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Harley-Davidson History.pdf
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Overview
Harley-Davidson’s management had much to be proud of as the company wrapped up its Open Road Tour centennial celebration that began in July 2002 in Atlanta, Georgia, and ended on the 2003 Memorial Day Weekend in Harley’s hometown of Milwaukee, Wisconsin. The 14-month Open Road Tour drew large crowds of Harley owners in each of its five stops in North America and additional stops in Australia, Japan, Spain, and Germany. Also during its 2003 centennial year, Harley-Davidson was named to Fortune’s list of “100 Best Companies to Work For” and was judged third in automotive quality behind Rolls-Royce and Mercedes-Benz by Harris Interactive, a worldwide market research and consulting firm best known for the Harris Poll. The company’s revenues had grown at a compounded annual rate of 16.6% since 1994 to reach $4.6 billion in 2003—marking its 18th consecutive year of record revenues and earnings. In 2003, the company sold more than 290,000 motorcycles, giving it a commanding share of the 651+cc motorcycle market in the U.S. and the leading share of the market in the Asia/Pacific region. The consistent growth had allowed Harley-Davidson’s share price to appreciate by more than 15,000% since the company’s initial public offering in 1986.
In January 2004 the company’s CEO, Jeffrey Bleustein, stated that Harley-Davidson’s earnings growth rate should fall in the mid-teens for the foreseeable further and the company expected to increase unit sales to 400,000 units by 2007. However, not everyone was as bullish
*This teaching note reflects the thinking, insight, and analysis of case authors, Professor John E. Gamble and Diplom-Betriebswirt Roger Schäfer, both of the University of South Alabama.
on Harley-Davidson’s future, with analysts pointing out that the company’s plans for growth were too dependent on aging baby boomers. The company had achieved its record growth during the 1990s and early-2000s primarily through the appeal of its image with baby boomers in the U.S. There was some question how much longer boomers would choose to spend recreational time touring the country by motorcycle and attending motorcycle rallies. The company had yet to develop a motorcycle that appealed in large numbers to motorcycle riders in their 20s or cyclists in Europe who both preferred performance oriented bikes rather than cruisers or touring motorcycles. Another concern of analysts watching the company was Harley-Davidson’s short-term oversupply of certain models brought about by the 14-month production run for its 100th anniversary models.
In the world of motorcycling there is a manufacturer and their bikes that stand out over all the rest. Harley-Davidson motorcycles are the best motorcycles in the world because of heritage and tradition, the come back after a difficult era, and the support from the bike owners that is a carefully maintained cult.
It is the only real American made motorcycle. A Harley is the best motorcycle on the road. Harley Davidson is the oldest motorcycle company. A Harley Davidson is a good investment. American riders do not want to ride "Jap Junk." Riders do not want to start on something small and have to trade up.
FORBES MAGAZINE names Harley-Davidson Company of the Year (December 20, 2001) “Harley-Davidson, Inc. has been named Company of the Year by FORBES Magazine, one of the worlds leading business publications.” Key factors for the FORBES Company of the year award included Harley-Davidson’s record sales growth and earnings, along with strong overall financial performance. This is due to the great strides in engineering and development, along with the respect of the American people for an outstanding American company.
There are two basic types of motorcycles. One type is made for riding on smooth
From humble beginnings in 1901 to current day, Harley-Davidson strives to build and provide not only a mode of transportation but also a lifestyle. According to Harley-Davidson (2001-2011), the company mission reads “We ride with our customers and apply this deep connection in every market we serve to create superior value for all of our stakeholders” (Company, para. 2). The company always has not experienced the success they are realizing today and no one knows what challenges tomorrow can bring. Harley-Davidson is committed to providing the best customer service in every department.
This case study is about “Specialized Bicycle Components Inc.” known as Ride the Red “S”. Specialized was founded in 1974 by Mike Sinyard. According to Chris Murphy, director of marketing for Red “S”, specialized is for serious riders. He says, “The customer is buying the ride from us, not just the bike.” The company began to produce its own bike parts by 1976, and introduced the first major production mountain bike in the world in 1980. Specialized now has an extensive global distribution network of 5000 retailers in 35 countries in Asia, North America, South America, and Australia. They maintained a reputation as the technological leader in the bike and bike accessories. The formal mission is still the same since they established the company “To give everyone the best ride of their life.”
Arthur Davidson’s next move was to convince government officials that motorcycles should replace bicycles in the U.S. Postal Service. By 1914 the Postal Service had more than 4,800 Harley-Davidson motorcycles in its transportation fleet. By the time World War I was over, Harley-Davidson had become the largest motorcycle manufacturer in the world, and its motorcycles could be bought from more than 2,000 dealers in 67 countries worldwide.
Some of the top competitors are Yamaha, Honda, Kawasaki, and BMW. Harley-Davidson has to maintain the classic styling, feel, and sound of its motorcycles with incorporating modern technology, such as antilock brakes, fuel injection, belt drive, audio packages, and including liquid cooling on some new models. In my opinion, there is risk that Harley will lose focus on its American customer and other customer base in the rush to expand as a global
The Current situation is the need of a marketing plan to help increase sales that attract young and older customers. There are fundamental assets that focus on 35-50 year olds and 21-35 year olds who are buying motorcycles. The older customers seem not interested in the modern lifestyles that CruiserThorr symbolizes. However, the younger customers do not have disposable funds to buy the motorcycles. They prefer a lower c...
H-D has multiple risk factors that it calls out in the annual report. Many of these factors include items identified in revenue and cost factors. One of the main increased costs that results in potential revenue is the expansion into immature markets. There are many things to consider when entering a new market such as India. First, what are the social implications and what does the brand mean in that country. Though population is high and units of motorcycle sales are one of the largest in the world, what existing product is similar to high end motorcycles? International expansion means understanding governmental affairs and working with multiple parties to open channels to sell product. Prior to 2007, H-D
Still riding that old bike? Tired of watching other vehicles pass you while you are on that uncomfortable, hard to steer bike? Well a new year has come and a new change comes with it. If you want to change your driving lifestyle then Harley-Heaven has solution for you.
Polaris, a manufacturer of snowmobiles and ATV's, saw the sales Harley Davidson was enjoying and decided to enter the heavy cruiser market. It created its own Victory line and then acquired the old Indian brand in 2011. As each year passed, Victory's product line has grown in popularity, mostly at the expense of Harley Davidson. The lesson here is that you can never rest on your laurels. Just because you have a cult following, and Harley owners are seriously brand loyal owners, it does not mean that you have control of the market forever. The more successful you are, the more the competition targets your brand. In fact, takeover speculation continues to
Harley Davidson Inc. Motorcycle Industry. INTRODUCTION The purpose of this report is to develop a strategic corporate objective for HarleyDavidson Inc., a publicly traded, employee owned manufacturer of heavyweight motorcycles, recreational and commercial vehicles, military defense items, and small engines, distributing its products to domestic and international markets targeting men and women of all ages. INDUSTRY AND COMPETITIVE MARKET
Since consumers view motorcycles as leisure and luxury items instead of a necessity, the company should be able to target those who live in urban areas with high public transportation and population. People who do not mainly use cars in those cities will likely consider buying a motorcycle for convenience and accessibility. Thus, the company needs to have an aggressive marketing in concentrating and addressing those needs which will result in more attention from the riders. From a consumer’s perspective, Harley-Davidson products are costly and expensive. Those who could be able to afford motorcycles are mainly wealthy and have high-income. These reasons explained why consumers think of motorcycles as leisure items. For instance, when sales decline, a cost reduction on the least popular models that did not give the company an above-average return should be considered as a second alternative. However, reducing model prices could risk the company’s margins, Harley-Davidson could protect its profitability by
Italian manufacturer Piaggio ranks as one of the world’s top four players in its core business. It has consolidated leadership in the European 2-wheeler market. Piaggio should not miscalculate its competitors. Competition in the industry is very powerful, not only nationally but internationally as well. This is due to two well-established companies in this sector which are the Japanese Yamaha and Honda. Yamaha and Honda strengths are their long-run experience in the sector and the high quality image of products. Due to participations to the motorcycle championships, these two companies constantly receive positive feedbacks to their efforts in researching for first class products. In the future, other kinds of competitors are expected to arise: Chinese companies whose ability to imitate and create similar products at highly competitive prices is getting more and more dangerous (Piaggio, 2008)