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Dealerships and distributors serving 32 European Countries. 323 of which were combined H. D. and Buell dealers. A new dealership coming to South Africa in 2008. Threat of Substitutes Medium. Honda is a big competitor of motorcycles from small “crotch rockets” and large cruising and touring bikes. External Environment (John Taylor) B. Societal Environment STEEP Category Economic ISSUE Rising Fuel prices Pending recession Double digit growth in international dealer network during 2007 Planned opening of dealership in S.
Africa Addition of Buell motorcycles to H. D. dealerships Threat/OpportunityThreat Threat Opportunity Opportunity Opportunity Ranking 1 2 4 3 5 Technological Creation of www. harley-davidson. com in 2001 Just-in-time Inventory Opportunity Strength 2 1 Political-Legal U. S. and Foreign environment control (EPA) National Traffic and Motor Vehicle Safety Admin. (NHTSA) Threat Threat Strength 1 2 1 Sociocultural Rider Training and Safety EFAS Table (John Taylor) External Factors Opportunities Double digit growth in international market New dealership in S. Africa Addition of Buell motorcycle line E-commerce, online catalog Threats Rising Fuel Prices Pending recession U.S and Foreign environment controls (EPA) 0. 3 0. 2 0. 03 1 2 2 0. 03 0. 4 0. 06 Steady sharp rise in fuel prices since 9/11 Consumers may keep aging motorcycles or wait to purchase Stricter Government environmental controls add to cost of production.
0. 1 0. 1 0. 2 0. 03 4 3 5 1 0. 4 0. 3 1 0. 03 Growth doubled in international dealer network for 2007 New dealership being built in South Africa in 2008 Soaring Profits from adding the Buell line to H. D. dealers www. harley-davidson. com developed in 2001 WEIGHT RATING WEIGHTED SCORE COMMENTS National Traffic and Motor Vehicle Safety Admin Total ScoresStricter Government environmental controls add to cost of production. 0. 03 1 2 0. 06 2. 28 4. Internal Environment (Nick Schnabel) A. Corporate Structure · Business segments:
• Motorcycles and related products and Financial Services.
• The decision-making procedure within Harley-Davidson is decentralized according to which department is the most appropriate to address certain issues or to make the decisions. . B. Corporate Culture •Harley-Davidson values the deep emotional connection that is created with our customers through our products, services and experiences. Promote stronger bonding between the top management and the nonmanagement workers by implementing the FISH philosophy throughout the entire company.
• Harley-Davidson promotes fairness, financial transparency and accountability to all our shareholders ?C. Corporate Resources ?Marketing (Travis Toborg) Marketing was divided into several different areas that are common for most all companies. These Areas included Dealer promotions, Customer Events, Magazines, Direct Mail advertising, Public Relations, Cooperative Programs with Harley/Buell, and TV commercials.You will also see Harley promotions at several popular sporting evens such as racing and even UFC. ?Finance In 1985 Harley-Davidson was 4 hours from shutting there doors. Citicorp, Harleys main lender denied lending money in 1985 but with only 4 hours remaining to find a lending company, Harley made a deal with Heller Financial and managed to save the company. At this current time it is now funded by HDFS (Harley-Davidson Financial Services). Which is a lending company for Harley-Davidson motorcycles among several other helping factors. This means the company basically now funds itself. R&D Harley feels that research and development of there custom and touring motorcycles is a large part of the way they compete against the competition. They spent $178. 5 million in 2005, $177. 7 million in 2006, and $185. 5 million in 2007 in areas such as style, purchasing, and manufacturing. ?Operations Harley-Davidson has 684 dealerships in the U. S. and of those 307 were also Buell dealers. Their are 104 Secondary Retail Locations (SRL’s), 68 Alternate Retail Outlets (ARO’s), and 12 Seasonal Retail Outlets (SRO’s). This makes the US the largest supplier in sales of Harley-Davidson motorcycles. 2% of the companies sales came from foreign Operations in Europe/Middle East/Africa at 370 dealers with 323 being combined with Buell, Asia-Pacific 130 Harley dealers with 57 selling both brands, Latin America with 31 dealers none of which also sold Buell’s, and Canada which has 75 dealers, 45 of which sell both brands of motorcycles. Human Resources Approximately 50% of the manufacturing employees of Harley-Davidson’s own Harley’s themselves and buy from dealerships so they have first hand experience with what they are contributing too as a work force. There are roughly 9,000 employees of Harley-DavidsonInformation Systems None V. Analysis of Strategic Factors (John Lerch)
• A. Situational Analysis (SWOT)
• Acquiring Buell
• Financial Self Reliability
• Baby Boomer Era Ending
• Competition with Several Japanese Companies •Opportunities •Addition of Buell Motorcycle Line •Double Digit Growth in International Market •Threats •Pending Recession •Rising Fuel Prices V. Analysis of Strategic Factors (John Lerch) B. Review of Current Mission and Objectives 1. Harley Davidson’s Mission and Objectives focus on the customers and the acquisition of Buell falls in line with the mission. . They should continue on with current mission and objectives and seek ways to continue capitalizing on the international market. V. SFAS Matrix (John Lerch) Duration Inter m e d i a t e Weigh Strategic Factors t Rating Weighte d Sc or e Short Long Comments S4 Acquiring Buell S1 Self Reliable Financially 0. 2 0. 15 5 5 1 0. 75 X X X Drive sales up with more options Could possibly end but lenders would step in W4 Seasons W1 Baby Boomer Era Ending W2 Competition with several Japanese Companies 0. 1 0. 15 0. 15 4 2 2 0. 4 0. 3 0. 3 X X X Create sales spikes and drops Drove sales X Cost more to own and repairO3 Addition of Buell Motorcycle Line O2 Double digit growth in international market 0. 2 0. 1 5 4 1 0. 4 X X X Soaring Profits from adding the Buell line to H. D. dealers Growth doubled in international dealer network for 2007 T2 Pending recession T1 Rising Fuel Prices 0. 2 0. 3 2 1 0. 4 0. 03 X X X Consumers may keep aging motorcycles or wait to purchase Steady sharp rise in fuel prices since 9/11 VI. Strategic Alternatives and Recommended Strategy A. Strategic Alternatives have on the company then react accordingly. a. Pros: Acknowledgment of areas that are weak and need improvement.The profit strategy would not beneficial it only masks the issues instead of confronting them. b. Cons: Strong Competition from competitors that are larger, established, and more diversified. (Shavera Leveille) 1. Stability Strategy: Pause/Proceed with caution. Analyze the effects the recession will 2. Growth Strategy: Horizontal growth strategy; concentric diversification, strategic alliance, and joint ventures. Target new market segments by developing products and services for females and younger bikers both domestically and internationally. a. Pros: New markets would help increase customer base, brand loyalty, and profitability. . Cons: The new market segments may not be able to afford the products and services offered. Strategic alliances and joint ventures may result in loss of control over operations, conflicts, and higher risks. 3. Retrenchment Strategy: Turnaround strategy; close down unprofitable foreign plants and consolidate operations. a. Pros: Allows for concentration on business segments and plants that are profitable. Prevents further losses. b. Cons: Hinders growth B. Recommended Strategy Recommend alternative #2 which is growth for Harley-Davidson. The current customers are mainly comprised of the Baby Boomers. Harley-Davidson Inc. ay benefit from recruiting younger customers to possibly build lifetime customer loyalty that can be passed down to younger generations. Women are also a great market segment to target because research shows that the number of female riders has risen significantly over the past few years. Concentric diversification, strategic alliances and joint ventures enable entry into foreign markets, knowledge of local conditions, sharing of costs, resources, and assets. Although, the company is facing a recession the costs of Harley-Davidson products and services should not be reduced, but rather competitively priced so that quality is not sacrificed