APPAREL QUALITY MANAGEMENT II

ASSIGNMENT 1

TOPIC: BENCHMARKING CASE STUDY ON HARLEY

DAVIDSON

SUBMITTED TO: MR. SUMIT KUMAR

ASST PROFESSOR
DFT, NIFT BHUBANESWAR

SUBMITTED BY: SAI RAJ PRADHAN

BFT/17/1768
6 TH SEM, BFT
 TABLE OF CONTENTS
S.No:- Topic Page No:-
1 Definition of Benchmarking 3
2 Process of Benchmarking 3-4
3 Types of Benchmarking 4-6
4 Benefits of Benchmarking 6
5 Case Study of Harley Davidson 7-8
6 References 9

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 BENCHMARKING
DEFINITION
Benchmarking is a process of measuring the performance of a company’s products, services,
or processes against those of another business considered to be the best in the industry, aka
“best in class.” The point of benchmarking is to identify internal opportunities for
improvement. By studying companies with superior performance, breaking down what makes
such superior performance possible, and then comparing those processes to how your business
operates, you can implement changes that will yield significant improvements.

BENCHMARKING PROCESS
 Planning
The first stage of benchmarking is the most important in the process. Planning includes
highlighting what you want to improve, who you will benchmark yourself against, and how
you envisage success. Only once this step has been completed will you be able to move onto
the next step as the results of planning will focus on the information you need to collect and
what success will look like.
 Collection of Information
After planning, benchmarking is about collecting information on your processes and how
competitors do them. If you are looking to improve your customer service satisfaction rating
you should understand the processes involved in the department, how calls and communication
are dealt with, and also how it differs from your competition. Maybe you can talk to someone
in another call center, or call the center directly to gain first-hand knowledge of their processes.
At this point, it is important to gather as much information as possible.
 Analysis of Data
Once you feel you have all the information you can gather, you can start to plot it and begin to
understand the shortcomings you may have. It is important to remember at this point in the
process that no business is perfect and you must have an open mind to be able to analyse
information objectively. Once findings start to be uncovered you can draft a report and start
discussing the next steps to achieve better performance in this area.
 Action
Presenting findings to a department is never an easy thing, especially when you are proposing
changes. Gathering and analysing information is only worthwhile when you can implement
changes and better the company in the process. Gaining buy-in from a department can involve
concessions so make sure the MVP you present is accepted and will likely equate to the success
highlighted in the planning stage.
 Monitoring

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No plan is ever complete without monitoring results to determine how successful the
plan has been. The implementation phase will have highlighted metrics and goals for
success within a time frame so monitoring these is the only way of knowing the efficacy of the
changes. Monitoring can be over a short or long period of time depending on the desired
outcomes.

TYPES OF BENCHMARKING
There are four primary types of benchmarking:
 Internal
 Competitive
 Functional
 Generic.
INTERNAL BENCHMARKING
Internal benchmarking is a comparison of a business process to a similar process inside the
organization to acquire the best internal.
Internal benchmarking is the comparison of practices among similar operations within a firm.
One distinct benefit of internal benchmarking is that it forces documentation and allows easy
comparison of the work process to uncover the best practices.
Benefits
 most cost efficient
 relatively easy
 low cost
 fast
 good practice/training with benchmarking process
 information sharing
Challenges
 fosters mediocrity
 limits options for growth
 low performance improvement
 internal bias
 may not yield best-in-class comparisons

COMPETITIVE BENCHMARKING
Competitive benchmarking is the comparison to the best direct competitors, and serves to
prevent complacency.
This form of benchmarking provides an opportunity to know yourself and your competition
better; combine forces against another common competitor.

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Benefits
 comparing like processes
 know your competition better
 useful for planning and setting goals
 similar regulatory issues
Challenges
 difficult legal issues
 relatively low performance improvement
 limited by trade secrets
 competitors could capitalize on your weaknesses

FUNCTIONAL BENCHMARKING
The comparison of functional activities, even in dissimilar industries—that holds the most
potential for discovering and stimulating innovative practices.
Functional benchmarking might identify practices that are superior in your functional areas in
whatever industry they may exist.
Benefits
 provides industry trend information
 quantitative comparisons
 better improvement rate; about 35
Challenges
 diverse corporate cultures
 great need for specificity
 common functions can be difficult to find
 takes more time than internal or percent

GENERIC BENCHMARKING
Generic benchmarking broadly conceptualizes unrelated business processes or functions that
can be practiced in the same or similar ways regardless of the industry
The focus is on being innovative and gaining insight into excellent work processes rather than
on the business practices of a particular organization or industry.
Benefits
 high payoff; about 35 percent
 non-competitive/nonthreatening
 broad ,new perspective
 innovative
 high potential for discovery
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Challenges
 difficult concept
 can be difficult to identify best-in- class
 takes a long time to plan
 known world-class companies are inundated with requests

BENEFITS OF BENCHMARKING
1. Behavioral Benefits: Benchmarking is essentially a learning experience. It helps an
organization focus and drive for consensus on what needs to be done and how to achieve
it, not argue over what should be done.
2. Benchmarking can provide the stimulus for improvement by people at all levels through
an externally focused, competitive situation to achieve world-class performance with
increased customer satisfaction.
3. Competitiveness: The bottom-line benefit of benchmarking is improved
competitiveness and increased value in the eyes of customers. Effective use of
benchmarking to develop and implement improvement actions can help organizations
achieve superior customer service levels.

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 CASE STUDY: HARLEY DAVIDSON

Harley-Davidson performed Internal Benchmarking and achieved the number one position in
the motorcycle industry with continuous improvement by learning from their various
competitors.
Harley-Davidson has over the years continued to remain a dominant force in the motorbike
industry globally. Its name, ‘HARLEY-DAVIDSON’, was derived from its founders Arthur,
Walter Davidson and William Harley in 1903. Despite the intense competition from its rivals,
aging customer base, the economic downturn and the high value of its products, the company
weathered the storm by remaining profitable.
Harley-Davidson continue to operate in the motor bike industry which is characterised by major
features like fierce competition, differentiation strategies and demographics.
Harley-Davidson was the biggest motorcycle firm in the United States until the late 1950’s
when the Japanese companies penetrated the local market. For example, Honda’s production
of the most technologically advanced heavyweight motorcycle in 1975 caused Kawasaki,
another Japanese company, to manufacture its own. Harley-Davidson was gradually losing its
competitive advantage because of this. This is clearly explained using porters five forces
model. The model is an analysis of the business environment and how to tackle the fluctuations
in the marketplace so as to compete effectively:
 Threat of new entrants
 Potential for substitutes
 Competitive rivalry
 Customers
 Suppliers
The constant element for the restructuring and repositioning of any organisation is change.
Harley changed their motorcycle design to cater the needs of other demographics. Their cost-
leadership strategy worked, they controlled 85% of motorcycle sales in America in the late
1960’s. In 1965, Harley-Davidson had to rely on its ‘goodwill’ to sustain sales but market share
was collapsing. The firm needed a reactive organisational change, this was implemented by
going public to raise sufficient capital for further investment and to catch up with its foreign
rivals that now controlled the market.
During the mid-1970’s, Honda revolutionized the motor bike trade with its hightech Goldwing
motorcycle, the release of this hefty motorcycle inducing traditional and non-traditional
customers to favour the Japanese brands. This caused Harley-Davidson’s market share to
reduce by over 80%, AMF to cede ownership back to the management and debts level to rise.
Harley-Davidson was at its lowest and only a transformational decision-making process and
organisational change could revive it now. Harley realised the need to assess the external
environment, thereby benchmarking the company against Honda. The leadership of Harley-
Davidson exhibited its excellent management skills here by realizing the need for a different
approach in its production process.

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In addition, a ladies group was created to capture the growing female consumers it ignored for
so long. These customer relationship strategies brought the company closer to its consumers.
This prompted a complete turnaround in the company’s fortune. New products were being
developed, technology was up to date, and the firm was operating at levels close to its full
potential. In 9years, revenue skyrocketed by $3.5billion and net income by $747million. Harley
explored new markets by manufacturing smaller, high performance and cheaper bikes i.e. V-
Rod and Street-Rod to appease the youths and women while maintaining its style for the older
generation of riders. Harley-Davidson established a partnership agreement with Porsche to
build new engines, this particularly targeted the young riders in America and the international
markets where BMW was gaining grounds.
Harley-Davidson had several drawbacks that caused its steady decline over the years. Firstly,
Market penetration was lacking significantly even with its brand superiority. The company’s
focus was on the local market but it could have infiltrated the international market, particularly
the European market. Secondly, the company was slow to develop its products. Competitors
were innovating to cater for the growing population of young adults and women, Harley-
Davidson could have reacted immediately by manufacturing its own line of products but they
didn’t. After the acquisition of Buell motorcycles, the company could have been rolled out new
models of low-budget motorcycles. This would have been a turning point in its target of young
riders. Thirdly, Harley should have improved its marketing and advertising strategies. Even
though its ‘image and lifestyle’ marketing strategy worked in the U.S, it didn’t extend to the
international market. At the beginning, the focus was on older males. However, it changed
strategy by targeting another segment of the market, younger males and women. With proper
implementation of customer relationship management, the company could have paid more
attention to the needs of each section of the population.

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REFERENCES
 https://www.academia.edu/36153210/Harley-Davidson_Case_Study
 https://www.oshatrain.org/notes/2fnotes04.html
 https://www.oberlo.in/ecommerce-wiki/benchmarking
 https://www.shopify.in/encyclopedia/benchmarking

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