STRATEGIC MANAGEMENT

CASE ANALYSIS

CASE:

HARLEY DAVIDSON, Inc. -2004

By

RICHARD.A.COX

FRANCIS MARION UNIVERSITY

Analyzes by,

HARI PRAKASH.N.V

Harley Davidson, Inc

Mission Statement says:

“We fulfill dreams through the experiences of motorcycling, by

providing to motorcyclists and to the general public an expanding line

of motorcycles, branded products and services in selected market

segments”

Vision Statement says:

“Harley-Davidson is an action-oriented, international company, a

leader in its commitment to continuously improve [its] mutually

beneficial relationships with stakeholders (customers, suppliers,

employees, shareholders, Government, and society). Harley-Davidson

believes the key to success is to balance stakeholders’ interests

through the empowerment of all employees to focus on value-added

activities.

MISSION statement analysis

COMPONENTS YES / NO

CUSTOMERS YES

PRODUCTS & SERVICES YES

MARKETS NO

CONCERN FOR SURVIVAL YES

TECHNOLOGY NO

PHILOSOPHY YES

SELF CONCEPT YES

CONCERN FOR PUBLIC IMAGE YES

CONCERN FOR EMPLOYEES NO

MISSION STATEMENT EVALUATION MATRIX

PROPOSED MISSION STATEMENT:

We fulfill dreams through the experiences of motorcycling, by

providing to motorcyclists and to the general public an expanding line

of motorcycles, branded products and services in selected market

segments. To be branded as the best motorcycle available in the world

through innovations. The total team effort of Harley-Davidson

employees is devoted to fulfilling dreams of customers and we believe

that there is not a motorcycle riding experience like a Harley-

Davidson’s

PROPOSED VISION STATEMENT:

The best quality motorcycle, motorcycle products and financial

services will be provided world wide is the commitment of Harley-

Davidson. Customer satisfaction is our motto and the Harley-Davidson

customers can experience the taste of reality of motorcycle dreams by

relaying their satisfaction on us. Harley-Davidson is dedicated to use

the advanced technology to produce the most superior motorcycle in

domestic and international markets. Stay competitive and continue

growth worldwide remain profitable and survive is our philosophy.

Employees of Harley-Davidson are the foundation of the company and

they are the driving force behind the Harley-Davidson name. The total

team effort of Harley-Davidson employees is devoted to fulfilling

dreams of customers and we believe that there is not a motorcycle

riding experience like a Harley-Davidson’s. Excellence is our push

though our Harley-Davidson bar and shield logo that says superior

quality. Honesty and customer loyalty and these morals are the

heartbeat of Harley-Davidson organization. Harley-Davidson do our

part in supporting all environmental laws in every country we do

business. Determination and commitment is the place where Harley-

Davidson intends to stay.

EXTERNAL ANALYSIS

PESTLE

POLITICAL

U.S Government and People are considering Harley-Davidson as

an American icon.

Opportunities in emerging economies [India, China] but

uncertain operating situations. The governments are not

deducting the taxes and levies, they consider Harley-Davidson as

an American idol so that they are not welcoming Harley-

Davidson into their soil. More and more talks are required for this

sanction, even between the nations.

ECONOMICAL

Confidence in economy is directly proportional to the purchasing

of consumer items.

The economic crisis will hit this segment very much.

Currency fluctuation is also a big problem in this industry.

SOCIAL

Academy of Motorcycling for those interested in learning to ride

a motorcycle. In U.S the number of motorcycle users is less so

that by introducing this type of academy will encourage more

and more public to come to motorcycling. This shows their social

responsibility by teaching and educating the public how to ride

bikes responsibly. “Riders-Edge” the motorcycling academy of

Harley-Davidson introduced more than 1000 aspiring

motorcyclists to the sport in 2000. Number of accidental death in

U.S is increasing so that this shows their social responsibility.

Average purchaser of a U.S Harley-Davidson motorcycle is a

married male in his mid-forties.

Average purchasers of a U.S Harley-Davidson have a household

income of $78,600.

Over two thirds of the sales of Harley-Davidson motorcycles are

to buyers with at least one year of education beyond high school.

30% of the Harley-Davidson buyers have college degrees. The

customers of Harley-Davidson motorcycles are creditworthy

persons who are well educated and having a social responsible

life.

Only about 9% of Harley-Davidson U.S retail motorcycles are to

women, this shows not only men but also women are interested

in Harley-Davidson.

TECHNOLOGICAL

This segment needs more and more technological advancements

because customers are going for more and more energy efficient

and technologically advanced bikes now a day.

Harley-Davidson is one of the main manufacturer and user of V-

ENGINE configuration.

Harley-Davidson’s have a wide variety of products according to

Standard, Performance, Touring & custom.

ENVIRONMENTAL

This industry is the first attacked by environmental activists, the

environmental laws varies from country to country. In Europe its

Euro, in India its BS.

Harley-Davidson’s one of the main problem is this environmental

problems.

LEGAL

A new assembly facility opens in Manaus, Brazil, the first

operations outside of the U.S, reduces taxes, make them more

affordable to a larger group of Brazilian customers.

Harley-Davidson is facing some legal problems in Asian

countries, in India there is 60% tariff and various other taxes will

cause the price of the bike to double.

Noise pollution and some emission standards of Harley-Davidson

bike is not up to the level of some countries across the globe.

Five Forces

Internal Rivalry: [High]

Four major competitors are mainly concentrated on these

heavyweight motorcycle segments: in addition to Harley-

Davidson the other three are Yamaha, Suzuki, Honda all are

Japanese companies.

Some of the major competitors of Harley-Davidson have

larger financial and marketing resources and are more

diversified (Example: Yamaha, half of its revenue is only from

motorcycles).

Polaris (American snowmobile/ATV manufacturer) producer of

“Victory” motorcycles priced its motorcycles below the

Harley-Davidson motorcycles.

Strategic alliance between Suzuki and Kawazaki in the areas

of product development, design, engineering, and

manufacturing of motorcycles, this alliance strengthened both

companies’ global motorcycle businesses.

Honda, the main competitor of Harley-Davidson in U.S eats up

some market share of Harley-Davidson.

Potential entrants: [Medium]

Entry barrier is very high is this segment, because this

segment needs a lot of capital investment and the industry is

on a maturity stage, so that there is only four main

competitors.

The economies of scale are low in this segment, which is the

reason why there are only four major players.

Train and installing machinery for this type of heavy weight

segment is highly capital required.

There is some small scale producers, who are making these

custom made motor cycles but the amount of their production

is not at all a threat for Harley-Davidson, and they are

increasing the interest of motorcycles among the general

public.

Substitute products: [Medium]

Harley-Davidson motorcycles are a luxury vehicle, so that

there is only a few close substitutes for heavy weight

motorcycles that could seriously affect the market.

Passenger cars, sports bikes, scooter bikes are the main

substitutes of Harley-Davidson motorcycles. Even cycle is a

substitute for this industry. Most of the buyers of this heavy

weight motorcycle are travelers, so even rail and airways can

be substitute for this product.

The people who are thinking of buying a heavy weight

motorcycle are not seriously considering one of these options,

scooter, and sports bike.

In India Enfield can pose as a small substitute.

Bargaining Power of suppliers: [Low]

Steel, basic electrical equipments and shipping of final

motorcycles are the main things Harley-Davidson seeks from

suppliers. For these items the number of suppliers is also high

so the bargaining power is low.

Harley-Davidson has a wide span of suppliers, so that if one

supplier attempted to increase the price, they can easily

switch to the alternate suppliers without any problem in

production.

Bargaining Power of Customers: [Medium]

Consumers of Harley-Davidson motorcycles are individual

customers, so that they can’t seriously affect Harley’s

financial position.

The numbers of dealers around the globe are also less and

they are also dependent to the individual customers, that

can’t affect Harley-Davidson’s financial position.

OPPORTUNITIES

The European demand for Harley Davidson is the highest in the

international market and represents the single largest

motorcycle market in the world. Harley-Davidson can exploit this

situation by introducing more products into European soil

(Harley-Davidson and Buell products).

Women and younger riders are increasingly becoming interested

in bikes. The major buyer of Harley-Davidson for now are male in

their mid forties, so by getting more women and young riders will

make Harley-Davidson flourish it’s revenues.

The international heavy weight market is growing and is now

larger than the U. S. heavyweight market. Harley-Davidson is

now concentrated on U.S market but the global market is

growing and Harley-Davidson can exploit this by going into more

and more global markets like Asian and European countries.

Market share increasing in Europe and Asia for the last two

years. Increase Harley-Davidson’s presence there will increase

its revenue. Making use of their Buell division they can get into

joint venture with Asian and European vehicle manufacturers.

Even if they can’t introduce their heavy weight models in India

they can introduce their Buell small and sports bikes in India with

these types of joint ventures.

Increasing demand in US markets for bikes. 92% of its

motorcycle customers intend to repurchase.

Customers value quality parts. Harley-Davidson have a good

brand value among its customers and in U.S people, so they can

exploit this situation, by teaching and educating the customers

what is considered as a quality product and what are the things

they are using for manufacturing their bikes. This will increase

the customer loyalty to this brand and this will help in a market

penetration.

THREAT

Harley’s ongoing capacity restraints caused a shortage supply

and a loss in domestic market share in recent years.

High rise in the Oil prices. Harley-Davidson vehicles are heavy

weight motorcycles and this is one of the major threats they are

facing, because their vehicles are more oil consuming.

Harley’s average buying age is 42 years old and increasing.

The European Union’s motorcycles noise standards are more

stringent than those of Environmental Protection Agencies in the

U.S and increased environmental stand

Some competitors of Harley Davidson have larger financial and

marketing resources and they are more diversified

Environmental protection laws

Buell division needs to continue to produce a quality motorcycle

under Harley’s brand name.

EFE MATRIX

Key external factors Weight RatingWeighted

scoreOPPORTUNITIES      

The European demand for Harley Davidson is the highest in the international market and represents the single largest motorcycle market in the world 0.15 4 0.6

The international heavy weight market is growing and is now larger than the U. S. heavyweight market 0.15 4 0.6

Women and younger riders are increasing becoming interested in bikes 0.1 3 0.3Market share increasing in Europe & Asia for last 2 yrs 0.1 3 0.3Increasing demand in US markets for bikes, 92% of its motorcycle customers intend to repurchase 0.1 2 0.2

Customers value quality parts 0.025 1 0.025THREAT      

Harleys ongoing capacity restraints caused a shortage supply and a loss in domestic market share in recent yrs 0.15 2 0.3

High rise in the Oil prices 0.14 2 0.28

Harleys average buying age is 42 years old and increasing 0.1 2 0.2

The European Union’s motorcycles noise standards are more stringent than those of Environmental Protection Agencies in the U.S and increased environmental stand 0.025 2 0.05

Some competitors of Harley Davidson have larger financial and marketing resources and they are more diversified 0.025 2 0.05

Environmental protection laws 0.025 2 0.05

Buell division needs to continue to produce a quality motorcycle under Harley’s brand name 0.05 3 0.15

TOTAL 1.14   3.105

Competitive Profile Matrix

CPM HARLEY HONDA YAMAHA

CRITICAL SUCCESS FACTORS Weight Rating

Weighted Score Rating

Weighted Score Rating

Weighted Score

Advertising 0.15 4 0.6 3 0.45 4 0.6

Product Quality 0.15 4 0.6 3 0.45 3 0.45

Price Competitiveness 0.1 1 0.1 3 0.3 3 0.3

Management 0.025 3 0.075 4 0.1 2 0.05

Financial Position 0.1 2 0.2 4 0.4 3 0.3

Customer Loyalty 0.15 4 0.6 3 0.45 3 0.45

Global Expansion 0.025 2 0.05 4 0.1 3 0.075

Market Share 0.3 2 0.6 4 1.2 3 0.9

TOTAL 1   2.83   3.45   3.13

INTERNAL ANALYSIS

FINANCIAL RATIOS

LIQUIDITY RATIOS

Current Ratio = Current Assets / Current Liabilities

= 2729/956

= 2.85

Quick Ratio = (Current Assets – Inventory) / Current Liabilities

= (2729-208)/956

= 2521/956 = 2.63

LEVERAGE RATIOS

Debt to Total Assets Ratio = Total Debt / Total Assets

=994/4923

=0.20

Debt to Equity Ratio = Total debt / Total stock holders equity

=994/2958 =0.34

Long Term Debt Equity Ratio = Long term Debt / Total stock holders

equity

=670/2958

= 0.23

Times Interest Earned Ratio = Profits before interests and taxes /

Total Interest charges

=1149/0

ACTIVITY RATIOS

Inventory Turnover = Sales / Inventory of finished goods

=4624/208

=22.23

Fixed Assets Turnover = Sales / Fixed Assets

=4624/2194

=2.10

Total Assets Turnover = Sales / Total Assets

=4624/4923 =0.93

Accounts Receivables Turnover = Annual Credit Sales / Accounts

receivable

=4624/1114

=4.15

Average Collection Period = Accounts Receivables / (Total credit

sales/365)

=1114/(4624/365)

=1114/12.66

=87.99

PROFITABILITY RATIOS

Gross Profit Margin = (Sales – COGS) / Sales

=(4624-3070)/4624

=1554/4624=0.34

Operating Profit Margin = EBIT / Sales

=1149/4624

=0.25

Net Profit Margin = Net Income / Sales

=761/4624

= 0.16

Return on Total Assets (ROA) = Net Income / Total Assets

= 761 / 4923

= 0.15

Return on Equity (ROE) = Net income / Total Stock holders

equity = 761 / 2958

= 0.26

Earnings Per share (EPS) = Net income / Total stock holders

equity = 761 / 302

= 2.519

Price Earning ratio =Market price per share/Earning

per share

=39.11/2.519

=15.526

Growth ratio

Sales =Annual % growth in total sales

= (4624-4091)*100/4091=13.029

Net income =Annual % growth in profits

=(760-580)*100/580=31.034

Financial strength of the company is good, but there is a

decline in the sales in 2003 as compared to the previous year

2002. Net income has increased.

FINANCIAL ANALYSIS 2003 2002 2001

LIQUIDITY RATIOS     

Current Ratio 2.86 2.09 2.33

Quick Ratio 2.64 1.87 2.07

The current ratio is high, its bad for the company

LEVERAGE RATIO     

Debt to Total Assets 0.20 0.20 0.19Debt Equity ratio 0.34 0.34 0.34

Long term DE ratio 0.23 0.17 0.22

Less Debt, good. What percentage of total funds is provided by creditors? Although creditors tend to prefer a lower ratio, management may prefer to lever operations, producing a higher ratio. A low ratio, on the other hand, indicates a wider safety cushion (i.e., creditors feel the owner's funds can help absorb possible losses of income and capital).

ACTIVITY RATIO     

Inventory Turnover 18.79 19.72 19.81Fixed Asset Turnover 1.78 2.40 2.47

Total Asset Turnover 0.79 1.11 1.15It’s almost flat over the period, but the turnover ratio is declining that’s not good for a company.

PROFITABILITY RATIO     

Gross Profit margin 0.21 0.35 0.34Operating profit margin 0.29 0.21 0.18Net Profit Margin 0.19 0.13 0.12ROA 0.15 0.15 0.14ROE 0.26 0.26 0.25

EPS 2.52 1.92 1.45Gross profit margin is declining that’s not good for the company, but net profit is increasing. Return.

GROWTH RATIO     

Sales -9.27 19.90  Net Income 31.14 32.56  

EPS 31.16 32.62  The sales has been declined in a huge percentage as compared to the previous year (2002). The other two are almost steady.

YEAR BY YEAR FINANCIAL ANALYSIS OF Harley-Davidson

STRENGTHS

Net income of 2003 was $760mn; it’s more than 30% as

compared to the previous year 2002.

The standard and performance segments of Harley Davidson

make up 70% of the European heavy weight motorcycle market

Harley-Davidson operates in two segments: Harley-Davidson

motorcycles & related products and HDFS (Harley-Davidson

Financial Services).

Harley-Davidson is the only major American heavyweight

motorcycle manufacturer.

Strong brand name, one of the main things which are required

for all companies in this industry.

The HOG (Harley Owners Group), which have a 7, 50,000

members world wide, is the industry’s largest company

sponsored motorcycle enthusiast organization.

Buell Riders Adventure Group (BRAG) was also formed recent

Customization of the bikes, this is Harley-Davidson’s major

revenue maker.

Harley-Davidson has a good marketing division and it’s divided

as dealer promotions, customer events, magazine and direct-

mail advertising, and public relations.

WEAKNESS

High price, Harley-Davidson bikes are the costly bikes in this

category. They just started making some bikes in the low cost

category.

Harley-Davidson has problems in gaining more market share in

some European countries (That’s one of the main markets for

Heavyweight motorcycles outside U.S).

They didn’t yet start its sales in India, one of the biggest

markets.

Required production is not met, analyzing the future of

Heavyweight motorcycle market

IFE MATRIX

KEY EXTERNAL FACTORS WEIGHT RATINGWEIGHTED

SCORESTRENGTHS      

Net income of 2003 was $760mn, its more than 30% as compared to the previous year 2002 0.15 3 0.45

The standard and performance segments of Harley Davidson make up 70% of the European heavy weight motorcycle market 0.09 3 0.27Harley-Davidson operates in two segments: Harley-Davidson motorcycles & related products and HDFS (Harley-Davidson Financial Services) 0.025 4 0.1Harley-Davidson is the only major American heavyweight motorcycle manufacturer 0.1 4 0.4

Strong brand name 0.15 4 0.6

The HOG (Harley Owners Group), which have a 7,50,000 members world wide is the industry’s largest company sponsored motorcycle enthusiast organization 0.05 4 0.2

Buell Riders Adventure Group (BRAG) was also formed recent 0.025 4 0.1

Customization of the bikes, this is Harley-Davidson’s major revenue maker 0.025 4 0.1

Harley-Davidson have a good marketing division and its divided as dealer promotions, customer events, magazine and direct-mail advertising, and public relations 0.025 4 0.1

WEAKNESS      

High price 0.15 2 0.3

Harley-Davidson has problems in gaining more market share in some European countries (That’s one of the main markets for Heavyweight motorcycles outside U.S). 0.06 1 0.06

They didn’t yet start its sales in India, one of the biggest markets 0.1 1 0.1

Required production is not met, analyzing the future of Heavyweight motorcycle 0.05 1 0.05

market TOTAL 1   2.83

SWOT matrix

Opportunity ThreatS

tren

gth

SO Strategy: ST Strategy

SALE OF HARLEY DAVIDSON IN EUROPEAN MARKET IS OF 70% AND THEY CAN IMPROVE THIS BY INTRODUCING MORE PRODUCTS INTO THE MARKET AND THROUGH ADVT AND ALL. BECAUSE THIS MARKET IS GROWING HIGHLY.  

EXPAND PRODUCTION TO EUROPE INCREASE STRONG BRAND NAME

EXPAND PRODUCTION TO ASIAINCREASE MARKET TO YOUNGER CUSTOMER

HARLEY DAVIDSON CAN MAKE USE OF ITS GOOD BRAND NAME, BECAUSE NOW A DAY PEOPLE ARE MORE CONCENTRATING ON QUALITY PRODUCTS  

Wea

knes

s

WO Strategy WT Strategy

      

  IMPROVE EMPLOYEE RELATIONSHIP

               

GRAND STRATEGY MATRIX

Buell Motorcycles a division of Harley-Davidson. This was purchased

by Harley-Davidson; this division still uses Harley-Davidson to

improve its sales.

STRATEGY: MARKET DEVELOPMENT, MARKET PENETRATION,

PRODUCT DEVELOPMENT, HORIZONTAL INTEGRATION,

DIVESTITURE, LIQUIDATION.

SPACE Matrix

Financial Strength (FS)

  Environmental Stability

(ES)  

Return on Investment 2 Technological changes -2

Leverage 3 Rate of Inflation -3

Liquidity 4 Demand variability -6

Working Capital

2 Price range of competing

products -2

Cash Flow

5 Barriers to entry into

market -6

Inventory Turnover 3 Competitive pressure -4

Earnings per Share 3 Ease of exit from market -3

Price Earnings Ratio 2 Price elasticity of demand -2

    Risk involved in business -2

Total 24 Total -30

Competitive Advantage (CA)   Industry Strength (IS)  

Market share -1 Growth potential 3

Product quality -1 Financial stability 3

Product life cycle -3 Technological know how 5

Customer Loyalty -1 Resource utilization 4

Competition's capacity utilization -4 Ease of entry into market 6

Technological know-how

-1 Productivity, capacity

utilization 4

Control over suppliers & distributors -2    

Total -13 Total 25

Average value for FS = 3

Average value for CA = -1.85

Average value for IS = 4.17

Average value for ES = -3.33

Point on X axis = (-1.85+4.17)/2 = 1.16

Point on Y axis = (3-3.33)/2 = -0.165

Strategies:

STRATEGY: BACKWARD INTEGRATION, FORWARD

INTEGRATION, HORIZONTAL INTEGRATION, MARKET

PENETRATION, MARKET DEVELOPMENT, PRODUCT

DEVELOPMENT.

I.E MATRIX

Harley-Davidson U.S MARKET SHARE: 49%

Harley-Davidson EUROPEAN MARKET SHARE: 07%

Harley-Davidson ASIAN MARKET SHARE: 22%

STRATEGY: BACKWARD INTEGRATION, FORWARD

INTEGRATION, HORIZONTAL INTEGRATION, MARKET

PENETRATION, MARKET DEVELOPMENT, PRODUCT

DEVELOPMENT

BCG MATRIX

Harley-Davidson RELATIVE MARKET SHARE: 48%

GROWTH RATE: 13.029

STRATEGY: MARKET PENETRATION, MARKET DEVELOPMENT,

PRODUCT DEVELOPMENT, DIVESTITURE.

QSPM

    J.V EUROPE J.V ASIASTRENGTH WEIGHT AS TAS AS TAS

Net income of 2003 was $760mn, its more than 30% as compared to the previous year 2002 0.075 3 0.225 3 0.225

The standard and performance segments of Harley Davidson make up 70% of the European heavy weight motorcycle market 0.045 3 0.135 2 0.09Harley-Davidson operates in two segments: Harley-Davidson motorcycles & related products and HDFS (Harley-Davidson Financial Services) 0.0125 4 0.05 3 0.0375

Harley-Davidson is the only major American heavyweight motorcycle manufacturer 0.05 4 0.2 4 0.2

Strong brand name 0.075 4 0.3 2 0.15The HOG (Harley Owners Group), which have a 7,50,000 members world wide is the industry’s largest company sponsored motorcycle enthusiast organization 0.025 2 0.05 3 0.075Buell Riders Adventure Group (BRAG) was also formed recent 0.0125 2 0.025 4 0.05

Customization of the bikes, this is Harley-Davidson’s major revenue maker 0.0125 3 0.0375 3 0.0375

Harley-Davidson have a good marketing division and its divided as dealer promotions, customer events, magazine and direct-mail advertising, and public relations 0.0125 2 0.025 2 0.025WEAKNESS         0

High price 0.075 2 0.15 2 0.15

Harley-Davidson has problems in gaining market share in some European countries (one of the main markets for Heavyweight motorcycles outside U.S). 0.03 3 0.09 3 0.09

They didn’t yet start its sales in India, one of the biggest markets 0.05 3 0.15 3 0.15

Required production is not met, analyzing the future of Heavyweight motorcycle market 0.025 4 0.1 4 0.1OPPORTUNITIES         0

The European demand for Harley Davidson is the highest in the international market and represents the single largest motorcycle market in the world 0.075 4 0.3 2 0.15

The international heavy weight market is growing and is now larger than the U. S. heavyweight market 0.075 4 0.3 3 0.225

Women and younger riders are increasing becoming interested in bikes 0.05 3 0.15 4 0.2

Market share increasing in Europe and Asia for the last two years 0.025 3 0.075 4 0.1

Increasing demand in US markets for bikes 0.1 2 0.2 3 0.3

Customers value quality parts 0.0125 1 0.0125 2 0.025THREAT      

Harleys ongoing capacity restraints caused a shortage supply and a loss in domestic market share in recent years 0.075 4 0.3 3 0.225Harleys average buying age is 42 years old and increasing 0.025 3 0.075 2 0.05The European Union’s motorcycles noise standards are more stringent than those of Environmental Protection Agencies in the U.S and increased environmental stand 0.0125 3 0.0375 2 0.025Some competitors of Harley Davidson have larger financial and marketing resources and they are more diversified 0.0125 2 0.025 3 0.0375

Environmental protection laws 0.0125 4 0.05 2 0.025

Buell division needs to continue to produce a quality motorcycle under Harley’s brand name 0.025 1 0.025 2 0.05  1   3.0875   2.7925

STRATEGY RECOMMENDATION & IMPLEMENTATION:

MARKET PENETRATION

Get some more market share from the existing market, like U.S,

U.K, and Japan etc through more marketing techniques like

advertising. Harley-Davidson has a good brand name so it’s easy

for them to eat up the competitor market share if they can

provide some more customer benefit.

Competition is high in this segment mostly in U.S so market

penetration can be a good choice for the company.

Expand the HOG (Harley Owners Group) to Asian countries, if the

company can provide the customer satisfaction that they are

providing to the U.S customers to the Asian customers they can

increase the sales.

PRODUCT DEVELOPMENT

Younger generation and female are now coming to this segment

so expand the motor cycle segments to younger generation and

females.

In Europe they can increase or expand the Buell’s market share

by introducing new motorcycles.

New hybrid bikes, low cost street bikes, Energy efficient bikes for

the developing countries and new environmental friendly bikes

will help Harley-Davidson to get more market share.

MARKET DEVELOPMENT

Harley-Davidson can bring in their vehicle to Asian countries like

India and China, because these countries have a high population

and the market potential is also high.

The cost to bring in the old vehicles (old product) to India is so

much difficult because there are so much environmental laws are

there which won’t allow that type of vehicles to come to India,

and its difficult that taxes and levis are high in India so starting

new plant in India can solve this problem. Negotiations with the

Government can solve these problems.

DIVERSIFICATION

Bring in new vehicles to new markets like India and China is a

good choice, but it’s too costly.

Bringing new types of recreational vehicles is a best choice.

RECOMMENDATION

Expand European and Asian market.

Increase the sales of Buell sport bike and Harley-Davidson to

younger customers and females.

Horizontal diversification: acquires or develops new products that

could appeal to its current customer groups even though those

new products may be technologically unrelated to the existing

product lines.

Concentric diversification: Bring in new recreational vehicles.

EVALUATION

REVIEW UNDERLYING BASES OF STRATEGY

Once again prepare all the internal and external analysis (eg:

EFE & IFE)

Compare the already prepared analysis with the one which will

be prepared after the new strategy implementation.

MEASURING ORGANIZATION PREFERENCES

Analyze all financial ratios (current and the future).

If any advantage, then implement the new strategy, otherwise

continue with the present one.

Reference: Strategic Management Concepts and Cases; Fred R. David, 10th & 12th Edition. www.wikianswers.com www.yahoo.com (yahoo finance) www.harley-davidson.com www.google.com http://www.fool.com/investing/value/2006/08/02/calculating-return-on-

assets.aspx http://www.va-interactive.com/inbusiness/editorial/finance/ibt/ratio_analysis.html