Group Presentation

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Overview• Brief History of HD

• Where we are now

• New Vision and Mission

• External Analysis - Competitor Analysis - PESTLIED Analysis - Porter’s Five Forces

• Internal Analysis - Value Chain - Boston Matrix • SWOT Analysis

• Conclusion

• Q&A

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HISTORYFoundation

It all started in Milwaukee, Wisconsin in 1903 when William, Walter, and Arthur Davidson, along with William S. Harley, created the first Harley-Davidson in their family shed.

Continued…

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1906, the Harley-Davidson Motor Company was incorporated.

WWI & WWII spurred growth for the company due to the militaries demand for HD’s economical motorcycles.

After WWII, the improved American economy, and higher demands for Harley-Davidson bikes encouraged the company to expand its efforts and purchase additional manufacturing capacity.

HD Today

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• Manufactures heavyweight Custom & Touring Motorcycles

• Owns Buell Motorcycle & Eagle-mark Financial.

• Has over 1,500 dealers worldwide.

• Foreign business is about 18% of Sales; R&D, 3.2%.

• Has about 8,800 employees.

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Existing Mission

“ We fulfill dreams thorough the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles, branded products and services in selected market segments ”

Proposed Vision

“ To be recognized as the best motorcycle company in the world ”

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Competitor Analysis

EuropeMarket Share8.1%Higher Price

Asia/ PacificMarket Share25.8%

AmericaMarket Share48.1%

External Analysis

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American Market

Harley Davidson,

48.10%

Honda, 14.30%

Suzuki, 12.70%

Yamaha, 9.20%

Kawasaki, 7.50%Others, 8.30%

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PESTLIDE ANALYSIS

Political

Low taxation from U.S government could encourage Japanese & European competition within the US.

Economic

Global recession is effecting economies world wide therefore HD has to sustain its position in the market.

Social

More diverse lifestyles, Creating many Harley Clubs and academies around the globe like Rider’s Edge.

Technological

New materials and other technologies are giving potential for innovative / customized motorbikes.

PESTLIED ANALYSIS

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Continued… Legal

Different taxation method in different countries especially southeast Asia where HD is facing legal issues due to excessive excise duty.

International

Volatile international market situation is restricting HD to capture new markets.

Environmental

Noise and some emissions standards of HD bike is not up to the level of some countries across the globe.

Demographic

Average purchaser of HD is mid forties married man with household incomes averaging $78600 while only 9% of consumers are women.

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Porter’s 5 Forces New Entrant

• High Entry Barrier

Economies of scale

High tech Involvement

Small scale Producers minimum threat

New Entrant

• High Entry Barrier

Economies of scale

High tech Involvement

Small scale Producers minimum threat

POWER OF SUPPLIER

•Out source Steel, Basic Electronics

Assembly within the Company

Ease of switching suppliers

POWER OF SUPPLIER

•Out source Steel, Basic Electronics

Assembly within the Company

Ease of switching suppliers

Internal Rivalry

•Honda, Yamaha, Suzuki ( All Japanese)

Honda mainly competing in U.S

Strategic Alliance between Suzuki and Kawasaki

Internal Rivalry

•Honda, Yamaha, Suzuki ( All Japanese)

Honda mainly competing in U.S

Strategic Alliance between Suzuki and Kawasaki

Power of Buyer

•Low power of customer as they are individual

Less no. of Dealers also rely on individual customers

Power of Buyer

•Low power of customer as they are individual

Less no. of Dealers also rely on individual customers

Substitute Product

•Very few substitute as luxury bike.

Cars, scooter and sports car.

NO subs when looking for luxury bike.

Substitute Product

•Very few substitute as luxury bike.

Cars, scooter and sports car.

NO subs when looking for luxury bike.

04/08/23 ® Tony Gauvin, UMFK, 2005 13

Value Chain

VALUE CHAINFirm InfrastructureGood Senior Management Has Transformed The Firm But It Remains Small Compared To Global Competitors.HRMExcellent But No Skills or Abilities Outside US.ProcurementVery Good Relationship With Streamlined Supplier Base, and New Brazil Operations Can Reduce Cost Further.

Inbound Logistics

Operations Outbound Logistics

Marketing & Sales

Services

Good Advance JIT Procedure

Excellent Highest Level Operations

Very Good Because of Good Shipment

Excellent Relations & Brand Strength

Excellent In US But Weak Outside

Internal Analysis

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Internal Analysis

HD

BOSTON MATRIX

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SWOT ANALYSIS Strengths

• Financially sound position, net income in 2008 was $1357.4 m .• Only major manufacture in US but now set up a huge plant in Brazil.• Financial services purchased in 1995 ( Eagle Mark ).• Dealers in 67 countries.• Very strong brand image in the U.S as an American Icon.• Extremely loyal and valuable workforce in U.S strengthening the brand

themselves.

Weakness• Still small compared to the competition, limiting their ability to invest in new areas• Probably less efficient then their competitors as they own very few assets outside

U.S.• Brand image is HD’s strength but is limited outside the U.S.• Customer loyalty outside US is low due to lack of after sale services.• No or very few Human resources outside the U.S in marketing and other fields.

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Continued…

Opportunities• Asian economy is booming, China is the only place not effected by global recession.• Increasing demand for the bikes in US. • New dealers can be found in South East Asia and Middle East.• Interest rates are at historical lows.• Globalizations gives the opportunity to reduce cost and gives the potential to form useful relations with firms across the globe. • Alliances with Ford Motor Company or other automobile manufacturers are possible.

Threats• The European Union’s motorcycles noise standards.• Risk of small custom bikes manufacturers joining the big companies.• Competitors are all from Japan & have more affordable and diversify range of bikes• Decreasing brand loyalty means the buying decisions are increasingly based on PRICE & PERFORMANCE.• Harleys average buying age is 42 years old and increasing.

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Conclusion

• Increase diversity programming• Explore opportunities for physical plant expansion into other

geographic areas to increase labor pool• Bring HD heritage to the rest of the world.

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Questions

?