Harley Davidson

Harley-Davidson Case Study

Introduction of the Company

In 1903 William Harley and Arthur Davidson produced the first Harley-Davidson motorcycle for sale to the public. The first year's production was only three motorcycles with one dealer. In 1909, Harley-Davidson introduced the first? V-twin engine, which is still the company standard today. Harley-Davidson rapidly grew to the largest motorcycle manufacturer in the world by early 1920s, with 2,000 dealers in 67 different countries.

By the 1930s all of the American competition was gone. Harley-Davidson suspended production of civilian motorcycles during World War II, and only built motorcycles for the military, exclusively. When the war was over, Harley-Davidson converted back to civilian production. Harley-Davidson's growth was fueled by acquisitions as well as capitalizing on new technologies. In 1969 Harley-Davidson merged with American Machine and Foundry (AMF). By the 1970s other competitors were entering the global market, and many of them were from overseas.

In an attempt to transform the company, in 1981,a senior executive of Harley-Davidson bought the company from AMF and turned the company around dramatically. Harley-Davidson emerged with new products and innovations along with a new commitment to quality, creating the dynasty Harley-Davidson has become today.

Harley-Davidson's success continued to grow as they received tariff relief from the International Trade Commission on 700cc motorcycles. Another event contributing to Davidson's renewed success was the formation of the Harley Owners Group (H.O.G.). This company sponsored club consisted of riders who transformed motorcycling into a family-oriented social sport. It continues to be very successful with 600,000 owners and 1,200 chapters worldwide.

Economic Indicators

Internationally, Harley-Davidson revenue has exceeded $816 million, which accounts for 18% of the net revenue for motorcycles. The Harley-Davidson emblem is an international icon and the sound of V-twin engine is unmistakable. Harley-Davidson is the number one motorcycle manufacturer and is also the number one seller of heavyweight bikes in the U.S. They also sell a line of clothing and accessories as well as make bikes under the Buell nameplate. Harley-Davidson's attire has attitude and rightfully so, there is no other motorcycle as classy as the "Harley". One Harley-Davidson tee-shirt slogan seems to capture the spirit by simply stating, "Put your ass on some class" (Williams,2004,1).

Mission and Vision Statement

Analysis of Mission Statement

Harley Davidson's Mission Statement states:

"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 (David, 2003 p12)."

The components of a mission statement should address; attention to customers, products and services the company provides, technology, concerns for survival, growth and profitability, philosophy, self-concepts, public image, and concerns for employees . The customer component is addressed in Harley- Davidson's mission statement and is identified as motorcyclists and the general public. The products and services component is identified in their motorcycles and the Harley-Davidson brand products. The mission statement mentions the target market as riders, and those who may want to become a rider. The Philosophy component of Harley-Davidson's mission statement is fulfilling dreams though the experience of riding a Harley. Harley Davidson's mission statement does not mention the following components; concern for survival, growth and profitability, technology, public image or the concern for employees.

Analysis of Vision Statement

According to the Davidson text, Harley Davidson's Vision Statement states:

"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 (David, 2003 p12)."

Customers are addressed in the vision statement as stakeholders. Stakeholders include the customers, suppliers, employees, shareholders, government, and society. The concern for survival component is outlined in the vision statement as the commitment by Harley-Davidson to continuously improve its mutually beneficial relationship with stakeholders. The self-concept of the vision statement is expressed in the empowerment of all employees.

The following components are not mentioned specifically in Harley-Davidson's vision statement; products and services, market, and technology, and philosophy. Most of these components are indirectly included the mission and vision statement as Harley-Davidson expresses their desire to bring quality products to the market it serves. The mission and vision statements articulate this overarching philosophy to remain number one.

Internal and External Audits

Internal and external auditing in a company is necessary in determining its strengths, weaknesses, opportunities and threats or its SWOT analysis. Included in the analysis is the internal factor evaluation (IFE), which specifically weighs the strengths and weaknesses, and the external factor evaluation (EFE), weighing the opportunities and threats. Each of these is an assessment of each SWOT element that affects Harley-Davidson's efforts to achieve its mission (See Appendix A). Harley-Davidson's case study determined the following SWOT analysis:

Internal Factors

Strengths

Harley-Davidson's internal strengths are their domestic and international market share, financial status, and product quality.

Harley Davidson's market share, both domestic and international, consists mainly of men between the ages of 40-50, who fall in upper income levels. Harley-Davidson is a national icon, and is also known for their quality products and brand recognition. Another very important internal strength is the fact that Harley-Davidson's financial status has had a steady increase in profit for over 18 years.