HARLEY DAVIDSON

HARLEY DAVIDSON

Submitted by-Abhishek Pathak

Faraz KhanPratibha YadavRahul Pandey

Sandeep YadavShubham Sharma

•Type Public-1984, NYSE-1987

•Founded 1903

•Founder William S. Harley

Arthur Davidson

Walter Davidson

William A. Davidson

•Headquarters Milwaukee, Wisconsin, USA

•Key People Keith E Wandel (CEO)

•Revenue 5.59 Billion USD (2009)

•Employees 9,700 (2006)

•Subsidiary Buell, M.V. Augsta

•Website www.harley-davidson.com

1958The first rear brakes and hydraulic rear suspensions appear on the Duo-Glide.

 1981On February 26, thirteen Harley-Davidson senior executives sign a letter of intent to purchase Harley-Davidson Motor Company from AMF. By mid-June, the buyback is official, and the phrase "The Eagle Soars Alone" becomes a rallying cry.

1988The Harley-Davidson Traveling Museum hits the road, displaying memorabilia, classic Harley-Davidson motorcycles and the rich history of the Harley-Davidson rider

1991Installation of a $31 million state of the art paint facility begins at the York, PA, factory. It becomes fully operational in 1992.The Dyna line of motorcycles debuts with the 1991 FXDB Dyna Glide Sturgis®.

•In 2000,Buell introduces the Blast®, a single-cylinder motorcycle, for the 2000 model year. The Blast receives excellent reviews. It's introduced in tandem with the Rider's Edge® Academy of Motorcycling, a beginner's rider course available through Harley-Davidson and Buell dealerships.•The VRSCA V-Rod® is introduced for the 2002 model year. Inspired by the VR-1000 racing motorcycle, the V-Rod is Harley-Davidson's first motorcycle to combine fuel injection, overhead cams and liquid cooling, and delivers 115 horsepower. •In 2003, more than 250,000 people come to Milwaukee for the final stop of the Open Road Tour and the Harley-Davidson 100th Anniversary Celebration and Party.

•In 2004,Harley-Davidson,s touring and custom motorcycles were grouped into five families: Sportster, Dyna Glide, Softail, Touring, and the VRSC V-Rod.

•Harley-Davidson unveils plans for an all-new museum in Milwaukee, scheduled for opening in 2008.   Harley-Davidson appoints Beijing Feng Huo Lun (FHL) as the first authorized Harley-Davidson dealer on mainland China.

HARLEY-DAVIDSON’S PRODUCT LINE

•Harley-Davidson’s touring and custom motorbikes were grouped into five families:•CUSTOM BIKES:- SPORTSTERDYNA GLIDEVRSC V-Rod •TOURING BIKES:-SOFTAILTOURING

•Sportsters, Dyna glide and VRSC models were manufactured in the company’s Kansas city, Missouri plant. While Softail and Touring models were manufactured in York, PENNSYLVANIA.

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•These bikes come in different variations:-

•Sportsters and Dyna Glides- 4 model variations•Softails-6 variations•Touring bikes-7 basic configurations•VRSC V-Rod-2 basic styles.

•In 2004,Harley-Davidson ‘s retail prices of these bikes were-SPORTSTERS carried retail prices ranging from $6,495 to $8,675 DYNA GLIDE model sold at price points between $11,995 to $16,580VRSC V-Rods sold for $16,895 to $17,580The ROAD KING AND ELECTRA GLIDE Touring models sold at price $16,995 to $20,405.

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DIFFERENTIATION STRATEGY

A firm differentiates itself from its competitors “when it provides something unique that is valuable to buyers beyond simply offering a low price.”

•Differentiation is about understanding customers and how our product can meet their needs.

Because differentiation is about uniqueness, establishing differentiation advantage requires creativity – it cannot be achieved simply through applying standardized frameworks and techniques. Some examples are- McDonald’s, BMW, SONY, AMERICAN EXPRESS, HARLEY-DAVIDSON etc.

DIFFERENTIATION STRATEGY continue…..

•Harley-Davidson’s ability to develop its image of ruggedness, independence, and individuality is supported by a top management team that dons biking leathers and ride its “hogs” to owners’ group rallies, and a management system that empowers shop-floor workers and fosters quality, initiative, and responsibility.

•Davidson has been particularly effective at achieving differentiation advantage through careful examination of the activities that customers undertake in selecting, purchasing, using, and maintaining their motorcycles.

•Harley creates value for its customers through providing test ride facilities at its dealerships, financing, drivinginstruction, insurance, service and repair facilities, owners’ club activities, and various sponsored events for Harley riders.

The Drivers of Uniqueness

HOG (Harley Owners Group) membershipChapter ActivitiesAccessories Exclusive Events - Club HOG and State Rallies

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HARLEY’S STRATEGY AND IMAGEHarley-Davidson’s turnaround strategy

including improving product quality by adopting Japanese management practices, abandoning a reliance on advertising in favor of promotions at motorcycles rallies, and improving its dealers network to broaden its appeal to new customers.

After hearing complaints about dealers from Harley riders at rallies and other bike events, Harley -Davidson conducted a PILOT PROGRAM with two dealers in MILWAUKEE that called the dealers to build clean,

•HOG membership was that new motorcyclists could experience freedom of the open road, much like a Hells Angel. This riding club is different from joining a country club or other upper-income families' club.•Baby boomers purchased Harleys because of a desire to feel “forever young”•In fact, many Harleys competitor have claimed that Harley sells lifestyles, not motorcycles. •On Harley-Davidson’s 2003 Memorial Day centennial celebration in Milwaukee, thousand of leather –clad bikers attended, most of them are professional people…people want to create image.

•Most weekend bikers were quite different from the image they emulated. Hells angles continued to be linked to organized crime into 2003 like drug trafficking, murdering, theft of motorcycles and firearms. Harley-Davidson balanced its need to promote freedom and rebellion, while distancing the company from criminal behavior

PEST ANALYSIS

Political

Low taxation from U.S government could encourage Japanese & European competition within the US.

Economic

Global recession is effecting economies world wide therefore HD has to sustain its position in the market.

Social

More diverse lifestyles, Creating many Harley Clubs and academies around the globe like Rider’s Edge.

Technological

New materials and other technologies are giving potential for innovative / customized motorbikes.

04/08/2023 ® Tony Gauvin, UMFK, 2005 14

Continued… Legal

Different taxation method in different countries especially southeast Asia where HD is facing legal issues due to excessive excise duty.

International

Volatile international market situation is restricting HD to capture new markets.

Environmental

Noise and some emissions standards of HD bike is not up to the level of some countries across the globe.

Demographic

Average purchaser of HD is mid forties married man with household incomes averaging $78600 while only 9% of consumers are women.

Internal AnalysisValue Chain

Firm InfrastructureGood Senior Management Has Transformed The Firm But It Remains Small Compared To Global Competitors.HRMExcellent But No Skills or Abilities Outside US.ProcurementVery Good Relationship With Streamlined Supplier Base, and New Brazil Operations Can Reduce Cost Further.

Inbound Logistics

Operations Outbound Logistics

Marketing & Sales

Services

Good Advance JIT Procedure

Excellent Highest Level Operations

Very Good Because of Good Shipment

Excellent Relations & Brand Strength

Excellent In US But Weak Outside

Porter’s 5

Forces

New Entrant

• High Entry Barrier

·High tech Involvement

·Small scale Producers minimum threat

New Entrant

• High Entry Barrier

·High tech Involvement

·Small scale Producers minimum threat

Power of Buyer

•Low power of customer as they are individual

·Less no. of Dealers also rely on individual customers

Power of Buyer

•Low power of customer as they are individual

·Less no. of Dealers also rely on individual customers

Internal Rivalry

•Honda, Yamaha, Suzuki ( All Japanese)

·Honda mainly competing in U.S

·Strategic Alliance between Suzuki and Kawasaki

Internal Rivalry

•Honda, Yamaha, Suzuki ( All Japanese)

·Honda mainly competing in U.S

·Strategic Alliance between Suzuki and Kawasaki

POWER OF SUPPLIER

•Out source Steel, Basic Electronics

·Assembly within the Company

·Ease of switching suppliers

POWER OF SUPPLIER

•Out source Steel, Basic Electronics

·Assembly within the Company

·Ease of switching suppliers

Substitute Product

•Very few substitute as luxury bike.

·Cars, scooter and sports car.

·NO subs when looking for luxury bike.

Substitute Product

•Very few substitute as luxury bike.

·Cars, scooter and sports car.

·NO subs when looking for luxury bike.

Harley-Davidson University

•Set up in Milwaukee•To train Dealers and Mechanics•17,000 were trained in 2002•It has 665Iinstructor led and 115 online classes•96 percent company dealer participate

Distribution and Sales Program

•In 2003, 644 independently owned dealer

•857 dealers in 2009 in U.S. •436 Buell dealers in U.S. in 2003•76 Independent dealers and 1 Buell dealer in Canada in 2003•In Japan 161 Independent dealers in 2003

Distribution and sales continue….•50 dealers and 3 distributer in Australia and New Zealand in 2003•73 dealers in Asia/Pacific sell Harley and Buell in 2003•32 dealers in 17 Latin American Country in 2003• 436 and 313 are Harley and Buell dealers in Europe in 2003

PROBLEMS OF HARLEY-DAVIDSON ARE:-

•Harley has faced difficulties in luring buyers in the performance segment of the industry.•Heavy Price•Not liked by Echo Boomer•Challenges faces by Buell•In the early 1980s, Japanese competitors' heavyweight motorcycles created a real threat for the Harley-Davidson organization.

•Harley-Davidson had co-developed, reanalysis the customer needs and later purchased Buell to compete with performance category against models offered by HONDA,YAMAHA,KAWASAKI,SUZUKI and lesser known European brands such as MOTO GUZZI,DUCCATI and Triumph.

Problem Continues…… •Long term Production Process•Over availability of models•Fuel Venting problem in Dyna series•Problem with V-twins•Poor Quality Control

THE END