Harley Davidson Case Study
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Harley Davidson
Introduction
Harley-Davidson’s history began in 1903 when Arthur Davidson, his brothers Walter and William, and William Harvey produced three motorcycles in a shed built in the Davidson’s backyard. Their reputation in motorcycle racing grew in the early 1900’s and elevated even higher with the production of the “V-twin engine” a Harley-Davison trademark. The new engine allowed the company to thrive throughout World War I by producing 17,000 motorcycles for military use. The company produced its eagle emblem and developed signature models like the Hydra-Glide(1949), K-model(1952), Sportster(1957), and the Duo-Glide(1958) for the 1930’s to the 1950’s. Harley-Davidson was the last remaining motorcycle manufacturing company by 1953. The company’s reputation began to spiral downhill after it was taken over by the American Machine and Foundry(AMF) in 1969. Due to a gross decline in sales during the 1970’s, AMF decided to put the company up for sale. In 1981, thirteen members of the Harley-Davidson management team engineered a leveraged buyout of the company. The company would struggle shortly after due to decreased sales and a heavy debt load. Richard Teerlink (CEO) convinced lenders to accept a newly structured plan within hours away from bankruptcy. Teerlink’s new plan that included new marketing techniques and manufacturing strategies plus tariffs placed on Japanese motorcycles aided in Harley-Davidson’s long battle to regain market share.

Competitive strategy
Harley-Davidson began to rebuild its competitive advantage primarily by focusing on customer relations. Management teams began to reach out to the community in order to find how the company was perceived(c-369). Their findings derived from focus groups, interviews, and survey’s concluded that customers felt cheated by the company’s lack of quality customer service and product quality(c-369). Management countered with improving product quality through adopting Japanese practices, providing promotions at rallies, and appealing to customers by broadening the dealer network. Attending promotional rallies provided much needed feedback. The company began to appeal to customer wants by providing clean, attractive showcase stores to show improved display apparel and other merchandise. A defensive maneuver by management that led to remarkable success was to emphasize product quality and design. This meant that the company would build a reputation of prestige around owning a well designed motorcycle that would negate other competitors more family-friendly and lower costs approach towards marketing(whybike.com). Offensive tactics implemented by Harley-Davidson included marketing with icon like Jay Leno(whybike.com) and using the company’s place in pop culture(strategy-business.com). After instilling the idea of product quality management focused on its most notable achievement “The company focused on cultivating the ownership of Harley ownership (c-369).” Now Harley owners could experience free Harley Owners Groups(HOG) memberships that gave a sense of community through socialization and raising money for charities(369). Today, the strategies implemented by management are starting to decline. Investors are starting to shy away as baby boomers begin to age and the younger generation does not appeal to the retro style. Although some of the newer styles are appealing, the prices of the motorcycles are a little hefty for 20yr olds(c-374). After an anticipating an increase in earnings per share, Harley Davidson announced that the company will be decreasing bike shipments and lowering its prior earnings estimates from $4.12 a share to between $3.69 to $3.77 a share(growyourfunds.com).

Performance in international markets vs. the U.S.
The performance of Harley-Davidson in the U.S. is declining. Consumers have been hit hard with economic downfalls and are shying away from making large purchases. Consumers, recently, have been more concerned with decreasing home values, job security, gas prices that are soaring, and food prices on the rise(forbes.com). As a result, there has been a decline in the amount of motorcycles that are being shipped and the company operation expectations for 2008 are lower. However, Harley-Davidson has appeared to hold its position in international markets as the motorcycle is a more efficient means of transportation in foreign countries(whybike.com). Currently, the company’s stock is paying over a %3 dividend yield and on the rise, a P/E ratio of 10, ROE over 36, and ROIC over 20(hog.blogginstocks.com). The company has continued to thrive in a mature industry by its continuous growth and expansion in international markets and offering multiple selections of motorcycles and apparel.

Strategic alliances
Over the years, Harley-Davidson has formed strategic alliances with numerous companies. In 1999, the company partnered with ford to produce the “Harley Davidson Edition F150.” Harley-Davidson chairman and chief executive officer Jeff Bleustein stated “This

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Harley-Davison Trademark And Arthur Davidson. (July 6, 2021). Retrieved from https://www.freeessays.education/harley-davison-trademark-and-arthur-davidson-essay/