Harley-Davidson, Inc. Sample Essay

The Harley-Davidson instance presents a alone illustration of a alone company that. due to their singular client trueness. was able to travel from about belly-up to successfully deriving a significant part of the market in a niche merchandise.

The company was able to derive market portion and net income by well reconstituting their concern program. Harley-Davidson changed from a traditional big batch fabrication doctrine to just-in-time scheme. They began affecting employees in job resolution and they redeveloped and focused their selling scheme to a smaller niche market.

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In 1903. William Harley-Davidson. Arthur Davidson. Williams Davidson. and Walter Davidson started Harley-Davidson in a 10?15 shed in their backyard in Milwaukee. Wisconsin. Production started with three bikes in 1903 and increased to 8 in 1908. In 1969. AMF Incorporated acquired Harley-Davidson Motor Company and expanded capacity from 15. 000 to 40. 000 bikes.

Harley-Davidson. Incorporated was formed in 1981. when it was purchased from AMF Incorporated in a direction buyout. In 1986. Harley-Davidson. Incorporated became a publically held company.

The new direction installed a just-in-time stock list system to cut down stock lists and better entire quality. With a new quality focus Harley-Davidson began to put to a great extent in research and development. In one twelvemonth the new Harley-Davidson direction reduced the break-even point by 18. 000 bikes. Management’s focal point on efficiency in production and betterments in quality resulted in increased demand and a production capacity of 100. 000 bikes in 1995.

Harley-Davidson operates in two sections. Motorcycles and Related Products. and transit and vehicles section. Entire net gross revenues for the first nine months of 95 were $ 1. 3 billion. an addition of $ 174. 1 million from the first nine months of 1994. Net gross revenues increased in both the Motorcycles section and the Transportation Vehicles section. 1

Demand for bikes is go oning to increase at a rate faster than supply for most of the markets in which Harley-Davidson competes. Partss and Accessories market should turn at a rate similar to the one-year growing in bike market. From its beginning in a shed at bend of the century. Harley-Davidson has survived the Great Depression. two universe wars and a fabrication revolution to go a company with merchandises so valued and sought after that they are a manner of life for many proprietors.

Key Issues

A. Strengths

* Company is the merely United States bike maker. a definite selling advantage in increasing domestic market portion

* Exceptional name acknowledgment

* Customer trueness

* A established trader web supported by ongoing trader and gross revenues force instruction and preparation

* Efficient fabrication and stock list system

B. Failings

* Limited production capableness

* Three merchandise lines. two of which have worsening profitableness

* Limited theoretical account choice

* Unstable economic system impacting demand on luxury merchandises

* Questionable research and development resources

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C. Opportunities

* Affluent client base in extremum earning old ages

* Company has purchased distribution rights to the Nipponese market and increased possible market portion

* Improved engineering. increasing safety. easiness of usage. and dependability

* Increased client base with adult females and flush babe boomer market

* World sociocultural alteration. where self-realization is increasing

D. Threats

* Intense competition from Nipponese bike shapers

* Increased negative statute law sing bike safety. helmet usage. and noise suspension Torahs that could diminish industry gross revenues

* Aging primary market

* Shriveling place market

Changes

Manufacturing

Harley-Davidson realized that in order to increase production efficiencies. better quality. and run into their production end. their work force needed some extra preparation. A enormous sum of clip. attempt. and resources were expended to develop the fabrication work forces in analytical job work outing techniques. and statistical quality control methods in order to heighten the quality of their bikes and increase efficiencies.

Furthermore. the company adopted just-in-time stock list rules to minimise stock lists of natural stuffs and work in procedure. By organizing close partnership like confederations with a few quality witting providers. Harley has been able to successfully implement the just-in-time stock list system. Harley often holds “in-house” preparation Sessionss and works ratings with its cardinal providers to guarantee that providers portion the same committedness to quality and production efficiencies. Overall. the new system has allowed Harley to respond quicker to technology design alterations. quality betterments. and selling demands within its bing fabrication installations in unison with these alterations. Harley-Davidson initiated plans to increase the degree of employee engagement in the fabrication procedure. These plans created avenues for employees to offer operational suggestions and empowered them to better quality through the usage of “Quality Circles. ” These plans reduced guarantee costs. defects per vehicle. and increased worker productiveness.

In order to better concentrate its resources. Harley-Davidson altered selling schemes concentrating on the premium ace heavyweight bike market. They besides undertook new enterprises to beef up client relationships. better dealer’s gross revenues techniques. and publicise the success of its quality betterment plans.

Harley-Davidson besides created a solid foundation for future growing by procuring capital with a public stock offering.

Human Resources

A company-wide plan to increase the engagement of the employees was instituted. This included a “Quality Circles” plan that allowed employees to joint thoughts. work out jobs. and better efficiency and quality. The alterations as noted above in fabrication besides increased the engagement of the work force. The alterations in fabrication and human resource scheme were credited with a 36 per centum decrease in guarantee costs. a 46 per centum addition in merchandise quality. stock list turnover increased 500 per centum. and the productiveness per employee was up 50 per centum.

Harley Davidson’s civilization fulfills the of import maps that are necessary for an organisation to last. The company lives by their world-wide mission. which states:

Preserve and perpetuate the Harley-Davidson establishment through uninterrupted betterment in the quality of their merchandises and services and accomplishment of their fiscal ends. Supply the general public trade name identified products/services to heighten Harley-Davidson’s image and pull new clients. Prosecute in fabrication or service ventures that can add value ( non merely net income ) to the bike concern.

In order to carry through their mission. Harley is invariably seeking for ways to make things better. They focus on the importance of relationships between direction and other employees. By making so. employees convey a sense of individuality. that in bend. helps them bring forth committedness to the company. Education plans that take topographic point at Harley-Davidson’s larning centre aid employees to go compatible with the company’s civilization. The thought of ne’er being satisfied with the company position leads to uninterrupted betterment and keeps the company consistent with its current aims. schemes. policies and plans.

Traders are considered to be concern spouses and the central office plays an active function in developing plans. funding betterments. and implementing support and direction advisers. Harley has developed a really effectual selling scheme. but it is the duty of fabricating to bring forth high quality and dependable bikes.

Selling

The strategic land that Harley-Davidson re-captured was the ace heavy weight market and so they successfully defended it. This was accomplished by a series of marketing schemes. all focused on the two rules of their merchandise market and their “close to the customer” doctrine. The Harley-Davidson’s vision is as follows: “Harley-Davidson. Incorporated. is an action-oriented. international company-a leader in its committedness to continuously better the quality of profitable relationships with stakeholders ( clients. traders. employees. providers. stockholders. authorities. and society ) . Harley-Davidson believes the key to success is to equilibrate stakeholders’ involvements through the authorization of all employees to concentrate on value-added activities. ”

Harley-Davidson’s mission statement is as follows ; “We fulfill dreams through the experience of motorbiking. by supplying to motorcyclists and to the general populace an spread outing line of bikes and branded merchandises and services in selected market segments” . The mission statement shows that the focal point of the organisation is on client satisfaction and growing. Harley-Davidson’s statement of company doctrine contains a separate list of the values of the organisation. The values listed in this statement are. “Tell the Truth. Be Fair. Keep your Promises. Respect the Individual. Promote Intellectual Curiosity” ( Values ) .

*Company executives sought out client feedback and used it to increase client assurance and satisfaction.

*Instituted a Harley Owners Group ( HOG ) to increase client engagement and trueness.

*Instituted “Superride” plan. Harley-Davidson merchandises set up at bike events and included drives on merchandises to include possible client engagement and engagement.

*Company began “courting” merchandise oriented publications to acquire out the word on Harley-Davidson merchandises.

*Increased gross revenues force by 50 per centum and upgraded preparation of traders in gross revenues techniques.

*The company dropped several theoretical accounts from their line and concentrated on ace heavyweight bikes merely.

When a individual buys a Harley-Davidson bike. they receive a free 1-year rank to the Harley Owners Group ( HOG ) . which was developed in 1983 as a plan to maintain people active with their Harley. HOG besides keeps the company near to its clients. HOG has 295. 000 world-wide members. 900 local chapters and is the largest company-sponsored bike partisan group. They conduct four US national mass meetings. two touring mass meetings and 44 province mass meetings. These mass meetings are the primary promotional tool for Harley-Davidson by bettering client dealingss and are an first-class manner to showcase and show new merchandises.

The consequences of the alteration in marketing scheme resulted in Increased client trueness. From 1986 to 1990 the company saw an addition in net gross revenues and net income by 293 per centum and 777 per centum severally. Entire assets increased by 20 per centum while entire debt decreased by 290 per centum. Net gross revenues and costs of goods sold increased proportionally.

Finance

During the clip of their restructuring. Harley-Davidson refinanced and went public. This move was really successful. raising about $ 25 million more so anticipated. The subsequent purchase of the RV Company may non hold been such a good move since this niche market depends to a great extent on a strong economic system. Harley-Davidson is non able to vie with the foreign rivals in the country of monetary value. Harley-Davidson has developed a scheme of value over monetary value. Harley-Davidson was careful non to transcend demand in production of their bikes. Sometimes. people must wait six to eighteen months for a new bike. By non being able to run into demand. a must-have attitude has developed by many of the clients. and in fact the monetary value for a year-old Harley is 25 % to 30 % higher than a new one.

Harley-Davidson uses the Internet and their web site to supply complete information on the company. the merchandises. and on regional and national events. During 1996. 1995. and 1994. Harley-Davidson had domestic selling. merchandising. and advertisement disbursals of about $ 75. 4 million. $ 71. 5 million. and $ 65. 6 million. severally ( Harley-Davidson Home Page ) .

Selling Scheme

In 1983 Harley-Davidson recognized they needed to implement specific alterations if they were traveling to last in an progressively competitory market. Their alteration focused on two constituents. First. they decided to go more client oriented. Second. they decided that in order to last the competition. they needed to specify their niche and successfully support it.

By 1991 HD had trimmed their merchandise line to 19 merchandises. all with engines over 850cc. considered ace heavyweights. The suggested retail pricing for Harley-Davidson merchandises is premium. with the exclusion of two low-end theoretical accounts. The scheme in dismissing the lower terminal theoretical accounts was to let new users to purchase into the HD name and ascent at a ulterior day of the month.

Brand trueness for Harley-Davidson is emotional for direction and the clients. Harley promotes a mystique visual aspect. individuality. the feeling of siting free. and the pride of having a fable. With Harley. you can populate out your phantasies. every bit good as experience chumminess with fellow rockerss.

Harley-Davidson has been seeking to increase trade name acknowledgment among the non-riding public and supply a broad scope of merchandises by licencing its hallmark. Harley-Davidson presently has licensed the production and sale of a wide scope of points. including vesture. jewellery. little leather goods and legion other merchandises. and is spread outing its licensing activity in the plaything class. Licensing has besides been an effectual agencies of heightening Harley-Davidson’s image.

Aims of Motorcycle and Transportation Divisions

· Double production capacity to 200. 000 bikes yearly by 2003.

· Increase the figure of adult females who purchase motorcycle-riding dress.

· Gain entry in to the public presentation bike industry and increase the gross revenues of the freshly acquired Buell Motorcycle Company.

· Increase international market portion by increasing the figure of foreign traders and bettering the foreign channels of distribution.

· Increase the handiness of recognition and lower the cost of recognition for both the retail client and the Harley Davidson Dealer.

· Improve client satisfaction and better communicating with European stakeholders by increasing trader service competences.

Recommendations for growing in market value. market portion. gross revenues. and gross

Due to income from operations diminishing much more so net gross revenues twelvemonth after twelvemonth Harley-Davidson should see selling the RV concern. Diversification into another concern that is non as dependant on the economic system should be looked into. Extra market portion of defence contracts is a distinguishable possibility.

The bike division demands to spread out into another section of the market. The company controls the ace heavyweight bike market. Diging into the entry-level purchaser market in a larger manner is necessary to take back market portion from the Japanese. The company needs to drop a twosome of their present theoretical accounts and put in the less expensive. smaller motorcycles. This scheme should let them to acquire rid of slow merchandising theoretical accounts and utilize the capital toward R and D of the smaller theoretical accounts. This will minimise the sum of capital taken from the stockholders.

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