Strategic Audit for Harley Davidson (1981)

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Strategic Audit for Harley Davidson (1981) I. CURRENT SITUATION A. Current Performance Losing money, market share, and relevance in a changing industry with new foreign competitors. • Stiff foreign competitors introducing new designs • HD was too slow in development and unpredictable in reacting • Outmoded technologies • Poor quality and shoddy workmanship B. Strategic Posture I. Mission –"We fulfill dreams through the experiences 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 website, p.2)." 2. Objectives a) "We deliver experiences" b) Developing relationships with all stakeholders—customers, employees, investors, suppliers, governments, and society. c) Provide a good quality cycle d) Employees are both enthusiasts and customers 3. Strategies a) 1981 13 H-D executives, including William Davidson (grandson of founder Arthur Davidson), conducted a leveraged buyout of AMF to reacquire H-D and ward off bankruptcy of the company. b) Implemented Total Quality Management c) Implemented Just-In-Time inventory d) Lobbied Washington for tariffs on imports e) Direct marketing to the loyal customer base f) Sponsored the Harley Owners' Group (HOG) g) Launched SuperRide to attract a new customer base h) Offered customers a free one-year membership to groups, publications, receptions, etc. 4. Policies a) Short-term profits more important than R&D and retooling b) Stiff foreign competition ignored c) Employees has little or no input in the company d) Very slow R&D; very slow in reacting to more advanced technological changes II. Strategic Managers A. Board of Directors 1. Nine members, seven are outsiders 2. Respected Americans, four have been affiliated with HD since the early 1970s 3. Three have specialized marketing experience; four have international backgrounds B. Top Management 1. Thirteen top executives who conducted the leveraged buyout 2. All have worked for or been affiliated with HD since early 1970s 3. Goal was to reacquire and restructure the company to stave off bankruptcy. III. External Environment (EFAS) A. Societal Environment 1. Economic a) Stagflation, or "bottle-neck" inflation, since early 1970s

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