Internal Analysis

Harley-Davidson Inc.

Internal Analysis

Group Members

Janneke Kanis

Christopher Klaesener

Jeroen Kwint

Annemiek Rensing

Hanqing Zhou

Foreword

As this was the first assignment we had to complete for the SMA class, we felt the need to put some additional information on top of the Internal Analysis. The purpose of this report is to give an insight on the internal factors that influence the performance of Harley-Davidson. In the first chapter our group decided to include a company history and a product description. Following that is the actual internal analysis.

In addition, it needs to be said that we thought about including a SWOT analysis, but decided to include it in the External Analysis. For a SWOT analysis to be truly of value one also needs to look at external factors.

Last, the financial analysis is first and foremost not complete. We only had a look at the information that was relevant internally. Once we will proceed to write the external analysis we will finalize the financial analysis.

Table of contents

Foreword 1

1 Background information 3

1.1 History and General Facts 3

1.2 Products and Services 4

2 Internal Analysis 7

2.1 Mission Statement 7

2.2 Vision 7

2.3 Mckinesy's 7 S Model 8

2.3.1 Strategy 8

2.3.2 Structure 9

2.3.3 Shared values 9

2.3.4 Style 10

2.3.5 Staff 11

2.3.6 Systems 12

2.3.7 Skill 13

2.4 Financial analysis 14

2.5 McCarthy's 4 Ps 18

2.5.1 Place 18

2.5.2 Product 18

2.5.3 Price 19

2.5.4 Promotion 19

Bibliography 20

APPENDICES 22

Appendix A: Product Description of the Harley-Davidson Motorcycles 22

Appendix B Retail Sales of Harley Davidson 25

Appendix C: Relevant Information used for Graph 1 and 2 26

1 Background information

1.1 History and General Facts

The legend started in 1903, a wooden shed in Milwaukee, when three young men used their hands to build a motorcycle. They were inspired by the development of a motorcycle with an integrated engine.

At the beginning, the motorcycle was not able to ride uphill and even had problems with pulling itself with its two-horsepower engine. After several modifications, the first Harley-Davidson was born. The top speed could reach 25 miles per hour. Milwaukee residents were impressed by Harley and Davidson's work, and so soon after those two neighbors started to go into production. At the end of 1903, three motorcycles had been sold.

From 1905 till now, Harley-Davidson has won many races, especially in the early and mid time. With its edge in racing and continuing new design, the company and its products have become very popular. Harley-Davidson experiences a huge expansion as they were the sole provider of motorcycles in both World War I and World War II.

In 1920, it had 2,000 dealers in 67 countries. With its powerful image and design, Harley-Davidson had survived the Great Depression of 1930s and was one of the two remaining motorcycle producers after that. The other company that also survived was Indian. When Indian was closed down later in 1953, Harley-Davidson became the only motorcycle manufacturer in US.

Because the company kept winning races and the demand of Harley-Davidson's motorcycles had increased to a tremendous point, Harley-Davidson was bought by the American Machine and Foundry Company (AMF) in 1969, a manufacturer of machinery, sporting goods, and automobiles. In order to meet growing demand, AMF opened a new plant in York and enlarged its assemble line. Unfortunately, because AMF kept focus on increasing the quantity to meet the demand quality issues started to arise. This resulted in call-backs and there were incidents where half of the manufactured bikes had to be repaired before leaving the factory for the first time. The reputation of Harley-Davidson was seriously hurt.

In 1981, 13 Harley-Davidson executives brokered a leveraged buyout of the company, which was funded by Citigroup . Gradually, Harley-Davidson won back its position and its market share. In the middle and late 1980s, in order to compete with low-priced Japanese motorcycles and obtain more customer loyalty, the company formed the Harley Owners Group (HOG).

With an improved financial situation, Harley-Davidson began to introduce new motorcycle models, including a redesigned Sportster in 1988, the Fat Boy in 1990, and the classically-styled Heritage Springer Softail in 1996 .

In 1993, Harley-Davidson made a joint venture, Harley-Davidson owns the majority, of the Buell Motorcycle Company and became one of the premier racing and sport motorcycle companies in the world.

Nowadays, Harley-Davidson Motor Company has over 8,500 employees worldwide . The headquarters of Harley-Davidson is located in the birthplace of the company, being Milwaukee, Wisconsin.

Harley-Davidson's legend has lasted for more than one hundred years, what started in a shed in Milwaukee is now on of the most famous companies in the world.

1.2 Products and Services

Harley-Davidson offers products to complete the entire riding experience, including motorcycles, Motor Clothes, Apparel and Accessories, and Genuine Motor Accessories. In addition they