harley_davidson ganago ppt

8/8/2019 Harley_Davidson Ganago Ppt

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Harley-Davidson


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SITUATIONANALYSIS

ArthurandWalterDavidsonandWilliamHarveyformtheHarleyDavidsonCompanyin1903.

Firstmajor

innovation

was

the

V

Twin

Engine

in

1909

Becomestheworldslargestmotorcyclecompanyin1918producing28000motorcycles.

Image

and

lifestyle

marketing

in

late

1930s

from

previous

campaigns

of

utilitarianvehicles.

AmericanmakeandmanufactureremainedoneofitsgreatestUSPs

JapanesemotorcyclemanufacturersledbyHondaenterUSmarketin1959

OtherJapanese

firms

included

Kawasaki,

Yamaha

and

Suzuki

and

they

targetedoldermalesandyoungerwomen.

In1965,1outofeverytwomotorcyclessoldinUSAwasaHonda.


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SITUATIONANALYSIS

HarleyDavidsongoespublicin1965toraisecapitalandexpandproduction.

Acquiredin

afriendly

takeover

by

AMF

Productionwasincreasedsubsequentlybutqualitysuffered.

BrandnewHarleyssittingonthedealershipfloorhadtohavecardboardputdownbeneaththemtosopuptheleakingoil.

HondaintroducestheGoldwing,a1000ccmotorcycleandisfollowedbyKawasaki.

HarleyDavidsonsshareinitstraditionalstrongholdofheavyweightbikesreduces

Between1970and1980HarleyDavidsonssharedeclinesby80%.


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SITUATIONANALYSIS

In1980,thereisabuybackofcompanysharesusingdebt.

Inthe1980sbenchmarkingagainstHondabegins.

HarleyDavidson

adopts

some

Japanese

managerial

styles

and

did

three

mainthings:

QualityCircles

Materialsas

Needed

(MAN)

StatisticalOperatorControl(SOC)

HarleyDavidsonseekstariffprotectionfromthegovernmentin1983toprotectitfromcompetition.

Changesinoperationsleadstoa50%productivityimprovementand80%increaseininternationalrevenues.

AsksUSGovernmenttolift5yeartariffprotectiononeyearinadvance

in1987.

In1989thefirmgoespublicagain


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EMERGENCEOFHARLEYDAVIDSON

OWNERSGROUP

Formedin1983toactivelyinvolveownersofthebikes

Industryslargest

motorcycle

enthusiast

organization

with900000membersattheendof2004.

InterestamongwomanriderswasgeneratedbyThe

Ladiesof

Harley

TeerlinkresignsasCEOin1997andissucceededbyJeffreyBleustein.

Revenuesgrown

from

$1.5

Billion

in

1996

to

$5Billion

in2004.

NetIncomegrewfrom$143Millionto$890Millionin

thesame

period.


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PREPARINGFORTHENEXTCENTURY

MedianageofHarleycustomerswas35yearsin1987and47yearsin2004.

Thiswas

because

most

of

the

loyal

customers

were

baby

boomers.

HarleyDavidsonacquiredBuellcompletelyin1998

Thesewere

cheaper

racing

bikes

compared

to

Harleys

and

cateredtoyoungerbikers.

ColdDayinHell

IntroducesThe

V

Rod,

a110

horsepower

motorbike

with

awater

cooledengine.


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PREPARINGFORTHENEXTCENTURY

Numberofbasicrulesgoverningthefunctions

Thebenchmarkforthevariousoperationneededtobechanged

Thelatest

production

techniques

needed

to

be

incorporated

Betterinventorymanagement

FocusofR&Dneededtobeincreased

TheRiders

Edge

and

Rental

Program

In1999Harleyoffersarentalprogramtohookcustomers

Surveysshowedthat32%ofcustomersrentingaHarleybikeboughtoneafterwardsand37%plannedtobuywithinayear.

RidersEdgeprogramwasamotorcycleridinglessonfor4daysandapproximately70%oftheparticipantsboughtabikewithin18

months.


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BENCHMARKINGHONDA

Parameter Honda HarleyDavidson

Productionline Streamlinedandorganized

productionlines

Clutteredandunorganized

Structure Minimizedpaperwork Hierarchical

and

bureaucratic

InventoryControl JustinTimesystemofinventory

controlandbikesbuiltorder

2million$computerized

inventorysystem

Management

Bettermanagement Quantity

targets

Multiple

qualitychecks

Measurementoferrorsin

production

Quality

95%passed

quality

inspection 50%

passed

quality

inspection

Productivity 30%higher Low

Valueadded

per

employee

23times

Suzuki

and

Yamaha Low


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BENCHMARKINGHONDA

Initiative Description Objective HRInterventions

Employee

InvolvementWorker

participationin

qualitycircles

Employee

Empowerment

JobEnrichment

Flatorganization

structure

Jobdescriptionsand

responsibilities

MANprogram

Just

in

Time

InventoryControl

practice

Increaseliquidity

Highlightsquality

problems

SOC

Trainingemployees

todetect,trackand

correctquality

problems

Minimize

productionsdefects

Incentivizeworkers

toimplement

initiatives

Payfor

performanceEmployeeincentive

programs


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BENCHMARKINGHONDA

JobRationalization Eliminatedauditor

positions(Sr.V.P.)

Maximizevalue

addedper

employee

Teambasedwork

culture

LeadershipInstitute Homogenousacross

hierarchiesand

voluntaryin

nature

Transformationtoa

learning

organization

Payfor

performance

Communicatingfairnessand

uniformity

Supplementary

Training

Interrelations

betweenproducts,

sales,profits

Nontechnical

explanationsof

financialprocesses

VisionMission

alignment

Visioncascaded

downto

all

levels

to

improvelineof

sightandownership


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Typicalmanagementpracticesincluded:

Corporatemanagementsfocusmostlyon

shortterm

returns

Lackofemployeeempowerment

Highinventoriesofpartsleadingtolow

liquidity

&

reduced

productivity Beliefinquickfixesforproblems

Highbreakevenpointthatleftthe

companyvulnerabletounpredictablemarket

fluctuations

Managementthatwokeuptoolateto

thethreatofforeigncompetitionbecauseof

the"itcan'thappenhere"syndrome

ContinuousImprovement

EagelmarkFinancialServices

ManagementInvolvement

in

Community

Development

CatalystforAction&Ideas

Listening

&

providing

hospitality CrisisIntervention(ThroughHOGsFlyn

Rideprogram)

ChangeinPeopleProcesseswithinthefirm

Changesintheperformancesystems

Empoweringemployees

MANAGEMENTTHEN

MANAGEMENT

NOW


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MARKETINGMANAGEMENT


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MoreEmphasis

On

MANUFACTURING


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S

W

OT

A

NA

L

Y

SI

S


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IMPACTSONTHEORGANIZATION

LOW

LOW HIGH

HIGH


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AMBIGUITYINTHEENVIRONMENT

FORHD

TheentryofJapaneselowcostproducers

TheLoss

of

the

market

share

Thesizeofthemarketpiehadincreased

AMFtake

over

Qualitystandardsandreliability

comparatively

lower Productivitywaslow


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NUMBEROFBASICRULES

GOVERNINGTHEFUNCTIONS

Thebenchmarkforthevariousoperation

neededto

be

changed

Thelatestproductiontechniquesneededtobeincorporated

Betterinventorymanagement

FocusofR&Dneededtobeincreased


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FLEXIBILITYOFOPERATION

DEPENDINGONSITUATIONS

Continuousimprovement

Moveto

ateam

based

approach

eg:

create

demandteam,productsupportteam

Complimentarychanges:

anew

reward

and

incentivesystem

AMOUNT OF UNCERTAINTY


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AMOUNTOFUNCERTAINTY

REMOVED

FROMTHE

ENVIRONMENT

EmergenceofHOG

Aloyal

customer

base

Alsoameanstogenerateinterestinthenew

marketsegments

Technologicalinnovations

Buell

Acquisition Productdiversification


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FUTUREPROSPECTS

ExpandalongtheValueChain

Grownew

products

&

services

Usenewdistributionchannels

Enternew

geographies

Addressnewcustomersegments(Modifythe

proven

product) Moveintoawhitespacewithanewbusiness

builtaroundthecapability


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CRITERIA

MarketAdvantage:IncreaseinthemarketsizeforHD

Harleyissuccessfulinselling400,000motorcyclesby2007

TheParentingAdvantage:HDbecomesthemostpreferredmotorcycleintheUS&otherpartsoftheworld

Annualearningsgrowthratesisinthemidteens

Feasibility:Harleyisabletoexpanditscustomerbase

Harleyattractsyoungerriders&womenasitscustomerbase

Accountability&

Flexibility:

Harley

is

able

to

sustain

the

changes&developnewstrategiesonanongoingbasis

UnitswithinHarley


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MARKETINGSTRATEGIES

OF

COMPETITORS

Honda

Intherecenttimesthefocushasbeenonexpandingtheirproduct

portfolio Venturedintotheoffroadsegmentaswell

Focusonthecustomization

Strategy

:

high

value

at

low

prices BMWmotorcylces

Openhouse,openthrottle

Heavyspendingontheadvertising.Havestartedfocusingononline

advertising

Advertisinginlifestyleandmassappealmagazinestofocusoncycleenthusiastpubs

Alaunch

of

record

5new

models

this

year

Guerrilla&eventmarketing

CUSTOMER DISSATISFACTION


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CUSTOMERDISSATISFACTION

ATHARLEY


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TECHNOLOGICALINNOVATIONS

Allthecompetitorsarefocusingonthedevelopmentofnewtechnology

Thefocus

is

on

developing

technology

catering

to

the

various

segments

100candbelow

Powerbikes

Sports&racingtechnologies

Focus

on

after

sales

services

has

also

increased:

aping

the

conceptoftheHOG

GROWTH STRATEGY FOR HARLEY


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GROWTHSTRATEGYFORHARLEY

Existing marketNew market

Marketpenetration

through

product

diversification

Developmentand

promotion

of

life

style

Existing market

Expandproductrange

anddeveloplowcost

productsand

capitalizeonthe

brandname

Movementtoglobal

marketsin

EuropeNew market


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FUTUREPROSPECTSFORHD

InternationalheavyweightmarketisgrowingandissignificantlylargerthantheU.S.heavyweightmarket

Europehas

the

largest

motorcycle

industry

Targetheavyweightandsportsmotorcycles(themarketisfourtimestheUSmarket)

BuildamotorcycleplantintheEuropeanbyusingstrategyallianceorjointventure

Reducetransportationcost

Increasecompanysinternationalexperience


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FUTUREPROSPECTSFORHD

TheimagebuiltinUSmightnotbesuitabletotheEuropemarket

Strategyalliances

is

suitable

in

this

case

since

the

company

cancreatevaluefromtransferringcompetenciesorsharing

resourcesbetweendiversifiedbusinessesinordertorealize

economiesof

scope.

Theyshoulddoresearchonthemarkets:learnfromtheinitialdebaclesintheEuropemarket


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ADAPTIVEORIENTATION

Hyperturbulent

RenewingTransformational Reactive

Satisfying

(HarleyDavidson)

SluggishThermostat

EnvironmentalStability

Stable

Adaptive

orientationHigh Low

HOW HD COULD GO ABOUT


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HOWHDCOULDGOABOUT

THECHANGE


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POTENTIALGROWTHPATH

Theabovefuturegrowthstrategycanbedoneoverthecourseofthreeyears

Firstyear

:Target

new

markets

and

develop

infrastructure

there

Secondyear:UtilizethesecondarymarketliketheHOGto

expandits

customer

base

Takeasurvey

UtilizetheHOGcustomerblogasasourceofdata

Thirdyear:Modifyproductsaspertheneedsofthemarket

Developlesspowerfulbikes

ORGANIZATION CULTURE EVOLUTION


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ORGANIZATIONCULTUREEVOLUTION

Need for action

Consensualculture

Hierarchicalculture Rationalculture

Development/

ideologicalculture

Long Term Short Term

DegreeOf

certainty

High

Low

PLANNEDORGANISATIONAL


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O G S O

CHANGESTRATEGIES

Participativeevolution

ForcedEvolutionDictatorial

Transformation

Charismatictransformation

Long Term Short Term

Incremental ChangeStrategies

TransformationalChange Strategies

Collaborativemodes

Coercivemodes

TIME FRAME


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ROLESTOBEPLAYEDBY

THETOP

MANAGEMENT

PractitionerStyle

ApproachtoChange

TeamInterdependenciestoConflictresolution


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PRACTITIONERSTYLE

CHEERLEADER

PATHFINDER

PERSUADER

STABILIZER

ANALYZER

High

E

FFECTIVEN

ESS

Low

High

APPROACHTO

CHANGE


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Thechangeagent

Technological

strategyStructural

strategy

Behavioural

strategy

Change instructure &designs

New Behavior Newrelationships

NewProcesses

Change inproductionmethods

Change inattitudes &values

IMPROVEDPERFORMANCE


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LESSONSFROMHARLEYDAVIDSON

ComplacencyKills

ApoliticalupperhandisatemporaryarrangementApassingphaseatthemost!

Empoweryouremployees

TheyknowalittlemoreabouttheProduct&managementthanyougivethemcreditfor

Strengthenyour

Distribution

Channels

Theyareatthereceivingend&knowyourcustomersbest!

Movingtointernationalmarketsdoesnotmakeyouanylesspatriotic

Ofcoursethebrandingcampaignswouldhavetobesignificantlydifferent

PerseverancePays!

Ifnotforthis,Harleywouldneverhavecelebratedits100thBirthday

THANK YOU


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harley_davidson ganago ppt

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