Harley Davidson Internal Analysis

IV. INTERNAL ENVIRONMENT

A. Corporate Structure

1. Divisional structure: manufacturer of motorcycle, many of the first business in the United States to use just-in-time inventory.

2. The direction are set onward by lower level of employees and implemented by top management. Top management encourages education for employees of company objectives and develops a trust that employees will execute the right decision.

B. Corporate Culture

1. Quality key ingredient - Open communication between all levels of employees was essential.

2. Values - They are the heart of how we run our business. They guide our actions and serve as the framework for the decisions and contributions our employees make at every level of the Company: tell the truth, be fair, keep your promises, respect the individual, and encourage intellectual curiosity.

3. Acquired by AMF in 1969. Acquisitions of Buell and Eaglemark were made successful in 1993.

C. Corporate Resources

1. Marketing

a. Harley marketing philosophy was developed based on the customers' desires, gathered through surveys, interviews and focus groups.

b. Efforts focus on distribution - divided among dealer promotions, customer events, magazine and direct mail advertising, public relations, cooperative programs with Harley Davidson/Buell Dealers, and national television advertising.

c. Harley's promotional events are rallies and motorcycle consumer shows.

2. Finance

a. Harley went public in 1986, since then about 18,000% gain in company stock

b. In 2005 revenue grew to $5.34 billion, a 6.5% increase over 2004, while net income grew 7.8% to $959.6 million.

c. Revenue for Buell was $93.1 million in 2005, a 17.8% increase from 2004, on a 13.3% growth in shipments.

3. Research and Development

a. High - performance with focuses on quality, powerful engine, and