beklemeden emeklerini ve zamanlarını toplum yararına sunan ve bu önemli çalışmanın gerçekleştirilmesinde katkı sağlayan, en büyük gücümüz, gönüllülerimiz hak ediyor."
Overview of current vulnerability approaches and methods for the Global Climate Adaptation Partnership's Adaptation Academy. Tom Downing (based on a decade of work on vulnerability indicators). March 2011
The Youth Mental Health Network (YMHN) is driven and made up of a range of individuals and groups that are passionate about improving the mental health of young people, regardless of their background.
The Youth Mental Health Network's vision is to improve the provision of youth mental health services by harnessing and fostering commitment to evidence based youth mental health services, in their various forms.
Общероссийский форум "Частные операторы коммунальной инфраструктуры" пройдет 11 ноября 2014 года в Москве на площадке "Конференц-центра Swissotel Красные Холмы"
Business Unit Analysis Directions Create a Feasibility St.docxRAHUL126667
Business Unit Analysis
Directions: Create a Feasibility Study for Harley-Davidson using the following outline:
Part I: Differentiation Strategies
The analysis of current strategy and competitor analysis you conducted last module impressed the
senior vice president. She now needs you to delve into the brands and analyze them by conducting a
business unit analysis and presenting your findings in a three-part PowerPoint presentation.
Research the Harley-Davidson (H-D) Web site for each brand and review the annual report for relevant
details of the size, scope, target market, services and amenities, and other salient points of
differentiation. Include these details in Part I of your PowerPoint presentation.
From the research and analysis of the business units, identify:
• A description of each brand that provides a clear picture of the brand and its place in the overall
portfolio of Harley-Davidson.
• The target market of each brand.
• How the brands are alike and how they differ.
• A preliminary analysis of any gaps that exist in the portfolio that might lead to opportunities to
add to the brands.
• Your analysis of possible merger/acquisition/joint venture possibilities and what would be
achieved or accomplished through the merger/acquisition/joint venture.
Part II: SWOT Analysis
Perform a SWOT analysis for Harley-Davidson and include this information in Part II of your PowerPoint
presentation.
• Based on the internal analyses of the SWOT analysis, assess the functional areas, resources,
capabilities, and strengths H-D possesses. Please be sure to cover the following functional areas
in your assessment:
o Marketing: New product development, integrated marketing planning,
marketing communications, and building customer loyalty.
o Operations: Quality, service, and consistent execution.
o Human Resources: Hiring, training, developing talent, and performance
planning. Avoided lawsuits and bad PR due to its hiring practices. Is ethical in its
HR practices.
o Executive Leadership: Industry knowledge and experience, vision about where
the industry is heading, and strategy execution.
o Supply Chain Optimization: Strategic sourcing of input, vendor management,
integrated IS, and joint forecasting with suppliers.
o Corporate Responsibility and Ethics: Concern for corporate citizenship and the
environment. Present any potential ethical concerns as well.
o Safety and Quality: How the motorcycle industry is dealing with safety and
quality issues.
Part III: Growth and Profitability Strategies
In addition, the executive board is interested in your ideas about bold strategies for the future. The
strategies you recommend will have to contribute to growth and profitability, as outlined in the Annual
Report.
You will want to pay special attention to exploring vertical integration, strategic alliances, and the
internal growth of new brands entering new geographic markets, and ...
Innovation and Competitive Advantage on Changi.docxcarliotwaycave
Innovation and Competitive Advantage on Changing Environments
Any business need to create ways to have competitive advantages as this is the only way it can remain relevant and competitive despite the strong competition in the sector of specialization. According to Hisrich (2014), “working towards achieving a competitive advantage should be the core goal within the management philosophy.” The more reason is that lack of competitive advantages exposes a business to even slightest competition and the business can be easily locked out of business. In the present world, there are a high number of companies that have succeeded in boosting their competitive advantages. As a matter of reality, such companies have managed to be ahead of competition and competition sees them as roles models to the point of trying to copy their operation strategies.
One of such companies is the General Motors Company which is the global leader in the automotive industry. Over the years, General Motors has managed to increase its global market share due to the enormous competitive advantages that the company has managed to build and maintain. The main focus of this essay shall be to explore the General Motors competitive advantages and how the company manages to retain them. Secondly, the essay shall review General Motors organizational leadership philosophy on innovation applied by the company as well as activities that the company takes an active part in to sustain its competitive advantage. Lastly, the essay shall review the research and development initiatives that are employed for long-term competitive advantage.
General Motors was established in 1908 under the leadership of Billy Durant. The company was formed as a consolidation of several motor vehicle companies namely Buick, Oldsmobile, Cadillac, Oakland, Ewing, Marquette, and other autos as well as Reliance and Rapid trucks. General Motors headquarters is in Detroit, Michigan, United States but currently, the company has a lot of subsidiaries and outlets all over the world. This is to mean that the company products are sold across the board by different General Motors dealers and offices as they are established in almost all countries.
Since General Motors establishment it has had different individuals taking leadership positions. However, the initial founders developed an innovation philosophy that is applied by all leaders heading the company outlets in different locations across the globe. This innovative philosophy is that the world is an ever-changing thing and that people need quality, stylish, and modern motor vehicles (Greer, 2012). Hence, the company believes that for it to remain competitive in the automobile industry, it must offer the market with the most unique, high-quality, durable, and diverse motor vehicles. The company embraces innovation as this is the only way that new design of products that are unique and meets the clients’ needs can be developed (Hisrich, 2014). The leadership also ha ...
As managers acquire experience some of what they had utilized with.docxbob8allen25075
As managers acquire experience some of what they had utilized with regards to their managerial styles change (Bauer and Erdogan, 2015). For this week, after reading the article on what makes a great manager by Buckingham as cited in HBR (2011) as well as viewing the video that is located under Media and adding other professional resources that you have read, discuss your personal experiences with either how you have seen a manager alter his/her style as time went by or your own personal experience with it.
The discussion post this week should address two items:
1. Share examples of what you have learned about managing so that the optimum performance, as well as motivation from a team, has been the results. Take into consideration the article from the last discussion by Walker as cited in HBR (2011) with regards to novice managers and compare the two author's ideas about management styles. You may also refer to the other readings and video selections provided in the course if that is a better fit for your work and helps you to build out your research paper.
2. Additionally, please research for the upcoming research papers and share two sources in your discussion thread that speaks to your topic area. You may use a selection from our coursework or a new source. Please share a comment about how your topic area is relevant to managing and leading others or your approach to the research paper, and why this is an important topic to you.
Reference
Bauer, T. & Erdogan, B. (2015). Organizational behavior V2.0. Washington, DC: Flat World.
Harvard Business Review. (2011). HBR's 10 must reads: On managing people. Boston, MA: Harvard Business Review Press.
Audi and the Audi Cup case
In the ‘Audi and the Audi Cup’ case, select one of the key stakeholders and develop a new brand concept which leverages a sponsorship asset which has not featured prominently in recent activations.
When developing this concept, explain:
i. Why have you chosen this sponsorship asset?
ii. How will this asset compliment or help achieve key objectives for Audi?
iii. How can you make this activation scalable (i.e. Increase in size, reach) without significantly increasing the budget?
iv. What KPI’s could be used in order to measure the success of this activation?
v. Name two Critical Success Factors that will influence the outcome or success of this activation for the stakeholder you have chosen.
Guidance to answering Activity
When developing concepts for sponsorship activation for a brand (sponsor) there is a tendency to start with an ‘idea’. Perhaps you will have an idea which is creative and different to other activation ideas that have not been used by this particular brand or partner (i.e. football club or cycling team). This does not always lead to the best fit ot address the marketing or business objectives of the sponsor.
When assessing the suitability and strength of concepts for sponsors, there are a number of .
Running Head CONDUCTING AN ORGANISATIONAL ASSESSMENT1AN ORGANI.docxtodd271
Running Head: CONDUCTING AN ORGANISATIONAL ASSESSMENT 1
AN ORGANISATIONAL ASSESSMENT 12
LASA 1—Conducting An Organizational Assessment
Sean Markl
Argosy University
Operational Management
September 26, 2018
There are very many issues that determine whether an organization is going to fail or succeed in a given environment. Competition keeps increasing and the dynamics of doing business change with time. Consumer demands and preferences as well as government’s laws and regulations for doing business also change with time. An overall organizational success encompasses the inclusion of all the stakeholders such as employees and shareholders, and the harmonization of its goals and missions. With all these in mind, an organization ought to develop an effective structure, a powerful strategy and a good culture since its success or failure heavily depends on these factors more than anything else.
The Organizational Structure
This is the arrangement or the framework by which different activities are laid out and how individual or team work are coordinated in an organization. To achieve goals and different objectives of the organization all the activities and roles in an organization should be well coordinated, controlled and managed. The organization structure is a tool that should never be neglected. It helps to show who does what and who reports to whom (Thompson, 2018). These reporting relationships are very valuable and result to unity of command.
A good organization structure eases the flow of formal communications within the organization. This is because it outlines the channels of communication and how different actions of the stakeholders are related or linked together. Structure helps different personnel in the organization to work together for a common goal.
There is no structure that can be said to be the best. For example, an organization needs to consider its strategy and have clearly outlined responsibilities and roles, clear communication channels and defined procedures in order to select a good structure. A good structure helps the business to:
· Improve staff morale.
· Avoid excessive meetings
· Make quick and effective decisions
· Reduce conflict among teams and departments
· Have coordination
· Reduce costs
· Be responsive to changes
The Strategy
This is a combination of all the plans, ideas and actions that an organization intends to take in order to achieve set goals. The strategic plans may be for short term, medium term or even long-term goals. The strategy maps the route that the business will take in order to achieve its goals and visions.
With time the strategy of a business can change even if the goals remain the same. It does not have to be inflexible. This allows the business to incorporate changes in the internal and external environment and also take advantage of new opportunities that may arise in the course of running the organization. An organization needs a strategy for various reasons as situations m.
The purpose of this handbook is to provide a comprehensive guide on the BDPA Corporate Sponsorship Programs that is used by BDPA on a local, regional and national basis. Several views are presented for clarity. The intended audience is BDPA members who engage in corporate sales activities and BDPA leadership on the local, regional and national level. This handbook is the responsibility of the Corporate Sales Department Director and should be reviewed for updates on an annual basis.
In order for corporate sales efforts to be effective, all individuals selling BDPA sponsorship should have an understanding of the overall program as provided by this document and are required to work in a united, cooperative effort toward acquiring funding.
1 Chapter 7. Supporting Business Strategy through Funct.docxaryan532920
1
Chapter 7. Supporting Business Strategy through Functional Strategies
In 2015, India’s packaged fruits drink market was valued at Rs. 11 billion (~US$200 million).
Dabur held a 55% share of the market, followed by PepsiCo at 30%; up from 50% and 25%
respectively a decade back. Fewer than 20% of the people in India consume fruit juices as part
of their diet, as compared to ~40% who consumed bottled water and ~60% who consumed coffee
and soft drinks. Over the past decade, the market has grown by 15-20% annually because of the
rising health-consciousness, and is expected to sustain that growth over the coming years. The
government of India has set targets to triple the size of processed food sector, by increasing the
level of processing of perishables from 6% to 20%, and value addition from 20% to 35%, as a
way to raise farm incomes (Sharma, 2015).
Dabur has been sourcing mass-produced lychee, guava, grapes, and mango juices from
the domestic vendors, and orange, apple, and pineapple concentrates from the overseas suppliers.
To be more responsive to the consumer needs, Dabur has been buying fruits directly from
farmers since 2004, and is processing them in-house in a new plant it set-up in Siliguri, West
Bengal. It has also migrated to a flexible production system to offer fruit in a variety of
specialized forms, such as juice, sauce, puree, smoothie, paste, and ketchup.
To grow its share of the overall market and grow even faster than the market, Dabur has
used customized Research and Development to boost the share of the under-served institutional
segment in its total sales from a fourth in 2003 to a third now. Amit Burman, the then CEO of
Dabur, noted, ‘Often, products are created when our [institutional] buyers tell us about their
culinary problems, which could range from getting pre-chopped onions in bulk to mixing the
best juice and yoghurt smoothie. As we have the experience and the network, and there is ample
capacity available in the country, it is easy for us to offer solutions (Srinivas, 2003).’
More flexible operations and sourcing system, and institutionally led marketing and
research effort has also helped Dabur realize its strategic intent of becoming a leader in the
broader processed fruits market, beyond just juices and concentrates.
In the previous chapter, we learnt about the three different types of business strategies –
cost leadership, differentiation, and growth mindset (besides ‘focus’). In addition to deciding
the overall strategy for their business, executives also need to develop and align functional core
competencies. Dabur’s growth business strategy has required new competencies in supply chain,
research and development, operations, and marketing. Each function relies on different and
specific techniques and technologies to achieve the common business objectives of cost
efficiency, customer and quality ...
Leading Innovation and Change Best Practice Case Study Cl.docxcroysierkathey
Leading Innovation and Change: Best Practice Case Study
Client - a company synonymous with the term innovation. Since its inception, the company
founders have instilled a belief in unique product creation, including life altering product
innovations such as the light bulb envelope, TV tube, and optical waveguides. This concept of
innovation has been deemed one of the company's most essential quality programs, bridging
functional groups within the organization, renewing itself through continued time and iterations.
For the client, innovation not only challenges traditional ways to thinking, but has become a key
impetus to drive change. Innovation converts ideas into opportunities.
The client began its journey with the realization that the rate of new product development would
be insufficient to maintain company profitability in the future. In the late 1970's and early 1980's
there was a cycle of small pockets of promising technological advances, defensive moves, and
diminishing returns. Previously the company's innovation processes had been defined only within
the areas of research, product development, and engineering. The client began by analyzing past
innovations and the successes and failures associated with each, and benchmarking their own
best practices and lessons learned.
The client has defined innovative effectiveness as: requiring an understanding of overall
corporate and business strategies; developing organizational roadmaps based on customers, the
market, competitors, strengths and weaknesses, and resources; ability to evaluate, prioritize, and
select projects; and executing the selected project well. The key elements of innovation
intervention are: an innovation task force, composed of key innovators; the utilization of company
history as a resource for innovation; a focus on strengths and resources in a project of paramount
importance, referred to as "flexible critical mass;" and a two-and-a-half-day innovation conference
for 200 company leaders which focuses on reintroducing the innovation process.
Through the work conducted by the task force, not only were successes analyzed, but so were
areas in which the organization had fallen short over the years. By improving innovation by 10%
per year, costs could be cut in half, and doubling that rate would be equivocal to doubling the
RD&E spending level. This success would come down to the restoration of simple fundamentals:
- An environment and culture of energy and enthusiasm
- Entrepreneurial behavior at all levels
- The right people in the right places
- Sound business and technological strategies
- Improved processes for nurturing ideas
- Organizational mechanisms that could support the organization's drive for results.
Critical success factors also emerged from the client’s innovation conference, focusing on:
training programs at all levels within the company which would become a part of project reviews
and the deployment of empl ...
Running head Harley-Davidson External and Internal Analysis1H.docxcowinhelen
Running head: Harley-Davidson: External and Internal Analysis 1
Harley-Davidson: External and Internal Analysis 2[Title Here, up to 12 Words, on One to Two Lines]
John E. Lasky
Argosy University
Deborah Shearer
BUS499 – M5A1
19 January, 2018
[Title Here, up to 12 Words, on One to Two Lines]
Table of Content
Executive Summary……………………………………………….…………...………….3
Analysis of the External Environment (PART ONE) …………….….………………..…3
Results from Scanning…………………………………….………………………3
Results from Monitoring………………………….………………………………5
Competitive Environment………………………….……………………………...5
Strategic Challenges/ Issues facing the Industry………………………………….6
Internal Environment Analysis (PART TWO) ……………………………...……………6
SWOT Analysis…………………………………………………………………...6
Value Chain Analysis…………………………………...………………………...8
Strategic Plan Summary……………………………………..……………………………9
Conclusions…………………………………….……………………….….…….10
Recommendations……………………………….……………………….………10
Implementation………………………………………………………….……….10
Risks……………………………………….…………………………….……….10
References………………………………………………………………………..11
Executive Summary
There are several challenges that face business ventures which may be labelled as being generated from an internal or external environment. The motorcycle industry along with Harley-Davidson is not immune from in this paradigm. Firms need to adjust accordingly to these environmental changes for them to continue surviving and thriving. Some of these major external and macro-environmental challenges include technology, demographics, and the economic, socio-cultural, political and legal environments. This paper will look at the company’s external and internal environment.
External Environment Analysis
Results from Scanning
As mentioned above, the motorcycle industry and Harley-Davidson are not exempt. Firms need to adjust accordingly to these environmental changes for them to continue to survive and thrive into the future (Schembri, 2009). Some of these major external and macro-environmental challenges include technology, demographics, and the economic, socio-cultural, political and legal environments.
Results from Monitoring
From a monitoring perspective, the economic system and structure that is prevailing around an organization need to be comprehended for the business to put in place necessary measures aimed at achieving compliance (Schembri, 2009). For instance, the conditions of a boom or recession within the economic systems which may be socialist, capitalist or a mixture of the two.
Competitive Environment
Porter’s Five Forces Model
Porter’s five forces competition model that shape competition include competitive rivalry, bargaining power of suppliers, bargaining power of customers, the threat of new entrants and threat of substitute products and services in the market (Arline, 2015). Competitive rivalry examines and assesses the intensity of rivalry in the market. It is assessed by the number of competitors in business and their strength. Besides competitive rivalry, bargaining ...
Running head Harley-Davidson External and Internal Analysis1H.docx
Kaleidoscopeconsultingllcd
1. HARLEY-DAVIDSON STRATEGIC PLAN
Submitted by
Stacey Wagner
Prepared for
Professor Don Looney
Business Policies and Strategies
Spring 2007 2
TABLE OF CONTENTS
VISION STATEMENT .................................................................................................... 3
MISSION STATEMENT ................................................................................................. 3
EXTERNAL ASSESSMENT ........................................................................................... 3
External Audit ................................................................................................................. 3
Porter’s Five Forces Analysis ......................................................................................... 7
External Factor Matrix .................................................................................................... 8
Table 1 ................................................................................................................ 8
Competitive Profile Matrix ............................................................................................. 9
Table 2 ................................................................................................................ 9
INTERNAL ASSESSMENT .......................................................................................... 10
Key Internal Forces ....................................................................................................... 10
Financial Ratio Analysis ............................................................................................... 12
Table 3 .............................................................................................................. 12
Internal Factor Evaluation Matrix ................................................................................. 16
Table 4 .............................................................................................................. 16
SWOT MATRIX ............................................................................................................. 17
Table 5 .............................................................................................................. 17
2. SPACE MATRIX ............................................................................................................ 18
Table 6 .............................................................................................................. 18
GRAND STRATEGY MATRIX ................................................................................... 20
Table 7 .............................................................................................................. 20
LONG-TERM OBJECTIVES AND STRATEGIES ................................................... 21
ANNUAL OBJECTIVES ............................................................................................... 21
PRO-FORMA FINANCIAL STATEMENTS .............................................................. 22
Table 8 .............................................................................................................. 23
Table 9 .............................................................................................................. 25
Table 10 ............................................................................................................ 26
BIBLIOGRAPHY ........................................................................................................... 283
VISION STATEMENT
We at Harley-Davidson are a worldwide manufacturer of motorcycles and related
products and focus on providing a unique lifestyle for our customers.
MISSION STATEMENT
At Harley-Davidson, we provide our customers around the world with an
aggressive outdoor lifestyle through superior products and service. Through modern
technology, we provide the latest in safety and environmentally friendly engineering in
our products. We focus on safety and harmony within the workplace. At HarleyDavidson, we do not
simply sell motorcycles; we improve our customers’ lives through
recreational opportunities.
EXTERNAL ASSESSMENT
External Audit
An external audit assesses the industry that Harley-Davidson operates in. The
U.S. motorcycle market value grew 7.7% from 2001-2005. Market volume grew 6.4% in
the same time. The U.S. market accounts for 25% of the global motorcycle market.
3. Honda and Yamaha are the other leading competitors, next to Harley-Davidson, in the
U.S. market. Market value is expected to grow 7.1% from 2005-2010. Market volume is
expected to grow 7.5% in the same time period.
1
The motorcycle market value in Europe declined .8% from 2001-2005. Market
volume also decreased 1.6% in the same time period. More moped products are sold in
Europe than motorcycles. Honda and Yamaha have the largest market share in Europe.
Harley Davidson is an organisation which had made the consumers to adopt its culture and the
consumers find the organisation as part of their life style. Further, it is a movement that inspires
owner to embrace their own special language. Thus, the organisation success is nothing a short
story of innovation. Harley Davidson has competed successfully with the Japanese rivals such as
Honda, Suzuki, Yamaha, and Kawasaki producing low cost, low quality bikes throughout the
past years. Further the market share declining from 80% to 20% during the period of time.
Therefore, the report shall discuss the concepts of innovation and the change process involved
with Harley Davidson in comparison to the case study provided.
Innovation can be defined as ‘an idea must be replicable at an economical cost and must satisfy
a specific need. Innovation involves deliberate application of information, imagination, and
initiative in deriving greater or different value from resources, and encompasses all processes by
which new ideas are generated and converted into useful products’ (businessdictionery.com,
2007) It is crucial to identify the four elements of innovation. In order to, analyse the concepts
of innovation of Harley Davidson. The four elements are as follows as shown in the Table 01.
The above discussed four elements of innovation are highly relevant for Harley Davidson in
making innovation the key strategy to make the organisation successful. As in 1983 the US
President Ronald Reagan’s decision in increasing tariffs on the Japan’s motorcycle import
helped the motorcycle industry of US which was a positive development for Harley Davidson
4. (HD). Nevertheless, the new tariff policy was valid only for the five years period which reduced
annually thereafter. Thus, HD had to make successful progress, and improvement in the market
to survive in the long run. HD took up the challenge in been innovative and in order to
implement the strategy of innovation within the organisation to beat the competition of the
Japanese rivals. The innovation became the key tool in improving the performance level of the
organisation at all the levels such as marketing and customer relations, organisational changes,
process and manufacturing practices. (icmrindia.org, 2007)
HD was generating all the innovative ideas in all the areas of the organisation in implementing
the innovative strategy in gaining the positive outcomes. HD had to think and generate the
ideas at each time in competing with the Japanese. As in 1980’s the organisation was not
capable in meeting the production targets on time. Since HD adapted the batch process of
materials in the plant floor. (industryweek.com, 2002)
The materials were tooled in large batches at different locations in the plant and workers had
to make use of forklifts in order to move the materials around the factory which resulted in
high set up times. Meantime, the Japanese adapted Total Quality management in the
organisation. Therefore, HD has to think innovatively another approach in maximising the
benefits therefore the organisation implemented the Just in time approach (JIT). This helped
HD in dropping the cost level significantly. As a result of the JIT production approach the
company only sold 35,000 bikes instead of 53,000 in order to breakeven. Further, the
organisation adapted effective marketing strategies as 75% of Harley customers made repeat
purchases through effective brand campaigns and advertising. The organisation was capable in
gaining the customer loyalty form its customers again.
As part of the innovative strategy HD developed ‘Harley Owners Group’ which is stated as one
of the creative and innovative strategies that had helped in creating an excellent experience for
the product. The management of HD generated ideas in converting their product into an
experience. Further, organisation organised rallies in order to strengthen the bond or the
relationship with dealers, members, and the employees and at the meantime promoting Harley
experience to the consumers. Consequently, Harley Owners Group become immensely famous
5. by making the owners feels as their part of the Harley family. Thus, currently Harley group has
more than 450,000 members.
Further, organisation made changes to the working environment as the HD developed a healthy
relationship with its employees. The culture of the organisation adapted innovation as the
employees were given the opportunity participates and it was more open. HD communicated
and interacted with employees more effectively in the shop floor as it helped the organisation
in practising new strategies. Further, the work unions were based on harmony and trust.
Further, HD eliminated the positions of senior vice president in marketing in operations as
these positions didn’t add value to the final product. The people were auditors, the checkers.
The organisation has teams who are in charge of producing having a product supported team.
(webpronews.com, 2005)
Accordingly as part of innovation HD focused on new product development. HD focuses on new
product developed resulted on new product such as V-Rod. Further company adopted new
technology such as CPPDM methodology in achieving the new product developed. Also, the
organisation spent more financial resources on research and development in order to be
innovative and flexible towards the volatile business environment.
Consequently, the above discussed innovative procedures were implemented by HD to beat the
excessive competition in the US market.
Moreover, the company focused on cost effective approaches comparing to HD as Honda
concentrating on smaller, faster, and less expensive bikes. Honda adapted a step by step
approach where the company moved from one region to another and from light motorcycles (50
cc) to heavy motorcycles (250 cc). As, a new organisation to the US volatile and highly
competitive environment the organisation become successful through the sales level as one out
of every two cycles sold during the particular year was from Honda. (scribd.com, 2006)
The successful beginning of the Japanese rival Honda allowed the other Japanese competitors to
enter the market such as Yamaha, Suzuki, and Kawasaki. All these competitors followed the
same concepts and strategies used by Honda. This helped the organisation to attract the younger
6. riders, women, and the older riders. Further, most importantly the riders who could not afford the
expensive HD motorcycles.
Consequently, the Japanese competitors changed the motorcycle industry in US specially the size
of the motorcycles. The Japanese competitors were able to increase the annual sale rate of 33%.
Moreover, the Japanese competitors were skill full in producing the products mass fully. The
Japanese were also innovative as they were constantly producing the innovative products as
response to the existing marketing threats. Further, the companies had the best technologies in
producing the new products and launching the new models at the shortest possible time period.
Further, the companies were able to manage the financial resources of the organisation
effectively as the funds were generated appropriately in been innovative. Also, the consumers
were provided with customised products with the technological advancement in making it more
effective.
The strong performance level of Japanese competitors lead the fall down in HD as the shares
and the profit of the organisation reduced at a higher volume. Since HD was transferred in to
‘niche’ player. Even though HD was transformed from private ownership to public it was not
capable in driving enough funds to continue the organisation successful as the company faced
immense competition and pressure from the Japanese competitors. However, HD was able to
survive with the takeover of AMF.
The Japanese competitors notice that HD was imitating its techniques and recovering the
pressure and the competition of the Japanese companies. As a result the organisation targeted
HD. Honda use innovative strategy at its best by producing new motorcycle named as
Goldwing. At that period the product was named as one of the technologically sophisticated
and complex heavy weighted motor cycle. Since expected HD heavy weight motorcycle
segment started to decline. Further, at the meantime the economy was falling down by
reducing the demand for motorcycles. The Japanese kept on competing effectively with HD
through introduction of new products each time. Therefore the Japanese were using all the
competitive approaches and strategies in order to maintain the achieved market share in the
US. As John Bleustein the senior vice president stated that ‘the Japanese … were just better
managers…. and they understood how to do manufacturing a hell of a lot better, with less
inventory and high quality.’
7. 1
“Motorcycles in the United States,” DataMonitor, November 2006. 4
Future market value is expected to increase 4.4% from 2005-2010. Market volume is
expected to increase 4.5%.
2
From 2001-2005, market value for motorcycles in the Asia/Pacific region grew
9.2%. Market volume grew 8.3%. Two-thirds of products sold there are motorcycles;
one-third are mopeds. Honda has the largest market share. It is expected that market
value will increase 13.2% from 2005-2010, while market volume increases 9%.
3
Other external factors that may affect Harley-Davidson include the economy.
Economic factors include the stock market, interest rates, inflation, and unemployment
levels. In the past year, the Dow Jones Industrial Average has risen 16%.
4
Interest rates
increased only marginally in the same amount of time.
5
Unemployment remained
unchanged at 4.4% in the last year. Inflation was up 2%.
6
Overall, these factors indicate
a fairly strong U.S. economy and based on recent trends, this expected to continue.
Other external factors affecting Harley-Davidson include social, cultural, and
demographic changes. The average Harley owner is 47 years old and makes over
$80,000 per year.
8. 7
The U.S. population increased 1% from 2004 to 2005, while the
population over age 62 increased more than 2.5%. The median age of the U.S.
population increased from 36.2 to 36.4 in the same time period. The number of married
couples without children under the age of 18 stayed constant. The mean household
income increased over 4% to $62,556.
8
As aging couples with excess income are Harley-
2
“Motorcycles in Europe,” DataMonitor, November 2006.
3
“Motorcycles in Asia-Pacific,” DataMonitor, November 2006.
4
CNN Money, <http://money.cnn.com>, accessed on April 17, 2007.
5
Federal Reserve, <http://federalreserve.gov>, accessed on April 17, 2007.
6
Bureau of Labor Statistics, <http://www.bls.gov>, accessed on April 17, 2007.
7
Harley-Davidson Investor Relations, <http://investor.harley-davidson.com>, accessed on March 13,
2007.
8
U.S. Census Bureau, <http://factfinder.census.gov>, accessed on April 17, 2007. 5
Davidson’s target market, the aging population growth and income growth are good signs
for the company.
9. The U.S. veteran population has increased by 1.1%.
9
Veterans tend to be
motorcycle owners, and an increasing veteran population may be sign of market segment
growth for Harley.
10
Another area of untapped segment of growth for Harley is women.
Over four million women have owned a motorcycle in the past, but only 635,000
currently do.
11
Only 11% of Harley’s current buyers are female, but they are increasing
by .5% per year.
12
Political, governmental and legal changes are important as well. The
Environmental Protection Agency (EPA) regulates automobile and motorcycle emissions.
These regulations were most recently revised in 2004.
13
Future revisions could
negatively impact the motorcycle industry. Another concern is the price of raw materials
for motorcycles. Steel prices increased 57% from 2003 to 2004, and aluminum increased
by 24% in the same time period.
14
Further increases could force motorcycle companies
to pass the cost increases on to consumers, thus raising the price of the product.
10. Technology is constantly evolving. The widespread use of the Internet has
changed the way business is done. Communication across continents is easier and
cheaper than ever before. Computer-based inventory control systems could play a role in
managing motorcycle inventories. Currently Harley does not allow for transfer of
product between dealers, but a centralized computer system could make for an easy
HD was did not give up its operation rather took the competition of the Japanese as a
challenge. HD was strong in meeting the challenge through effective approaches in beating the
completion of the Japanese. Firstly, HD started to imitate the Japanese. As the organisation
clearly identified the loop wholes and where the organisation went wrong and how the
organisation can be back in the tracks. HD was taken over by AMF where AMF provided the
necessary financial resources in increasing the production. There were drawbacks of this
procedure as less skilled employees were part of production resulting to low quality products as
it was identified by Richard Teerlink Firm’s CFO where the reputation of HD for quality was
declined and the domestic market share dropped to 23%.
HD adapted different methods of production such as craft method in reaching the best quality.
However, few employees were able to achieve the quality but it was not successful overall. HD
found out in order to be successful it had to benchmark the performance of Honda in relation
to HD. Senior managers had tour in Honda plants in US and identified where the company need
to change in order to be successful.
9
U.S. Census Bureau, <http://factfinder.census.gov>, accessed on April 17, 2007.
10
Jim Burgess (Black Hills Harley-Davidson), speech given at Black Hills State University, March 27,
2007.
11
Sheila Seger (Lehman Trikes), personal interview, April 20, 2007.
12
Harley-Davidson Investor Relations, <http://investor.harley-davidson.com>, accessed on March 13,
11. 2007.
13
Environmental Protection Agency, <http://www.epa.gov>, accessed on April 17, 2007.
14
“Company Spotlight: Harley-Davidson Motor Company,” DataMonitor, October 2006. 6
transition.
15
Technology also impacts design. Today’s motorcycles are more reliable
because of technological change. Modern motorcycles also are relatively free of oil
leaks, vibration, and are more comfortable than those of the past.
16
Although Harley-Davidson has many competitors, its main competitors are Honda
and Yamaha based on their world-wide market share. Because Harley’s competitors are
more diversified, they are less vulnerable to industry changes. Honda and Yamaha also
offer products that sell well in the international markets compared to Harley.
17
Harley
products are more expensive than its competitors, but are known for service and
salability.
18
Models of motorcycles available include custom, touring, performance, and
standard models. Custom is the largest market segment in the U.S., with 53.9% of all
motorcycles on the road. However, touring bikes have increased in popularity with each
year, now comprising 27.2% of registered bikes. From 2004 to 2005, this increase was
12. over 30%.
19
Touring motorcycles are the most luxurious and easiest to ride of all models.
These models often include radios and cruise control. Victory, Honda, Suzuki, and
Harley have expanded their touring line of motorcycles to cater to the aging market.
Harley offers eight variations of the touring motorcycle.
20
Victory entered into an agreement with Lehman Trikes to produce three-wheeled
motorcycles under the Victory brand. These products will be fully supported by Victory
warranty, and will be marketed to aging adults as a safer way to ride. The “Pit Boss” was
15
Jim Burgess (Black Hills Harley-Davidson), speech given at Black Hills State University, March 27,
2007.
16
Sheila Seger (Lehman Trikes), personal interview, April 20, 2007.
17
“Company Spotlight: Harley-Davidson Motor Company,” DataMonitor, October 2006.
18
Sheila Seger (Lehman Trikes), personal interview, April 20, 2007.
19
Harley-Davidson Investor Relations, <http://investor.harley-davidson.com>, accessed on March 13,
2007.
20
13. Sheila Seger (Lehman Trikes), personal interview, April 20, 2007. 7
released for sale on July 31, 2006. Harley entered a similar agreement with Lehman
Trikes on September 1, 2006.
21
Porter’s Five Forces Analysis
The overall attractiveness of the motorcycle industry is average. The threat of
new competitors or supplier power is low, but consumers have the power to switch
brands and substitute products easily. There is also competition for market share among
rivals in the motorcycle industry.
22
Rivalry among competing firms is fairly high in the motorcycle industry. Brand
image is very important in the industry and products frequently compete directly with a
product of another manufacturer. Potential entry of new competitors is somewhat low in
motorcycle manufacturing because of start-up costs and loyalty already established by
existing firms. It would be a difficult task to gain market share from the existing giants in
the motorcycle business. The bargaining power of suppliers is a relatively small threat as
there are more suppliers than manufacturers.
Potential development of substitute products is a threat to the motorcycle industry.
Replacement products for motorcycles include boats, snowmobiles, and RVs because
these are all luxury recreational items. Motorcycle consumers are likely to weigh a
purchase decision against a substitute product. Motorcycle consumers tend to fit a
specific demographic profile and have discretionary income; therefore, the entire
population is not a potential buyer. Thus, the bargaining power of consumers is also a
threat to motorcycle companies.
23
14. 21
Sheila Seger (Lehman Trikes), personal interview, April 20, 2007.
22
“Company Spotlight: Harley-Davidson Motor Company,” DataMonitor, October 2006.
23
Ibid. 8
External Factor Matrix
Table 1
EFE Matrix
Key External Factors Weight Rating Weighted Score
Opportunities
1. Aging U.S. Population .20 4 .80
2. Strong U.S./Canadian market growth .20 4 .80
3. Increasing number of women riders .10 2 .20
4. Very strong growth in Asia .03 1 .03
5. Very strong growth in Mexico .03 1 .03
Threats
6. Aging U.S. Population .04 2 .08
7. Competitors are more diversified .10 1 .10
8. Union relations .05 2 .10
9. Declining European growth .05 2 .10
10. Availability of substitute products .20 1 .20
Total 1.0 2.44
Harley-Davidson excels at focusing on the baby-boomer motorcycle market
15. segment in the U.S.; however there are several opportunities that Harley is not using to its
full advantage. Very strong growth in the motorcycle industry is occurring in Asia and
Mexico, yet Harley-Davidson has not fully taken advantage of this market.
24
Increasing
numbers of women ride motorcycles and yet only ten percent of Harley riders are
women.
25
These could be areas of potential growth for Harley.
Threats to Harley-Davidson include an aging U.S. population. While this factor is
considered an opportunity as well, it is a threat as the population ages and is eventually
unable to operate a motorcycle, thus extinguishing Harley’s largest market segment. The
contract with Lehman Trikes could counteract some of this effect. Though not a
significant threat because of Harley’s limited market share, the European motorcycle
24
“Motorcycles in Asia-Pacific,” DataMonitor, November 2006.
25
“Company Spotlight: Harley-Davidson Motor Company,” DataMonitor, October 2006. 9
industry is suffering from declining growth. Harley-Davidson competitors are more
diversified into markets other than motorcycles, which makes them less vulnerable to
fluctuations in the motorcycle industry.
26
Also, relations with union workers are a threat
to the industry.
16. 27
The readily available substitute products to motorcycles are the biggest
threat to the industry and to Harley-Davidson.
Competitive Profile Matrix
Table 2
Competitive Profile Matrix
Harley-Davidson Honda Yamaha
Critical Success Factors Weight Rating Weighted
Score
Rating Weighted
Score
Rating Weighted
Score
Market share .15 3 .45 3 .45 3 .45
Financial position .05 4 .20 3 .15 3 .15
Price competitiveness .10 1 .10 3 .30 3 .30
Customer loyalty .20 4 .80 2 .40 2 .40
Global expansion .20 2 .40 4 .80 4 .80
Product quality .10 3 .30 4 .40 3 .30
Product selection .15 2 .30 4 .60 4 .60
Management .05 4 .20 4 .20 4 .20
Total 1.0 2.75 3.30 3.20
Customer loyalty is Harley-Davidson’s strongest competitive advantage. In
product quality and financial position, Harley is also strong. However, Harley is not as
strong as its competitors in some critical areas. Harley falls far behind Honda and
17. Yamaha in global market share of motorcycle products. In addition, Harley motorcycles
are not as competitively priced as other brands. Product selection is another area of
26
“Company Spotlight: Harley-Davidson Motor Company,” DataMonitor, October 2006.
27
Jim Burgess (Black Hills Harley-Davidson), speech given at Black Hills State University, March 27,
2007. 10
weakness at Harley. While offering many products in the 1000cc+ category of
motorcycles, Harley lacks an array of smaller bikes. Also, Harley is not diversified into
other recreational lines such as watercraft and ATVs as many of its competitors are and is
thus more susceptible to fluctuations in the motorcycle market.
28
INTERNAL ASSESSMENT
Key Internal Forces
To determine Harley-Davidson’s strengths and weaknesses, an internal
assessment is required. Areas to be evaluated include: management, marketing, finance,
production and operations, research and development, and management information
systems (MIS).
Harley-Davidson offers a broad selection of 32 product models, has 650 dealers in
the U.S., and has the largest market share in the U.S. However, Harley only has 7.7% of
European market share (the second largest motorcycle market in the world), and 25.3%
of the Asia/Pacific region.
29
Clearly, Harley-Davidson’s strengths are in the U.S. market,
18. as 80% of Harley’s net revenue comes from U.S. sales.
30
Harley worked to improve its image over the years. In the 1960s, Harley was
viewed as sub-par when compared to British motorcycles. In the modern market, Harley
has a reputation for style and quality. Credit for this is due to the research and
development department, who implemented the trend towards quality for the company.
HD spend fund on R&D to become more competitive in introducing innovative products to the
market faster. The market share of the company increased to 97% after implementing the
successful approaches. The organisational structure changed as teams were introduced in
completing a product. The teams were effective for the organisation to improve. Further,
organisation focused on treating its employees at the very best through pay for performance
schemes. The employees were given necessary training if they require and the employees were
highly motivated in the organisation. Further the line workers were exposed to the company
sales and profitability. Moreover the employees were given the understanding on the how cash
flow and production affect the financial success. There were many changes implemented on
the employee’s job descriptions, responsibilities, and on the production processes.
Also, HD was much more effective as it valued the stakeholders of the organisation which made
huge difference between the Japanese competitors. HD provided many different serviced to
the social groups as HOG was formed. Accordingly, the organisation kept on becoming
innovative as the organisation introduced a new product name as V- Rod. HD focused on the
young and the women segments in attracting them to HD products through effective marketing
campaigns.
28
“Company Spotlight: Harley-Davidson Motor Company,” DataMonitor, October 2006.
29
Ibid.
30
Harley-Davidson Investor Relations, <http://investor.harley-davidson.com>, accessed on March 13,
19. 2007. 11
Harley-Davidson also introduced water-cooled engines, fuel injection, and catalytic
converters to improve exhaust emissions.
31
Brand image is critical in the motorcycle industry, and Harley’s strength in this
area is largely due to its marketing abilities in the U.S. market. Harley customers are
extremely loyal to their brand and 90% of Harley owners intend to purchase another
Harley. The production and operations department at Harley-Davidson has consistently
built reliable motorcycles for Harley customers. This consistency has helped sustain
brand image.
32
Harley’s internal management and finance department is strong. Harley is a
financially sound company, largely due to effective management.
33
Management information systems could be used to more effectively manage
inventory at Harley. Instead of allotting a certain number of products to each dealer,
Harley could use an enterprise-wide system to match inventory levels to demand. This is
currently one of Harley-Davidson’s few internal weaknesses.
34
31
Jim Burgess (Black Hills Harley-Davidson), speech given at Black Hills State University, March 27,
2007.
32
“Company Spotlight: Harley-Davidson Motor Company,” DataMonitor, October 2006.
20. 33
Jim Burgess (Black Hills Harley-Davidson), speech given at Black Hills State University, March 27,
2007.
34
Ibid. 12
Financial Ratio Analysis
Table 3
Financial Ratio Analysis
Ratio HarleyDavidson
2006
HarleyDavidson
2005
HarleyDavidson
2004
Honda
2006
Industry
Average
Liquidity Ratios
Current Ratio 2.23 3.6 2.79 1.07 2.04
Quick Ratio 1.56 2.18 1.37 .81 1.45
Leverage Ratios
Debt to Equity Ratio .62 .39 .40 .87 .45
Long Term Debt to Equity Ratio .32 .32 .25 .39 .32
Times Interest Earned Ratio N/A N/A N/A 2.37 7.15
22. 3.5
4
2004 2005 2006
Current Ratio
Quick Ratio
Liquidity ratios measure a firm’s ability to turn short-term assets into cash.
35
Harley-Davidson is doing better than the industry average in this category and
significantly better than its main competitor, Honda.
Leverage Ratios
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2004 2005 2006
Debt to Equity Ratio
Long Term Debt to
Equity Ratio
35
23. Fred R. David, Strategic Management: Concepts and Cases, 11
th
ed., Pearson Prentice Hall, New Jersey,
2007. 14
Leverage ratios measure how much a firm is financed by debt.
36
HarleyDavidson is fairly close to the industry average on this measure, and is doing better than
Honda.
Activity Ratios
0
5
10
15
20
25
30
2004 2005 2006
Inventory Turnover
Fixed Assets
Turnover
Total Assets Turnover
Accounts Receivable
Turnover
Activity ratios measure how well a firm uses its resources.
37
24. Harley is doing
especially well in inventory turnover, but falls below average in accounts receivable.
36
Fred R. David, Strategic Management: Concepts and Cases, 11
th
ed., Pearson Prentice Hall, New Jersey,
2007.
37
Ibid. 15
Profitability Ratios
0
5
10
15
20
25
30
35
40
2004 2005 2006
Return on Total
Assets
Return on
Stockholders’ Equity
25. Profitability ratios measure the effectiveness of management.
38
Again, Harley is
doing much better than the industry and Honda in almost all of these measures with the
exception of the price earnings ratio and the gross profit margin, which fall a bit below
industry standards, although still ahead of Honda.
Growth ratios measure growth over a period of time.
39
Harley is doing better than
the industry average in sales and earnings per share growth, but Honda is doing even
better. In dividends per share growth, Harley beats Honda, but both fall below industry
average. Clearly Harley-Davidson has financial strengths, but there are some areas to be
targeted for improvement.
38
Fred R. David, Strategic Management: Concepts and Cases, 11
th
ed., Pearson Prentice Hall, New Jersey,
2007.
39
Ibid. 16
Internal Factor Evaluation Matrix
Table 4
IFE Matrix
Strengths Weight Rating Weighted Score
26. 1. Customer retention .20 4 .80
2. Number of domestic dealers .15 4 .60
3. Domestic market share .15 4 .60
4. Product selection of +1000 cc motorcycles .10 4 .40
5. Financial position .10 4 .40
Weaknesses
6. International market share .10 1 .10
7. Number of international dealers .03 2 .06
8. Product selection in other segments .10 1 .10
9. Dealer inventory system .05 2 .10
10. Product cost .02 1 .02
Total 1.0 3.18
Harley-Davidson has a large number of repeat buyers. Harley has a large volume
of dealers in the U.S. and a large share of the U.S. market of motorcycle sales. The
company also offers several different products to suit different needs in the over 1000cc
category. However, Harley is much weaker in both Europe and Asia in number of
dealers and market share. One of the likely reasons for this is Harley’s limited offering
of smaller bikes that are more popular in international markets. Also, Harley’s brand
image in the U.S. is much more powerful to consumers than it is internationally. 17
SWOT MATRIX
Table 5
SWOT Matrix
Strengths – S
1. Customer retention
2. Financial position
27. 3. Product selection
4. U.S. market share
5. U.S. dealer network
Weaknesses – W
1. Dealer inventory system
2. International market
share
3. Expensive product
4. Product selection
5. International dealers
Opportunities – O
1. Increasing # of women riders
2. U.S. industry growth
3. Aging population
4. Mexico industry growth
5. Asian industry growth
SO Strategies
1. Continue to expand
U.S. market share (S4,
O2)
2. Expand marketing to
female riders (S1, O1)
3. Expand marketing to
baby boomers (S1, O3)
WO Strategies
28. 1. Balance inventory levels
to meet demand (W1, O2)
2. Pursue foreign markets
more aggressively (W2,
O4, O5)
3. Expand product line to
cater to female and aging
riders (W4, O1, O3)
Threats – T
1. Union relations
2. Aging U.S. population
3. Competitor diversification
4. Declining European growth
5. Availability of substitutes
ST Strategies
1. Focus on securing
new markets as baby
boomers age (S4, T2)
2. Focus market growth
in the U.S. rather than
European markets (S4,
T4)
WT Strategies
1. Expand product line to
compete directly with
29. competitors (W4, T3)
2. Open foreign factory to
gain international market
share and lessen reliance on
unions (W2, T1) 18
SPACE MATRIX
Table 6
SPACE Matrix
Ratings
Financial Strength (FS)
Leverage +6
Liquidity +4
Return on investment +3
Working capital +4
Industry Strength (IS)
Growth potential +5
Profit potential +4
Capacity utilization +4
Ease of entry +5
Environmental Stability (ES)
Competitive pressures -4
Risk -2
Price range of competing products -5
Demand fluctuations -2
Competitive Advantage (CA)
30. Market share -2
Loyalty -1
Product life cycle -1
Product quality -1
Conclusion
ES Average (-13/4) -3.25
CA Average (-5/4) -1.25
IS Average (18/4) +4.50
FS Average (17/4) +4.25
x-axis (CA + IS) +3.25
y-axis (ES + FS) +1.00 19
Conservative FS Aggressive
+6
+5
+4
+3
+2
+1 X
CA -6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 IS
-1
-2
-3
-4
-5
31. -6
Defensive ES Competitive
Harley-Davidson falls into the aggressive quadrant of the SPACE Matrix.
Aggressive strategies include market penetration and development, product development,
backward, forward, and horizontal integration, related and unrelated diversification, and
combination strategies.
40
40
Fred R. David, Strategic Management: Concepts and Cases, 11
th
ed., Pearson Prentice Hall, New Jersey,
2007. 20
GRAND STRATEGY MATRIX
Table 7
Grand Strategy Matrix
Rapid Market Growth
Quadrant II Quadrant I
X
Weak Strong
Competitive Competitive
Position Position
Quadrant III Quadrant IV
32. Slow Market Growth
Harley-Davidson is in Quadrant I of the Grand Strategy Matrix because of its
strong competitive position in the motorcycle market as well as the market’s strong
growth. The motorcycle industry is growing world-wide, and in some markets, growth is
quite strong. Harley has a very strong competitive position in North American markets,
and has a presence in international markets. According to this matrix, Harley would be 21
wise to pursue market development strategies, market penetration, product development,
forward, backward, and horizontal integration, as well as related diversification.
41
LONG-TERM OBJECTIVES AND STRATEGIES
Long-term objectives will attempt to sustain Harley-Davidson’s competitive
advantage and keep it a viable competitor in the motorcycle industry.
42
For the next three
years, Harley should use its current strengths to expand its U.S. market share through
market penetration, expand sales to female riders through market development, revise the
U.S. dealer network to allow for transfer of units between dealers to improve market
penetration and expand its product line to cater to aging riders through product
development.
Market penetration seeks to increase market share for present products in present
markets through greater marketing efforts. Market development introduces present
products into new markets. Product development increases sales by developing or
improving products.
43
ANNUAL OBJECTIVES
33. To ensure Harley-Davidson’s long-term objectives are achieved, annual
objectives are matched to long-term objectives.
44
To expand U.S. market share through
market penetration, Harley will set an annual objective to grow U.S. sales by 15% by
May 31, 2008. Also, $5,000,000 will be allocated to marketing efforts to ensure
attainment of this goal. Although this is an annual objective, it is anticipated this
41
Fred R. David, Strategic Management: Concepts and Cases, 11
th
ed., Pearson Prentice Hall, New Jersey,
2007.
42
Ibid.
43
Ibid.
44
Ibid. 22
objective could be modified slightly for each of the next three years as needed to achieve
U.S. market penetration.
To expand sales to female riders through market and product development, Harley
will set an annual objective to double the number of female Harley buyers in the U.S. to
20% of total buyers by May 31, 2008. Also, Harley’s marketing budget for targeting
female riders will be increased by $5,000,000. Again, this is an annual objective, but it is
34. anticipated this objective could be modified slightly for each of the next three years as
needed to strengthen Harley’s number of female buyers.
Harley will aim to improve its U.S. dealer network to allow for transfer of units
between dealers to improve market penetration. The date for this objective to be
complete is by December 31, 2007. Enhancements will be made to the current inventory
management system as needed until this goal is reached. Input will be largely based on
dealer and management input.
To expand its product line to cater to aging riders through product development,
Harley will set an annual objective of introducing one new product for aging riders by
May 31, 2008. This product may be built through the contract with Lehman Trikes.
PRO-FORMA FINANCIAL STATEMENTS
In order to implement objectives, Harley-Davidson will need to determine the cost
of implementation for each objective. Expanding its U.S. market share will increase
gross profit by approximately $400,000 annually. Repairing the U.S. dealer network will
result in $50,000 less inventory on hand each year. Expanding the product line to cater to
aging riders will contribute to increased operating expenses of about $90,000 but will
also contribute to the increase in gross profit. 23
Table 8
Pro Forma Balance Sheet
2006 12/31/2007 12/31/2008 12/31/2009 (Values in Thousands) 12/31/
Assets
Current Assets
Cash and Equivalents 238,397 250,000 250,000 250,000
Short Term Investments 658,133 660,000 660,000 660,000
Net Receivables 143,049 145,000 145,000 145,000
35. Finance Receivables held for sale 547,106 550,000 550,000 550,000
Finance Receivables held for investment 1,554,260 1,500,000 1,500,000 1,500,000
Inventory 287,798 250,000 200,000 150,000
Other Current Assets 121,890 120,000 120,000 120,000
Total Current Assets 3,550,633 3,475,000 3,425,000 3,375,000
Long Term Investments
Finance Receivables held for investment 725,957 750,000 750,000 750,000
Other Long-Term Assets 1,255,560 1,250,000 1,250,000 1,250,000
Total Non-Current Assets 1,981,517 2,000,000 2,000,000 2,000,000
Total Assets 5,532,150 5,475,000 5,425,000 5,375,000
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts Payable 763,186 760,000 760,000 760,000
Current Portion of Finance Debt 832,491 1,000,000 1,100,000 1,200,000
Total Current Liabilities 1,595,677 1,760,000 1,860,000 1,960,000
Non-Current Liabilities 24
Finance Debt 870,000 870,000 870,000 870,000
Postretirement Health Care Benefits 201,126 200,000 200,000 200,000
Other Long-Term Liabilities 108,610 100,000 100,000 100,000
Total Non-Current Liabilities 1,179,736 1,170,000 1,170,000 1,170,000
Total Liabilities 2,775,413 2,930,000 3,030,000 3,130,000
Total Shareholders’ Equity 2,756,737 2,545,000 2,395,000 2,245,000
Total Liabilities & Shareholders’ Equity 5,532,150 5,475,000 5,425,000 5,375,000
short-term funds to increase es will increase by borrowing e new inventory adjustment system is
implemented. Liabiliti Notes: Inventory on hand will decrease by $50,000 per year when th
sales and marketing efforts in the U.S. at $100,000 per year.
36. on.com>, accessed on March 13, 2007. <http://investor.harley-davids Source:Table 9
Pro Forma Income Statement
2006 12/31/2007 12/31/2008 12/31/2009 (Values in Thousands) 12/31/
Total Revenue 5,800,686 6,670,000 7,670,000 8,821,000
Cost of Revenue, Total 3,567,839 4,102,000 4,717,000 5,424,000
Gross Profit 2,232,847 2,568,000 2,953,000 3,397,000
HDMC Operating Expenses 818,490 900,000 990,000 1,090,000
Corporate Operating Expenses 22,561 23,000 24,000 25,000
Total Operating Expenses 841,051 923,000 1,014,000 1,115,000
HDMC Operating Income 1,414,357 1,668,000 1,963,000 2,307,000
HDFS Operating Income 210,724 217,000 223,000 230,000
Operating Income 1,602,520 1,885,000 2,186,000 2,537,000
Total Other Income/Expenses Net 21,720 22,000 22,000 22,000
Earnings Before Interest and Taxes 1,624,240 1,907,000 2,208,000 2,559,000
Income Tax Expense 581,087 680,000 788,000 913,000
Net Income from Continuing Operations 1,043,153 1,227,000 1,420,000 1,646,000
Net Income 1,043,153 1,227,000 1,420,000 1,646,000
of revenue. Operating expenses will increase 10% to cover new R&D e of 15%. COGS will stay fixed at
61.5% crease by 15% because of sales volume increas Notes: Anticipated total revenue will in
tax rate will stay fixed at 35.7%. per year to cover inflation. Income to cover inflation. HDFS will
increase 3% expenses. Corporate expenses will increase 3%
on.com>, accessed on March 13, 2007. <http://investor.harley-davids Source:Table 10
Balanced Scorecard
Objectives Measure or
Target
Time
37. Expectation
Primary
Responsibility
Customers
Increase number of female buyers 20% of total
Harley sales
May 2008 Sales/Marketing
Increase U.S. market share 15% sales
increase
May 2008 Sales/Marketing
Pursue foreign markets 10% sales
increase
July 2009 Sales/Marketing
Managers/Employees
Improve management/union relations Complete
negotiations
before contract
expiration
By end of
next
contract
expiration
Management
Conduct an employee benefits review
and add programs currently not offered
38. but desired by employees
Review current
benefits offerings
with employees
May 2008 Human
Resources
Form a team to evaluate foreign factory
locations
Formation of
team
December
2007
Management
Operations/Processes
Negotiate supplier contracts to gain
favorable terms and exclusivity where
possible (if not already in place)
Set up contracts
with current
suppliers and
renegotiate
existing contracts
July 2010 Procurement
Conduct an operations process analysis
to look for efficiency improvements
39. Document each
functional
process
July 2009 Operations
Supervisors
Improve U.S. dealer network by
implementing a computerized inventory
system
Allow for
transfer of
product between
dealers
December
2007
Management/MIS
Community/Social Responsibility
Offer volunteering opportunities for
employees
Implement
volunteering
program
December
2007
Human
Resources
40. Donate percentage of profits to
community charities
Determine
charities in cities
of operations
December
2007
Management
Implement corporate recycling of all
materials
Institute bins for
products not
currently being
recycled
December
2007
Human
Resources 27
Business Ethics/Natural Environment
Meet or beat all emissions standards Comply with all
current and future
emissions
standards
May 2008 Research and
Development
41. Comply with noise regulations Comply with all
noise ordinances
July 2009 Research and
Development
Conduct annual audits in accordance
with the Sarbanes-Oxley Act of 2002
Conduct yearly
audit
December
2007
Finance
Financial
Increase U.S. sales 15% sales
increase
May 2008 Sales/Marketing
Increase sales to female riders 20% of total
Harley sales
May 2008 Sales/Marketing
Increase international sales 10% sales
increase
July 2009 Sales/Marketing
The Balanced Scorecard allows for a balance of priorities between short and long term
goals, as well as among stakeholders and management.
45
A copy of the scorecard is distributed
42. to every department to ensure accountability for each department’s goals. Progress meetings will
be conducted every quarter with all accountable parties in attendance. Executive management
will be responsible for ensuring that all goals are implemented in a timely manner.
45
Fred R. David, Strategic Management: Concepts and Cases, 11
th
ed., Pearson Prentice Hall, New Jersey, 2007. 28
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Bureau of Labor Statistics, <http://www.bls.gov>, accessed on April 17, 2007.
CNN Money, <http://money.cnn.com>, accessed on April 17, 2007.
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Fred R. David, Strategic Management: Concepts and Cases, 11
th
ed., Pearson Prentice Hall,
New Jersey, 2007.
Environmental Protection Agency, <http://www.epa.gov>, accessed on April 17, 2007.
Federal Reserve, <http://federalreserve.gov>, accessed on April 17, 2007.
Harley-Davidson Investor Relations, <http://investor.harley-davidson.com>, accessed on March
13, 2007.
Jim Burgess (Black Hills Harley-Davidson), speech given at Black Hills State University, March
27, 2007.
“Motorcycles in Asia-Pacific,” DataMonitor, November 2006.
“Motorcycles in Europe,” DataMonitor, November 2006.
“Motorcycles in the United States,” DataMonitor, November 2006.
43. Motorcycle Industry Financials, <http://www.reuters.com>, accessed on March 13, 2007.
Sheila Seger (Lehman Trikes), personal interview, April 20, 2007.
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