harley davidson strategic management changed & new
DESCRIPTION
This is rebuilted and changed strategy analysis of Harley Davidson case from Stragegic Management text of Fred r david. this is just for getting details not for case submissions. checkTRANSCRIPT
STRATEGIC MANAGEMENT
CASE ANALYSIS
CASE:
HARLEY DAVIDSON, Inc. -2004
By
RICHARD.A.COX
FRANCIS MARION UNIVERSITY
Analyzes by,
HARI PRAKASH.N.V
Harley Davidson, Inc
Mission Statement says:
“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”
Vision Statement says:
“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.
MISSION statement analysis
COMPONENTS YES / NO
CUSTOMERS YES
PRODUCTS & SERVICES YES
MARKETS NO
CONCERN FOR SURVIVAL YES
TECHNOLOGY NO
PHILOSOPHY YES
SELF CONCEPT YES
CONCERN FOR PUBLIC IMAGE YES
CONCERN FOR EMPLOYEES NO
MISSION STATEMENT EVALUATION MATRIX
PROPOSED MISSION STATEMENT:
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. To be branded as the best motorcycle available in the world
through innovations. The total team effort of Harley-Davidson
employees is devoted to fulfilling dreams of customers and we believe
that there is not a motorcycle riding experience like a Harley-
Davidson’s
PROPOSED VISION STATEMENT:
The best quality motorcycle, motorcycle products and financial
services will be provided world wide is the commitment of Harley-
Davidson. Customer satisfaction is our motto and the Harley-Davidson
customers can experience the taste of reality of motorcycle dreams by
relaying their satisfaction on us. Harley-Davidson is dedicated to use
the advanced technology to produce the most superior motorcycle in
domestic and international markets. Stay competitive and continue
growth worldwide remain profitable and survive is our philosophy.
Employees of Harley-Davidson are the foundation of the company and
they are the driving force behind the Harley-Davidson name. The total
team effort of Harley-Davidson employees is devoted to fulfilling
dreams of customers and we believe that there is not a motorcycle
riding experience like a Harley-Davidson’s. Excellence is our push
though our Harley-Davidson bar and shield logo that says superior
quality. Honesty and customer loyalty and these morals are the
heartbeat of Harley-Davidson organization. Harley-Davidson do our
part in supporting all environmental laws in every country we do
business. Determination and commitment is the place where Harley-
Davidson intends to stay.
EXTERNAL ANALYSIS
PESTLE
POLITICAL
U.S Government and People are considering Harley-Davidson as
an American icon.
Opportunities in emerging economies [India, China] but
uncertain operating situations. The governments are not
deducting the taxes and levies, they consider Harley-Davidson as
an American idol so that they are not welcoming Harley-
Davidson into their soil. More and more talks are required for this
sanction, even between the nations.
ECONOMICAL
Confidence in economy is directly proportional to the purchasing
of consumer items.
The economic crisis will hit this segment very much.
Currency fluctuation is also a big problem in this industry.
SOCIAL
Academy of Motorcycling for those interested in learning to ride
a motorcycle. In U.S the number of motorcycle users is less so
that by introducing this type of academy will encourage more
and more public to come to motorcycling. This shows their social
responsibility by teaching and educating the public how to ride
bikes responsibly. “Riders-Edge” the motorcycling academy of
Harley-Davidson introduced more than 1000 aspiring
motorcyclists to the sport in 2000. Number of accidental death in
U.S is increasing so that this shows their social responsibility.
Average purchaser of a U.S Harley-Davidson motorcycle is a
married male in his mid-forties.
Average purchasers of a U.S Harley-Davidson have a household
income of $78,600.
Over two thirds of the sales of Harley-Davidson motorcycles are
to buyers with at least one year of education beyond high school.
30% of the Harley-Davidson buyers have college degrees. The
customers of Harley-Davidson motorcycles are creditworthy
persons who are well educated and having a social responsible
life.
Only about 9% of Harley-Davidson U.S retail motorcycles are to
women, this shows not only men but also women are interested
in Harley-Davidson.
TECHNOLOGICAL
This segment needs more and more technological advancements
because customers are going for more and more energy efficient
and technologically advanced bikes now a day.
Harley-Davidson is one of the main manufacturer and user of V-
ENGINE configuration.
Harley-Davidson’s have a wide variety of products according to
Standard, Performance, Touring & custom.
ENVIRONMENTAL
This industry is the first attacked by environmental activists, the
environmental laws varies from country to country. In Europe its
Euro, in India its BS.
Harley-Davidson’s one of the main problem is this environmental
problems.
LEGAL
A new assembly facility opens in Manaus, Brazil, the first
operations outside of the U.S, reduces taxes, make them more
affordable to a larger group of Brazilian customers.
Harley-Davidson is facing some legal problems in Asian
countries, in India there is 60% tariff and various other taxes will
cause the price of the bike to double.
Noise pollution and some emission standards of Harley-Davidson
bike is not up to the level of some countries across the globe.
Five Forces
Internal Rivalry: [High]
Four major competitors are mainly concentrated on these
heavyweight motorcycle segments: in addition to Harley-
Davidson the other three are Yamaha, Suzuki, Honda all are
Japanese companies.
Some of the major competitors of Harley-Davidson have
larger financial and marketing resources and are more
diversified (Example: Yamaha, half of its revenue is only from
motorcycles).
Polaris (American snowmobile/ATV manufacturer) producer of
“Victory” motorcycles priced its motorcycles below the
Harley-Davidson motorcycles.
Strategic alliance between Suzuki and Kawazaki in the areas
of product development, design, engineering, and
manufacturing of motorcycles, this alliance strengthened both
companies’ global motorcycle businesses.
Honda, the main competitor of Harley-Davidson in U.S eats up
some market share of Harley-Davidson.
Potential entrants: [Medium]
Entry barrier is very high is this segment, because this
segment needs a lot of capital investment and the industry is
on a maturity stage, so that there is only four main
competitors.
The economies of scale are low in this segment, which is the
reason why there are only four major players.
Train and installing machinery for this type of heavy weight
segment is highly capital required.
There is some small scale producers, who are making these
custom made motor cycles but the amount of their production
is not at all a threat for Harley-Davidson, and they are
increasing the interest of motorcycles among the general
public.
Substitute products: [Medium]
Harley-Davidson motorcycles are a luxury vehicle, so that
there is only a few close substitutes for heavy weight
motorcycles that could seriously affect the market.
Passenger cars, sports bikes, scooter bikes are the main
substitutes of Harley-Davidson motorcycles. Even cycle is a
substitute for this industry. Most of the buyers of this heavy
weight motorcycle are travelers, so even rail and airways can
be substitute for this product.
The people who are thinking of buying a heavy weight
motorcycle are not seriously considering one of these options,
scooter, and sports bike.
In India Enfield can pose as a small substitute.
Bargaining Power of suppliers: [Low]
Steel, basic electrical equipments and shipping of final
motorcycles are the main things Harley-Davidson seeks from
suppliers. For these items the number of suppliers is also high
so the bargaining power is low.
Harley-Davidson has a wide span of suppliers, so that if one
supplier attempted to increase the price, they can easily
switch to the alternate suppliers without any problem in
production.
Bargaining Power of Customers: [Medium]
Consumers of Harley-Davidson motorcycles are individual
customers, so that they can’t seriously affect Harley’s
financial position.
The numbers of dealers around the globe are also less and
they are also dependent to the individual customers, that
can’t affect Harley-Davidson’s financial position.
OPPORTUNITIES
The European demand for Harley Davidson is the highest in the
international market and represents the single largest
motorcycle market in the world. Harley-Davidson can exploit this
situation by introducing more products into European soil
(Harley-Davidson and Buell products).
Women and younger riders are increasingly becoming interested
in bikes. The major buyer of Harley-Davidson for now are male in
their mid forties, so by getting more women and young riders will
make Harley-Davidson flourish it’s revenues.
The international heavy weight market is growing and is now
larger than the U. S. heavyweight market. Harley-Davidson is
now concentrated on U.S market but the global market is
growing and Harley-Davidson can exploit this by going into more
and more global markets like Asian and European countries.
Market share increasing in Europe and Asia for the last two
years. Increase Harley-Davidson’s presence there will increase
its revenue. Making use of their Buell division they can get into
joint venture with Asian and European vehicle manufacturers.
Even if they can’t introduce their heavy weight models in India
they can introduce their Buell small and sports bikes in India with
these types of joint ventures.
Increasing demand in US markets for bikes. 92% of its
motorcycle customers intend to repurchase.
Customers value quality parts. Harley-Davidson have a good
brand value among its customers and in U.S people, so they can
exploit this situation, by teaching and educating the customers
what is considered as a quality product and what are the things
they are using for manufacturing their bikes. This will increase
the customer loyalty to this brand and this will help in a market
penetration.
THREAT
Harley’s ongoing capacity restraints caused a shortage supply
and a loss in domestic market share in recent years.
High rise in the Oil prices. Harley-Davidson vehicles are heavy
weight motorcycles and this is one of the major threats they are
facing, because their vehicles are more oil consuming.
Harley’s average buying age is 42 years old and increasing.
The European Union’s motorcycles noise standards are more
stringent than those of Environmental Protection Agencies in the
U.S and increased environmental stand
Some competitors of Harley Davidson have larger financial and
marketing resources and they are more diversified
Environmental protection laws
Buell division needs to continue to produce a quality motorcycle
under Harley’s brand name.
EFE MATRIX
Key external factors Weight RatingWeighted
scoreOPPORTUNITIES
The European demand for Harley Davidson is the highest in the international market and represents the single largest motorcycle market in the world 0.15 4 0.6
The international heavy weight market is growing and is now larger than the U. S. heavyweight market 0.15 4 0.6
Women and younger riders are increasing becoming interested in bikes 0.1 3 0.3Market share increasing in Europe & Asia for last 2 yrs 0.1 3 0.3Increasing demand in US markets for bikes, 92% of its motorcycle customers intend to repurchase 0.1 2 0.2
Customers value quality parts 0.025 1 0.025THREAT
Harleys ongoing capacity restraints caused a shortage supply and a loss in domestic market share in recent yrs 0.15 2 0.3
High rise in the Oil prices 0.14 2 0.28
Harleys average buying age is 42 years old and increasing 0.1 2 0.2
The European Union’s motorcycles noise standards are more stringent than those of Environmental Protection Agencies in the U.S and increased environmental stand 0.025 2 0.05
Some competitors of Harley Davidson have larger financial and marketing resources and they are more diversified 0.025 2 0.05
Environmental protection laws 0.025 2 0.05
Buell division needs to continue to produce a quality motorcycle under Harley’s brand name 0.05 3 0.15
TOTAL 1.14 3.105
Competitive Profile Matrix
CPM HARLEY HONDA YAMAHA
CRITICAL SUCCESS FACTORS Weight Rating
Weighted Score Rating
Weighted Score Rating
Weighted Score
Advertising 0.15 4 0.6 3 0.45 4 0.6
Product Quality 0.15 4 0.6 3 0.45 3 0.45
Price Competitiveness 0.1 1 0.1 3 0.3 3 0.3
Management 0.025 3 0.075 4 0.1 2 0.05
Financial Position 0.1 2 0.2 4 0.4 3 0.3
Customer Loyalty 0.15 4 0.6 3 0.45 3 0.45
Global Expansion 0.025 2 0.05 4 0.1 3 0.075
Market Share 0.3 2 0.6 4 1.2 3 0.9
TOTAL 1 2.83 3.45 3.13
INTERNAL ANALYSIS
FINANCIAL RATIOS
LIQUIDITY RATIOS
Current Ratio = Current Assets / Current Liabilities
= 2729/956
= 2.85
Quick Ratio = (Current Assets – Inventory) / Current Liabilities
= (2729-208)/956
= 2521/956 = 2.63
LEVERAGE RATIOS
Debt to Total Assets Ratio = Total Debt / Total Assets
=994/4923
=0.20
Debt to Equity Ratio = Total debt / Total stock holders equity
=994/2958 =0.34
Long Term Debt Equity Ratio = Long term Debt / Total stock holders
equity
=670/2958
= 0.23
Times Interest Earned Ratio = Profits before interests and taxes /
Total Interest charges
=1149/0
ACTIVITY RATIOS
Inventory Turnover = Sales / Inventory of finished goods
=4624/208
=22.23
Fixed Assets Turnover = Sales / Fixed Assets
=4624/2194
=2.10
Total Assets Turnover = Sales / Total Assets
=4624/4923 =0.93
Accounts Receivables Turnover = Annual Credit Sales / Accounts
receivable
=4624/1114
=4.15
Average Collection Period = Accounts Receivables / (Total credit
sales/365)
=1114/(4624/365)
=1114/12.66
=87.99
PROFITABILITY RATIOS
Gross Profit Margin = (Sales – COGS) / Sales
=(4624-3070)/4624
=1554/4624=0.34
Operating Profit Margin = EBIT / Sales
=1149/4624
=0.25
Net Profit Margin = Net Income / Sales
=761/4624
= 0.16
Return on Total Assets (ROA) = Net Income / Total Assets
= 761 / 4923
= 0.15
Return on Equity (ROE) = Net income / Total Stock holders
equity = 761 / 2958
= 0.26
Earnings Per share (EPS) = Net income / Total stock holders
equity = 761 / 302
= 2.519
Price Earning ratio =Market price per share/Earning
per share
=39.11/2.519
=15.526
Growth ratio
Sales =Annual % growth in total sales
= (4624-4091)*100/4091=13.029
Net income =Annual % growth in profits
=(760-580)*100/580=31.034
Financial strength of the company is good, but there is a
decline in the sales in 2003 as compared to the previous year
2002. Net income has increased.
FINANCIAL ANALYSIS 2003 2002 2001
LIQUIDITY RATIOS
Current Ratio 2.86 2.09 2.33
Quick Ratio 2.64 1.87 2.07
The current ratio is high, its bad for the company
LEVERAGE RATIO
Debt to Total Assets 0.20 0.20 0.19Debt Equity ratio 0.34 0.34 0.34
Long term DE ratio 0.23 0.17 0.22
Less Debt, good. What percentage of total funds is provided by creditors? Although creditors tend to prefer a lower ratio, management may prefer to lever operations, producing a higher ratio. A low ratio, on the other hand, indicates a wider safety cushion (i.e., creditors feel the owner's funds can help absorb possible losses of income and capital).
ACTIVITY RATIO
Inventory Turnover 18.79 19.72 19.81Fixed Asset Turnover 1.78 2.40 2.47
Total Asset Turnover 0.79 1.11 1.15It’s almost flat over the period, but the turnover ratio is declining that’s not good for a company.
PROFITABILITY RATIO
Gross Profit margin 0.21 0.35 0.34Operating profit margin 0.29 0.21 0.18Net Profit Margin 0.19 0.13 0.12ROA 0.15 0.15 0.14ROE 0.26 0.26 0.25
EPS 2.52 1.92 1.45Gross profit margin is declining that’s not good for the company, but net profit is increasing. Return.
GROWTH RATIO
Sales -9.27 19.90 Net Income 31.14 32.56
EPS 31.16 32.62 The sales has been declined in a huge percentage as compared to the previous year (2002). The other two are almost steady.
YEAR BY YEAR FINANCIAL ANALYSIS OF Harley-Davidson
STRENGTHS
Net income of 2003 was $760mn; it’s more than 30% as
compared to the previous year 2002.
The standard and performance segments of Harley Davidson
make up 70% of the European heavy weight motorcycle market
Harley-Davidson operates in two segments: Harley-Davidson
motorcycles & related products and HDFS (Harley-Davidson
Financial Services).
Harley-Davidson is the only major American heavyweight
motorcycle manufacturer.
Strong brand name, one of the main things which are required
for all companies in this industry.
The HOG (Harley Owners Group), which have a 7, 50,000
members world wide, is the industry’s largest company
sponsored motorcycle enthusiast organization.
Buell Riders Adventure Group (BRAG) was also formed recent
Customization of the bikes, this is Harley-Davidson’s major
revenue maker.
Harley-Davidson has a good marketing division and it’s divided
as dealer promotions, customer events, magazine and direct-
mail advertising, and public relations.
WEAKNESS
High price, Harley-Davidson bikes are the costly bikes in this
category. They just started making some bikes in the low cost
category.
Harley-Davidson has problems in gaining more market share in
some European countries (That’s one of the main markets for
Heavyweight motorcycles outside U.S).
They didn’t yet start its sales in India, one of the biggest
markets.
Required production is not met, analyzing the future of
Heavyweight motorcycle market
IFE MATRIX
KEY EXTERNAL FACTORS WEIGHT RATINGWEIGHTED
SCORESTRENGTHS
Net income of 2003 was $760mn, its more than 30% as compared to the previous year 2002 0.15 3 0.45
The standard and performance segments of Harley Davidson make up 70% of the European heavy weight motorcycle market 0.09 3 0.27Harley-Davidson operates in two segments: Harley-Davidson motorcycles & related products and HDFS (Harley-Davidson Financial Services) 0.025 4 0.1Harley-Davidson is the only major American heavyweight motorcycle manufacturer 0.1 4 0.4
Strong brand name 0.15 4 0.6
The HOG (Harley Owners Group), which have a 7,50,000 members world wide is the industry’s largest company sponsored motorcycle enthusiast organization 0.05 4 0.2
Buell Riders Adventure Group (BRAG) was also formed recent 0.025 4 0.1
Customization of the bikes, this is Harley-Davidson’s major revenue maker 0.025 4 0.1
Harley-Davidson have a good marketing division and its divided as dealer promotions, customer events, magazine and direct-mail advertising, and public relations 0.025 4 0.1
WEAKNESS
High price 0.15 2 0.3
Harley-Davidson has problems in gaining more market share in some European countries (That’s one of the main markets for Heavyweight motorcycles outside U.S). 0.06 1 0.06
They didn’t yet start its sales in India, one of the biggest markets 0.1 1 0.1
Required production is not met, analyzing the future of Heavyweight motorcycle 0.05 1 0.05
market TOTAL 1 2.83
SWOT matrix
Opportunity ThreatS
tren
gth
SO Strategy: ST Strategy
SALE OF HARLEY DAVIDSON IN EUROPEAN MARKET IS OF 70% AND THEY CAN IMPROVE THIS BY INTRODUCING MORE PRODUCTS INTO THE MARKET AND THROUGH ADVT AND ALL. BECAUSE THIS MARKET IS GROWING HIGHLY.
EXPAND PRODUCTION TO EUROPE INCREASE STRONG BRAND NAME
EXPAND PRODUCTION TO ASIAINCREASE MARKET TO YOUNGER CUSTOMER
HARLEY DAVIDSON CAN MAKE USE OF ITS GOOD BRAND NAME, BECAUSE NOW A DAY PEOPLE ARE MORE CONCENTRATING ON QUALITY PRODUCTS
Wea
knes
s
WO Strategy WT Strategy
IMPROVE EMPLOYEE RELATIONSHIP
GRAND STRATEGY MATRIX
Buell Motorcycles a division of Harley-Davidson. This was purchased
by Harley-Davidson; this division still uses Harley-Davidson to
improve its sales.
STRATEGY: MARKET DEVELOPMENT, MARKET PENETRATION,
PRODUCT DEVELOPMENT, HORIZONTAL INTEGRATION,
DIVESTITURE, LIQUIDATION.
SPACE Matrix
Financial Strength (FS)
Environmental Stability
(ES)
Return on Investment 2 Technological changes -2
Leverage 3 Rate of Inflation -3
Liquidity 4 Demand variability -6
Working Capital
2 Price range of competing
products -2
Cash Flow
5 Barriers to entry into
market -6
Inventory Turnover 3 Competitive pressure -4
Earnings per Share 3 Ease of exit from market -3
Price Earnings Ratio 2 Price elasticity of demand -2
Risk involved in business -2
Total 24 Total -30
Competitive Advantage (CA) Industry Strength (IS)
Market share -1 Growth potential 3
Product quality -1 Financial stability 3
Product life cycle -3 Technological know how 5
Customer Loyalty -1 Resource utilization 4
Competition's capacity utilization -4 Ease of entry into market 6
Technological know-how
-1 Productivity, capacity
utilization 4
Control over suppliers & distributors -2
Total -13 Total 25
Average value for FS = 3
Average value for CA = -1.85
Average value for IS = 4.17
Average value for ES = -3.33
Point on X axis = (-1.85+4.17)/2 = 1.16
Point on Y axis = (3-3.33)/2 = -0.165
Strategies:
STRATEGY: BACKWARD INTEGRATION, FORWARD
INTEGRATION, HORIZONTAL INTEGRATION, MARKET
PENETRATION, MARKET DEVELOPMENT, PRODUCT
DEVELOPMENT.
I.E MATRIX
Harley-Davidson U.S MARKET SHARE: 49%
Harley-Davidson EUROPEAN MARKET SHARE: 07%
Harley-Davidson ASIAN MARKET SHARE: 22%
STRATEGY: BACKWARD INTEGRATION, FORWARD
INTEGRATION, HORIZONTAL INTEGRATION, MARKET
PENETRATION, MARKET DEVELOPMENT, PRODUCT
DEVELOPMENT
BCG MATRIX
Harley-Davidson RELATIVE MARKET SHARE: 48%
GROWTH RATE: 13.029
STRATEGY: MARKET PENETRATION, MARKET DEVELOPMENT,
PRODUCT DEVELOPMENT, DIVESTITURE.
QSPM
J.V EUROPE J.V ASIASTRENGTH WEIGHT AS TAS AS TAS
Net income of 2003 was $760mn, its more than 30% as compared to the previous year 2002 0.075 3 0.225 3 0.225
The standard and performance segments of Harley Davidson make up 70% of the European heavy weight motorcycle market 0.045 3 0.135 2 0.09Harley-Davidson operates in two segments: Harley-Davidson motorcycles & related products and HDFS (Harley-Davidson Financial Services) 0.0125 4 0.05 3 0.0375
Harley-Davidson is the only major American heavyweight motorcycle manufacturer 0.05 4 0.2 4 0.2
Strong brand name 0.075 4 0.3 2 0.15The HOG (Harley Owners Group), which have a 7,50,000 members world wide is the industry’s largest company sponsored motorcycle enthusiast organization 0.025 2 0.05 3 0.075Buell Riders Adventure Group (BRAG) was also formed recent 0.0125 2 0.025 4 0.05
Customization of the bikes, this is Harley-Davidson’s major revenue maker 0.0125 3 0.0375 3 0.0375
Harley-Davidson have a good marketing division and its divided as dealer promotions, customer events, magazine and direct-mail advertising, and public relations 0.0125 2 0.025 2 0.025WEAKNESS 0
High price 0.075 2 0.15 2 0.15
Harley-Davidson has problems in gaining market share in some European countries (one of the main markets for Heavyweight motorcycles outside U.S). 0.03 3 0.09 3 0.09
They didn’t yet start its sales in India, one of the biggest markets 0.05 3 0.15 3 0.15
Required production is not met, analyzing the future of Heavyweight motorcycle market 0.025 4 0.1 4 0.1OPPORTUNITIES 0
The European demand for Harley Davidson is the highest in the international market and represents the single largest motorcycle market in the world 0.075 4 0.3 2 0.15
The international heavy weight market is growing and is now larger than the U. S. heavyweight market 0.075 4 0.3 3 0.225
Women and younger riders are increasing becoming interested in bikes 0.05 3 0.15 4 0.2
Market share increasing in Europe and Asia for the last two years 0.025 3 0.075 4 0.1
Increasing demand in US markets for bikes 0.1 2 0.2 3 0.3
Customers value quality parts 0.0125 1 0.0125 2 0.025THREAT
Harleys ongoing capacity restraints caused a shortage supply and a loss in domestic market share in recent years 0.075 4 0.3 3 0.225Harleys average buying age is 42 years old and increasing 0.025 3 0.075 2 0.05The European Union’s motorcycles noise standards are more stringent than those of Environmental Protection Agencies in the U.S and increased environmental stand 0.0125 3 0.0375 2 0.025Some competitors of Harley Davidson have larger financial and marketing resources and they are more diversified 0.0125 2 0.025 3 0.0375
Environmental protection laws 0.0125 4 0.05 2 0.025
Buell division needs to continue to produce a quality motorcycle under Harley’s brand name 0.025 1 0.025 2 0.05 1 3.0875 2.7925
STRATEGY RECOMMENDATION & IMPLEMENTATION:
MARKET PENETRATION
Get some more market share from the existing market, like U.S,
U.K, and Japan etc through more marketing techniques like
advertising. Harley-Davidson has a good brand name so it’s easy
for them to eat up the competitor market share if they can
provide some more customer benefit.
Competition is high in this segment mostly in U.S so market
penetration can be a good choice for the company.
Expand the HOG (Harley Owners Group) to Asian countries, if the
company can provide the customer satisfaction that they are
providing to the U.S customers to the Asian customers they can
increase the sales.
PRODUCT DEVELOPMENT
Younger generation and female are now coming to this segment
so expand the motor cycle segments to younger generation and
females.
In Europe they can increase or expand the Buell’s market share
by introducing new motorcycles.
New hybrid bikes, low cost street bikes, Energy efficient bikes for
the developing countries and new environmental friendly bikes
will help Harley-Davidson to get more market share.
MARKET DEVELOPMENT
Harley-Davidson can bring in their vehicle to Asian countries like
India and China, because these countries have a high population
and the market potential is also high.
The cost to bring in the old vehicles (old product) to India is so
much difficult because there are so much environmental laws are
there which won’t allow that type of vehicles to come to India,
and its difficult that taxes and levis are high in India so starting
new plant in India can solve this problem. Negotiations with the
Government can solve these problems.
DIVERSIFICATION
Bring in new vehicles to new markets like India and China is a
good choice, but it’s too costly.
Bringing new types of recreational vehicles is a best choice.
RECOMMENDATION
Expand European and Asian market.
Increase the sales of Buell sport bike and Harley-Davidson to
younger customers and females.
Horizontal diversification: acquires or develops new products that
could appeal to its current customer groups even though those
new products may be technologically unrelated to the existing
product lines.
Concentric diversification: Bring in new recreational vehicles.
EVALUATION
REVIEW UNDERLYING BASES OF STRATEGY
Once again prepare all the internal and external analysis (eg:
EFE & IFE)
Compare the already prepared analysis with the one which will
be prepared after the new strategy implementation.
MEASURING ORGANIZATION PREFERENCES
Analyze all financial ratios (current and the future).
If any advantage, then implement the new strategy, otherwise
continue with the present one.
Reference: Strategic Management Concepts and Cases; Fred R. David, 10th & 12th Edition. www.wikianswers.com www.yahoo.com (yahoo finance) www.harley-davidson.com www.google.com http://www.fool.com/investing/value/2006/08/02/calculating-return-on-
assets.aspx http://www.va-interactive.com/inbusiness/editorial/finance/ibt/ratio_analysis.html