Harley Davidson Case Analysis
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I. INTRODUCTION
Mission Statement:
“We 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 market segments.”
Vision Statement:
“Harley-Davidson is an action-oriented, international company, a leader in its commitment to continuously improve its mutually beneficial relationships with stakeholders (customers, suppliers, employees, shareholders, Government, and society). Harley Davidson believes the key to success is to balance stakeholders interests through the empowerment of all employees to focus on value-added activities.”
Core competencies and Market Focus
Harley Davidsons mission is a true testament of who they are. They have made a name for itself because of its unique yet perfect craftsmanship of motorcycles. Harley Davidson follows a corporate growth strategy as it is continually focused on expanding its products and markets all over the world. They use a cooperative strategy by working with Buell Motorcycle Company, as they were able to “enter select niche markets”. Lastly, they used a “Materials As Needed” (MAN) system to reduce inventories and stabilize its production schedule, which is part of their functional strategy. These strategies all contribute to Harley Davidsons mission.
Harley Davidson has done a great job adapting to change. They understand that their target market is drastically changing. Because of this they have been forced to enter foreign markets all over the world in order to attract new clientele. The market is changing from what used to be “rockers” to women, and younger individuals. This is one of Harley Davidsons objectives, “to recruit riders of a new generation”. In order to effectively reach these markets Harley Davidson canceled the operations of the transportation vehicle segment so it could focus on its core competency of motorcycles.
Where Harley-Davidson wants to be, down the road
The corporations goal is to increase production 7 to 9 percent regardless of the changes taking place in its customer base and the economy. Its brand name remains as one of the elite names in any industry and they feel this, in addition to various new product lines being offered will help to reach those goals. They opened their first dealer in China in 2007 and a museum in 2008 all to reach their goal of reaching new markets and increase their production globally, which in turn will lead to greater profits.
II. EXTERNAL ANALYSIS
PESTLE
Political
U.S Government and People are considering Harley-Davidson as an American icon.
Opportunities in emerging economies such as India and China but there is an uncertain operating situations.
Harley-Davidson, an All American brand is facing friction entering some markets as it either due to anti-American or product is not compatible to country culture
Economical
Disposable income is directly proportional to the purchasing of their items as it is seen as a luxury and leisure purchase.
The economic crisis will hit Harleys core middle America and middle class segments very much.
Currency fluctuation is also a big problem in this industry as it effects exports and earnings as well as cost of raw materials
Social
Harley Davidson is directly revered in overall American culture and dominates biking culture for its history and overall user culture/ ecosystem. Even if you do not use bikes an American is likely to have purchase or interact with their apparel
Average purchaser of a U.S Harley-Davidson motorcycle is a married male in his mid-forties and makes approximately $78,600 a year.
Over 2/3 of the sales of Harley-Davidson motorcycles are to buyers with at least one year of education beyond high school and 30% of buyers have college degrees.
1/10 of Harley-Davidson customers are women, which shows a potential growth area for the company
Technological
Continuous improvements are needed more and more technological as customers demanding more energy efficient and technologically advanced bikes.
Harley-Davidson is one of the main manufacturer and user of V-ENGINE configuration.
Harley-Davidsons have a wide variety of products according to Standard, Performance, Touring & custom.
Environmental
Harley Davidsons face pressures from the EPA, and other environmental groups in all stages of their product. With its manufacturing, distribution, maintenance, and its use primarily because of their higher then average emissions.
Harley Davidson faces pressures on the consumer side to be more fuel efficient due to rise in fuel prices as well as competition which have already made strides to optimize their bikes in regards to fuel consumption.
Other nations restrict bikes use due to not being applicable their city ordinances
Legal
A new assembly facility opens in Manaus, Brazil, the first operations outside of the U.S, reduces taxes, make them more affordable to a larger group of Brazilian customers.
Harley-Davidson is facing some legal problems in Asian countries in India there is 60% tariff and various other taxes will cause the price of the bike to double.
Noise pollution and some emission standards of Harley-Davidson bike is not up to the level of some countries across the globe.
Key Threat Factors
Competition: In the mid 1970s Japanese competitors invested in research and development and retooling, allowing them to build better quality motorcycles.