Harley And The Macro Envrionment

The business goal of Harley-Davidson Motor Company is to produce and sell high-quality motorcycles. Until the early 2000s, this goal was the sole focus, and limited attention was given to internal audit and controls. Because of increased scrutiny and regulations worldwide, it was important for the company to continue its successful business model and also incorporate new thinking regarding the importance of controls. The challenge was in getting management, information technology (IT) and audit speaking the same language and working toward increased control, while still respecting the company's unique culture. A new department focused on control and risk mitigation needed a framework that focused on key value areas important to the business. This all had to be accomplished by building consensus among varied departments and without affecting quality or slowing production.

Harley-Davidson Motor Company was founded in 1903 in Milwaukee, Wisconsin, USA. It is the oldest producer of motorcycles in the US and has enjoyed 20 consecutive years of record revenue. For the year ended 31 December 2005, Harley-Davidson shipped 329,000 motorcycles (a 3.7 percent increase), had revenue of US $5.3 billion and experienced worldwide growth of 6.2 percent. In 2003, Harley-Davidson had limited IT controls in place and staff had limited control knowledge. There were no standardized user access process, no defined and documented change management process, and no rigor on backup and recovery processes, and there were minimal organizational standards. Although complying with Sarbanes-Oxley was going to be a challenge, the company took strong action, utilized COBIT (Control Objectives for Information and related Technology) and passed Sarbanes-Oxley year one compliance. In addition, it had been difficult finding other manufacturers for benchmarking, and COBIT helped show Harley-Davidson management where the company was positioned regarding controls and what should be done to improve.

Harley Davidson nonetheless faced formidable competition in the 1980s from Japanese motorcycle makers. Focused more on customer interface, the Milwaukee-based company allowed its engineering department to atrophy. New product development suffered, and production often was unable to meet customer demand. But the company overcame these challenges, and a great part of its recovery is attributable to a turnaround in purchasing and materials management strategy.

Over the years, Harley built up a strong heavyweight image over the American buyers, but this image could be unfit to the Europe or Pacific market. When the company first started up the business, the heavyweight idea was developed according to American's taste. They actually did successfully in the US market. However, when they expand to globalize the company, they did not do as successful as they did in the US market. They should do more research on people's preference and tastes in the targeted countries. Space could also be one of the reasons. Cities in Europe and Asia has very high density compare to US. For example Hong Kong is a tremendously high-density city. High-rise buildings are everywhere. Streets and roads are usually one to two lanes. Thus, people in Hong Kong would rather choose to buy a transportation vehicle than a motorcycle since pollution levels are very high. Moreover, traffic density in Hong Kong is also very high, and traffic jams happen everyday. If people want to buy a motorcycle, they would rather buy a small and light one, as it is more convenience to wander around small