HARLEY DAVIDSON, INC.King of the Road

HISTORY TIMELINE1903

•William Harley, Walter and Arthur Davidson created the first Harley Davidson

1917

•Harley Davidson supplied around 15000 motorcycles to US military for World War I

1920

•Emerged as the largest motorcycle manufacturer in the world

1965

•The company filed for IPO and 53% stake was controlled by the owners

1969

•Harley was acquired by AMF

1981

•The company was bought by its management for $81.5 mn through leveraged buyout

1987

•It was listed in the NYSE after going public in 1986

1998

•Harley Davidson factory opened outside USA in Brazil

2011

•Started operations in India

MODELS AND AFTERMARKETThese model families are distinguishe

d by the frame, engine,

suspension, and other

characteristics

There are thousands of companies producing

aftermarket Harley-

Davidson parts

The aftermarket

now produces

every single part on a

Harley motorcycle in multiple

forms

Touring:These bikes

all have saddlebags and other

touring trim. The touring

bikes include the

"Road King," the "Electra Glide" and the "Ultra Classic."

Softail: A general-purpose

bike

Dyna:This classic

Harley chopper is 94 inches long and

about 630 pounds

Sportster: Harley's

entry-level bike. It is

lighter and sportier

than most Harley

Vrod:This is

currently the only

production Harley-

Davidson motorcycle us

ing the Revolution

engine

Street:The

cheapest Harley

Davidson ever built

THE COMPETITORS

GENERIC STRATEGIES US MOTORCYCLE INDUSTRY 2012

• Kawasaki

• Suzuki

• Harley Davidson

• Honda• Yamaha

Cost Leadership

Differentiation

Differentiation focusCost focus

TOWS MATRIX

• Threats• Environmental protection laws

• High rise in the oil prices

• Increase in labor cost

• Opportunities• Good brand value among

customers• Dealers are financing at

low interest rates

• Weaknesses• Declining financial performance• High prices (they have now

entered into the middleweight segment)

• Strengths:• Proven product quality• Strong market position and

brand image• Wide distribution network

Should expand the presence in Euro and other

emerging markets(S n O)

Optimizing the manufacturing cost and also

catering to the low price bikes

segment through Buell

(W n O)

Sales have declined and this may give

rise to more low weight bikes

boom(W n T)

R&D efforts should be on

reducing the oil consumption in

motors(S n T)

CORE COMPETENCY

Hundreds’ of models and efficient engine technology

Brand image and Brand loyalty

Differentiation strategy

Customization or Aftermarket

Promoting lifestyle through HOG (Harley Owners group)

Wide distribution network

Skillful workforce

CORPORATE STRATEGYThe Brand name in

the mind of consumers are

synonymous with “machismo and

machines of shining chrome”Adopted the MAN

(materials as needed) strategy similar to JIT of

Honda to reduce the manufacturing

costs

Though HD owns Harley Davidson Financial services (HDFS), they have

never tried to enter any other markets

Acquired Buell Motorcycle company for whom it used to sell the engines

Entered into Brazil in 1998 and India in 2011

Acquired MV Augusta company for $109 mn to expand its Europe network

Recently in Auto Expo, the affordable Street was revealed which is a new segment for HD

In 2008, a committee was formed to look after the reduction of carbon di oxide emissions for green environment

PROBLEMS FACED..

Environment protection laws have given a lot of trouble to HD lately

The R&D costs have gone up in order to reduce the carbon emissions

The average age of Harley Davidson users has increased to 42 which was below 35 in 1980

Catering only to High end Luxury segment

Debt issues after the leveraged buyout

Faced huge losses in sales in 1933 due to Great Depression

HD faced immense competition from Japanese Motorcycles from 1960 to 1985

High manufacturing costs and losing market share to Honda and Yamaha has caused financial crisis in 1980

Stock price has suffered to its all time low at the time of 2008 global recession

FINANCIALS

Market capitalization of $12.54 billion in 2013

P/E ratio is 20.12 which was 23 in 1986 The stock price movement of the last

22 years

RECOMMENDATIONS

Reinforce strategic alliances with Asian distribution network

Middleweight and lower weight motorcycle segments should also be targeted

Improve the return on assets/sales/equity

Redefine the Harley Davidson brand to attract the younger segment

Reducing licensing and operational costs

THANK YOU