Executive Summary Of Harley-Davidson

To : Ronald Basini

From : Rekha Endurthy

Date : Feb 4, 2006

Topic : Harley-Davidson's Strategic vision, company objectives, and overall strategy

1. Summary of the company business model betwen1994 - 2003:

Harley-Davidson is the 100-year-old, leader in manufacturing and selling motorcycles.

Good relationships, continuous improvement, employee and management involvement, team building or employee training and empowerment are not just words out of a management book for Harley-Davidson. Only by adopting those management techniques and building a solid base between the management and the Unions/employees made it possible for Harley-Davidson to improve its management processes. While management's responsibility is to build relationships with the employees, marketing's responsibility is to build relationship with the potential and existing customers. The realization of the importance of customer feedback led Harley to develop new marketing techniques. But, marketing strategies would not be enough if quality and reliability did not improve. Therefore, we can clearly see the impact Harley's improved manufacturing process, which consisted of: JIT, EI, and SOC had on their continuously improving environment.

The three M's to Harley's success (management, marketing, and manufacturing) can be implemented into any company. The key is to understand that all companies are different and the specifics, which may have worked for Harley, may not work for another. However, the concepts will be the same. If management can grasp the ideals that Harley thrives on, today, any company can learn to compete in this newly developing global economy.

2. Strategic vision, company objectives, and overall strategy (Reference 2nd chapter)

THE THREE M'S OF HARLEY'S SUCCESS

a. MANAGEMENT

b. MARKETING

c. MANUFACTURING

The Strategy according to the company levels:

Corporate:

Corporate management focused mostly on short term returns.

Division:

Harley-Davidson Credit, Eagelmark's largest division provides wholesale financing and insurance programs, including motorcycle floor-planning, parts and accessories trade acceptance and commercial insurance brokerage to Harley-Davidson's US dealer network.

Functional:

High inventories of parts gobbled up cash and reduced productivity.

Operational:

Belief in quick fixes for problems, such as throwing in computers and state-of-the-art machinery to improve productivity.

Strategic Vision:

Harley-Davidson, Inc. is an action-oriented, international company, a leader in its commitment to continuously improve our mutually beneficial relationships with stakeholders (customers, suppliers, employees, shareholders, governments 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.

Harley-Davidson is driven by a constant vision of what an excellent company should be: one that is never satisfied with the status quo but is always searching for ways to do things better. This is best exemplified by a manager's comment, "The day we think we've arrived is the day we should all be replaced by managers of greater vision" All companies can and should learn from this position and adopt the idea of continuous improvement.

Continuous improvement demands involvement from employees. Management's dilemma was how to align employee motivation with company goals. In Harley-Davidson's case, all employees take part in a gain-sharing program and are paid cash incentives for attaining and maintaining quality, profitability, and product delivery goals. In 1995, more than 2,000 of Harley's 4,694 employees took training and education programs from the Harley-Davidson Learning Center. These courses helped the company to be more competitive and to foster employees' personal growth and development. Extensive team-building has taken place at all levels of the company, including team-building for union leaders, negotiation committees, and stewards. Open communication, at all levels, is used as a major key to achieving teamwork and employee participation. For example, engineers are located right in the plant, within walking distance of machine operators. The practice of open communication is also represented in the relationship between top management and the union.

Harley Davidson has an untypical relationship with the union. Continuous improvement techniques could have been stopped if the company did not have a good relationship with the union. The union viewed management as a partner instead of an adversary. Management's good-faith dealing's with the union was a factor in this special relationship.

Harley-Davidson 's Marketing Mix:

Product:

Not only does it serves as a customer relation's device, but as a way to showcase and demonstrate new production.

Promotion:

The use of priceless advertising concluded with leather jackets, T- shirts, chaps, boots, caps, helmets and other accessories. Also it conducted Motor Cycle rallies improving its dealer network to broaden its appeal to new customers. Further it improved the motorcycle displays, apparel and other merchandize that cyclist wished to purchase.

Place:

Currently, people must wait six to eighteen months for a new motorcycle and the price for