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Demographically specking, Harley Davidson faced a problem with the shifting in the average age of their customers. Their core customers were baby boomers, however Harley Davidson worried about their aging and their ability to stay as a Harley Davidson riders. There size is about 80 millions; however their expansion plan aimed to extend the customers by 122.7 million by 2010 and increase with only 1.6% after 10 years. Men, between 34 and 54 years old, considered as a largest buyer.

Despite the economic rescission, Japanese manufactures started targeting the U.S. market and Harley Davidson’s market share was decreasing.

Talking about culture, Harley Davidson’s reputation was linked to Walter Davidson’s riding a Harley motorcycle to victory in a 1908 race and Harley Davidson established an image of “raw power”. Then the U.S. military, highway patrol officers and Hollywood celebrities used Harley motorcycles, which reflected an image of masculinity. So it becomes part of American culture and associated with the U.S. flag and America’s national symbol. Although it’s not mentioned in the case, but it is good to mention that rationally, Harley Davidson motorcycles are traditionally were for blue-collar workers. American people also, concerned about the fate of the motorcycle.

In 1920’s, Harley Davidson introduced its innovation, through the investment in R&D, the V-twin engine design with new four вЂ"cylinder engine. In addition to this, Harley Davidson developed electric starter, balloon tires, front brakes, and standardized parts, product quality also improved. After acquiring Buell, Harley Davidson introduced the VR-1000, a bike combined fuel injection over head cams, and liquid cooling. Something to mention is that Harley Davidson manufactured motorcycles were not high in quality, and the production was not