STRENGTHS

 Net income of 2003 was $760mn, its more than 30% as

compared to the previous year 2002.
 The standard and performance segments of Harley Davidson
make up 70% of the European heavy weight motorcycle market
 Harley-Davidson operates in two segments: Harley-Davidson
motorcycles & related products and HDFS (Harley-Davidson
Financial Services).
 Harley-Davidson is the only major American heavyweight
motorcycle manufacturer.
 Strong brand name.
 The HOG (Harley Owners Group), which have a 7,50,000
members world wide is the industry’s largest company sponsored
motorcycle enthusiast organization.
 Buell Riders Adventure Group (BRAG) was also formed recent
 Customization of the bikes, this is Harley-Davidson’s major
revenue maker.
 Harley-Davidson have a good marketing division and its divided
as dealer promotions, customer events, magazine and direct-mail
advertising, and public relations.
WEAKNESS
 High price
 Harley-Davidson has problems in gaining more market share in
some European countries (That’s one of the main markets for
Heavyweight motorcycles outside U.S).
 They didn’t yet start its sales in India, one of the biggest markets.
 Required production is not met, analyzing the future of
Heavyweight motorcycle market
IFE MATRIX

http://www.scribd.com/doc/12517953/HarleyDavidson-Strategic-Analysis

Current Performance
http://www.harley-
davidson.com/en_US/Media/downloads/Annual_Reports/2007/HD_Annual2007.pdf?
locale=en_US&bmLocale=en_US
KEY EXTERNAL FACTORS
WEIGHT RATING
WEIGHTED
SCORE
STRENGTHS

Net income of 2003 was $760mn, its more

than 30% as compared to the previous

year 2002
0.15
3
0.45

The standard and performance segments

of Harley Davidson make up 70% of the

European heavy weight motorcycle market

0.09
3
0.27

Harley-Davidson operates in two segments:

Harley-Davidson motorcycles & related

products and HDFS (Harley-Davidson

Financial Services)
0.025
4
0.1

Harley-Davidson is the only major

American heavyweight motorcycle

manufacturer
0.1
4
0.4
Strong brand name
0.15
4
0.6

The HOG (Harley Owners Group), which

have a 7,50,000 members world wide is

the industry’s largest company sponsored

motorcycle enthusiast organization

0.05
2
0.1
Buell Riders Adventure Group (BRAG) was
also formed recent
0.025
2
0.05
Customization of the bikes, this is Harley-
Davidson’s major revenue maker
0.025
3
0.075

Harley-Davidson have a good marketing

division and its divided as dealer

promotions, customer events, magazine

and direct-mail advertising, and public

relations
0.025
2
0.05
WEAKNESS
High price
0.15
2
0.3
Harley-Davidson has problems in gaining

more market share in some European

countries (That’s one of the main markets

for Heavyweight motorcycles outside U.S).

0.06
3
0.18
They didn’t yet start its sales in India, one
of the biggest markets
0.1
3
0.3

Required production is not met, analyzing

the future of Heavyweight motorcycle

market
0.05
4
0.2
TOTAL
1
3.075
SWOT matrix
Opportunity
Threat
SO Strategy:
ST Strategy
 EXPAND PRODUCTION TO
EUROPE
 INCREASE STRONG BRAND
NAME
Strength
 EXPAND PRODUCTION TO
ASIA
 INCREASE MARKET TO
YOUNGER CUSTOMER
WO Strategy
WT Strategy
 IMPROVE EMPLOYEE
RELATIONSHIP
Weakness
The international heavyweight market is growing and is significantly larger than the U.S. heavyweight
market. As of 1997, Europe has the largest motorcycle industry (Fig 1), even larger than US. There is high
potential in expanding business in Europe. However, the company holds a smaller market shares in the
European market. Therefore, continuing to develop the European market should be a major issue for the
company over the next few years. The following recommendations could be used in the European market.

Not only should they target heavyweight motorcycles market, they can also target sport motorcycles market.
The reason is that the European sport/performance market is four times larger than U.S., and is expecting to
grow even more in the future. The company could distribute the Buell Motorcycle Company’s product to the
European market in order to establish a sporty image and able to directly complete with other competitors.

Also, the company can build a motorcycle plant in the European by using strategy alliance or joint venture.
Building the plant in the European can reduce the transportation cost and increase the company’s
international experience. Strategy alliances is suitable in this case since the company can create value from
transferring competencies or sharing resources between diversified businesses in order to realize
economies of scope.

They could improve their foreign marketing strategy. Over the years, Harley built up a strong heavyweight
image over the American buyers, but this image could be unfit to the Europe or Pacific market. When the
company first started up the business, the heavyweight idea was developed according to American’s taste.
They actually did successfully in the US market. However, when they expand to globalize the company, they
did not do as successful as they did in the US market. They should do more research on people’s
preference and tastes in the targeted countries. Space could also be one of the reasons. Cities in Europe
and Asia has very high density compare to US. For example Hong Kong is a tremendously high-density city.
High-rise buildings are everywhere. Streets and roads are usually one to two lanes. Thus, people in Hong
Kong would rather choose to buy a transportation vehicle than a motorcycle since pollution levels are very
high. Moreover, traffic density in Hong Kong is also very high, and traffic jams happen everyday. If people
want to buy a motorcycle, they would rather buy a small and light one, as it is more convenience to wander
around small and narrow streets.

Prices could be another reason why they fail in the oversea market. Harley’s motorcycles are priced slightly
higher than competitors. In the U.S. market, since the customers are brand, quality, and style loyalty.
Instead of focusing on the price leadership strategy, they should focus on differentiate strategy. Therefore,
under the current financial availability, they should be able to generate certain funds to run the Product
Development Center, which bring together employees and suppliers to design the fashion products. At the
same time, the company should focus on product development and product proliferation strategy. They
should concentrate on creating new products or improving existing products in order to attract existing and
new customers.

The company should continue to build their enterprise. Since the industry does not have significant
economies of scale, growth-via-acquisition strategy could be used. Harley-Davidson can merge or acquire
weaker rival or smaller players. Taking over the weaker and smaller players will increase the entry barriers.

Strengths Weaknesses

• Innovation • Over leveraged fiancial position

• Strong brand equity • Low market share
• Strong financial position • Not diversified
• Pricing • Ubiquitiouegory, products, services
Opportunities
Threats
• Financial markets (raise money
• Competition
through debt, etc)
• External changes (government, politics,
• Emerging markets and expansion
taxes, etc)
abroad
• Lower cost competitors or imports
• Innovation
• Product substitution
• Product and services expansion
Harley Problems

-Omission of changes
-They needed to do something to correct the weaknesses
-When a new product entered the market they didn’t do anything to protect their products.
-The image of motorcyclists was associated to the black leather jackets gangs and violence
-Their biggest problem was Honda appearance

Alternatives

-Continuos marketing research

-Be less self conceited
-Improve the services
-Be productive/ dynamic on the market

The Strategy Chosen

- Harley Davidson became more a luxury producer with high prices and quality and addressing to a small
range of customers.

Since the industry does not have significant economies of scale, growth-via-acquisition
strategy could be used. Harley-Davidson can merge or acquire weaker rival or smaller
players. Taking over the weaker and smaller players will increase the entry barriers

Harley Davidson Case

1. How can Harley manage the increasing threat of foreign competition?

Harley is a one of the 100 year old companies on the earth and already has a
unique brand name. Harley Davidson name remind much more thinks to
customers than its competitors. All they have to do is to protect this concept and
lower prices. Also Harley Davidson should develop some custom models for
European and Asian markets that for example having less noise or user
friendliness in traffic etc.

2. Can Harley continue to survive on image?

Harley Davidson means escape. In these days cosmopolite life customers that
have dense life also need to escape. Harley Davidson suggest its customers this
experience that "whatever happens, ride your Harley Davidson and escape from
this cruel world". Harley Davidson should pump this aspect with marketing,
shows, organizations etc.

3. What will it take to make Harley-Davidson successful in the future?

Harley Davidson has already the hard one that is a unique brand. Now Harley
Davidson has to use this brand and offer textiles, accessories even restaurants to
customers that want to escape but not with motorcycles. Customers have to taste
 this experience not only with riding motorcycles.

4. Evaluate the strategic plan Harley is currently pursuing, and develop or

recom¬mend a strategy for the future of the company.

Harley Davidson has to change its mission slowly, not remaining only major
American motorcycle manufacturer. Harley Davidson should be a company that
provides escape experience to customers however. It may offer a new life style.

Harley Davidson Industry Analysis

Case 2 Industry Analysis

Harley Davidson/ Heavy Weight Motorcycle Industry

Table of Contents

Mission ………………………………………………………………...3
SWOT Analysis ………………………………………………………..3-7
Sustainable Competitive Advantage …………………………………...7-8
Issues and Problems …………………………………………………....8-9
Strategic Recommendation …………………………………………….9-13
Fallout ………………………………………………………………… 13-15
Conclusion ……………………………………………………………..15
Appendix ……………………………………………………………….16
Refrences ……………………………………………………………….17-18

Executive Summary

In the following paper we discuss the Harley Davidson Corporation and identify two
strategic recommendations for their business. In order to get a better understanding of the
Harley Davidson Corporation we broke down the company by their strengths,
weaknesses, opportunities and threats. We then further analyze and explain Harley’s
sustainable competitive advantage, as well as issues and problems the company faces.
After going over Harley’s current company situation we use research and statistics to
recommend Harley Davidson concentrates more on its international stores and transforms
itself into a green corporation. We discuss the advantages and benefits Harley Davidson
would obtain based on our recommendations, and also possible problems our
recommendations may encounter.

Mission Statement
“We fulfill dreams through the experience of motorcycling,
by providing to motorcyclists and to the general public
an expanding line of motorcycles and branded products and services
in selected market segments.”
Harley Davidson is an American manufacturer of heavy weight motorcycles. The
corporation is based out of Milwaukee, Wisconsin and is the largest manufacturer of
heavy weight motorcycles in the world. In 2007 Harley Davidson held 49.4% of the
market share in the heavyweight motorcycle market with competitors like Honda, Suzuki,
and Yamaha trailing far behind. Based on more recent information Harleys sales have
slightly declined in the US due to the...

Harley-Davidson (Harley), a leading automotive company, produces heavyweight

motorcycles, motorcycle parts, accessories, apparel and general