harley davidson

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HISTORY

In 10, 1-year-old William S. Harley and 0-year old Arthur Davidson made available to the public the first production of the Harley-Davidson motorcycle. The company started in a 10x15 foot shed in the Davidson family’s backyard in Milwaukee, Wisconsin. The same year the first three Harley-Davidson motorcycles were built and sold.

In 106 Harley-Davidson Motor Company was incorporated and the stock split four ways between the four founders and the staff size increased to fifteen. The target market was the New England region and dealerships were established.

AMF, Inc. acquired Harley-Davidson in 16 and production was expanded from 15,000 in 16 to 40,000 in 174. AMF liked the idea of short-term profits instead of investing in research and development and retooling. During this time the Japanese competitors were improving the quality of their motorcycles. Harley was not doing the improvement to its own bikes and began to turn out inferior equipment. AMF chose to ignore the competition and when in 175 Honda introduced its Gold Wing they became the leader of the touring bike industry, something that Harley controlled for years.




Sales continued to be high during the ownership of AMF but profits were weak, and the company had severe problems with poor-quality manufacturing and strong Japanese competition.

In 181, Vaughn Beals and 1 other managers bought out the company, and then proceeded to install a, Materials as Needed (MAN) system, to reduce inventory and to stabilize the production schedule. This also forced production to work with marketing to create more accurate forecasts, resulting in only a 10% variance.

185 Harley-Davidson went public again, James L. Ziemer, the CFO stated, “You throw cash at it, try to grow to fast, you’d destroy this thing.”

During 1, the company acquired 4% interest in Buell Motorcycle Company, a manufacturer of sport/performance motorcycles. And then in 15 the company purchased all of the common stock and common stock equivalents of Eaglemark Financial Services Inc. Eaglemark provided credit to leisure product manufacturers, their dealers, and customers in the United States and Canada. Then in 16 the company announced that it would discontinue the operations of the Transportation Vehicles segment so that it could concentrate on its core motorcycle business. The end of the 10’s found Harley looking at the younger market for their product and how they were going to attract this buying market.

CORPORATE GOVERNANCE

The board of directors consists of eight members two are internal members. The board brings experience to the company in several areas such as; marketing and organization, legal and strategic counsel, creativity and vision, how to retain strong and long-lasting dealer relationships, how to work with the entertainment industry and younger customer segments, international experience, and the ability to establish beneficial relationships with all stakeholders.

MISSION

“We will fulfill dreams through the experience of motorcycling by providing to motorcyclists and to the general public an expanding line of motorcycles, branded products and services in selected segments.”

VISION

Harley-Davidson, Inc. is an action-oriented, international company-a leader in its commitment to continuously improve the quality relationships with stakeholders. Harley-Davidson believes the key to success is to balance stakeholders’ interests through the empowerment of all employees to focus on value-added activities.

STRATEGY

Harley-Davidson plans to grow both organizations with new members and chapters in the years to come both domestically and internationally.

The need to get the attention of the younger customers by marketing is foremost in the strategic plans at Harley.

Internationally, Harley has plans to continue to focus on expansion and improvement of distributor and dealer relationships, specializing in training programs, retail financing initiatives, ongoing product development, and coordinated marketing programs to attract new customers.

Harley-Davidson will endeavor to create an awareness of the “Harley-Davidson” brand among the non-riding public and provide a wide range of products for enthusiasts by licensing the name “Harley-Davidson” and numerous related trademarks. The licensing will provide a valuable source of advertising and goodwill, not to mention another source of revenue.

An ongoing manufacturing strategy has been designed to increase capacity, improve product quality, reduce costs and increase flexibility to respond to changes in the marketplace. Some of the manufacturing techniques that are and will be put in place include just-in-time inventory, employee involvement, partnering agreements with the local unions, high performance work organizations, and statistical process control.

A part of its strategic plan for sustainable growth, Harley-Davidson announced plans to move assembly of its Dyna Glide motorcycles to Kansas City, Missouri. This will narrow the gap between supply and demand.

Performance

Harley-Davidson has delivered 16 consecutive years of record revenues and earnings. In 001, the company had a one-year total return on its stock of 6.%. In January of 00, Forbes magazine named Harley-Davidson its “Company of the Year” for 001 and in February, Fortune magazine selected them as one of the nation’s “Most Admired Companies.” In 001 consolidated revenue was $.6 billion, a 15.7% increase over 000, while net income was $47.7 million, a 5.% increase over the previous year. In 001 Harley-Davidson produced a total of 4,461 units a 14.6% increase over the previous year. Harley-Davidson motorcycle revenue grew 17.1% in 001 to $.6 billion.

Harley-Davidson has raised more than $8 million for the Muscular Dystrophy Association since 180. The Harley-Davidson Foundation made $4. million in grants.

S.W.O.T

Strengths

1. A strong camaraderie and cultural following among its customers.

. Very successful supplier relationships.

. One of the best brand and trademark recognition in the industry.

4. Has a strong foothold in the international marketplace.

5. A product line that includes a wide selection of motorcycles but also includes selling lots of related products.

Weakness

1. The demands have exceeded Harley-Davidson’s production capabilities in the past.

. Limited financial and marketing resources.

. Less diversified company than the competition.

4. Predominantly male dominated clientele while competitors have as high as 5% female customers.

Opportunities

1. Sport of motorcycling.

. Government contracts for armed services

. International sales

Threats

1. History of strong Japanese competition

. A large percentage of population is non-riders.

. A slowing economy.

RECOMMENDED STRATEGY

It is recommended that Harley-Davidson focus on their strengths and opportunities and take a

”Marketing Strategy Approach” which would include the following

· Approaching the movie industry to develop more motion pictures or TV shows using the Harley motorcycle.

· Have incentives for current Harley customers to bring in new customers.

· Increase the offering of Harley-Davidson products. Partner with clothing manufactures, toy manufactures…etc.

· Expand their international markets.

Harley Davidson needs to continue marketing the Harley-Davidson lifestyle and keeping the Harley-Davidson image alive. Even if the consumer can’t afford a Harley-Davidson motorcycle they can buy the Harley-Davidson brand on everything from clothing to toilet paper.



HARLEY-DAVIDSON, INC. 00

THE 100TH ANNIVERSARY

Management 5650

Strategic Management and Business Policy

Cynthia Kubalek





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