This sample paper on Harley Davidson Core Competencies offers a framework of relevant facts based on the recent research in the field. Read the introductory part, body and conclusion of the paper below.
Harley Davidson Inc. 2008: Thriving Through a Recession, Case 16 Mgmt 479A, Week 3 Dropbox 1 November 13, 2011 Synopsis: Harley-Davidson is a 105 year old motorcycle manufacturer. William Harley and Arthur Davidson decided to design and build a motorcycle in 1901. By 1903, they had built and sold three motorcycles and in 1907, the Harley-Davidson Motor Company became incorporated.
The company was acquired by AMF Inc in 1969, but the main focus was on short-term profits which inevitably sent consumers elsewhere and in 1981, Vaughn Beals lead a leveraged buyout to get Harley-Davidson out from under AMF.
Under new management, the focus changed towards production and consumers. The research and development department picked up momentum and during the early 1990’s they decided to invest in Buell Motorcycle Company providing them entry into sport/performance motorcycle market. By 1996, the company decided to gear all of its attention to the motorcycle business.
This meant eliminating the Transportation Vehicles segment which sold for about $105 million. 1997 brought significant changes internally and the launch of new products with the help of an intense procurement expert named Garry Berryman. James L.
Ziemer worked for Harley-Davidson for 38 years before replacing CEO Jeffrey Bluestine when he retired in 2005. The Harley-Davidson name had been finding itself in places like Forbes “Company of the Year” and ranking on Business Week/Interbrand Annual Rankings Top 100 Global brands and on Fortune’s list for “Most Admired Companies.
” By 2008, the recession was playing it toll and raising question about what was in store for the Harley-Davidson Company. Resources: Brand Name: Harley-DavidsonSuppliers International dealershipsFinancial Capital Buell Motorcycle CompanyManufacturing Locations H. O. G. & BRAGE-Commerce
Financial Services: HDFSJane Magazine Raw materialsInnovation: CAD System, MAN System Talented Managers: Ziemer, Berryman, Bluestine Human Resources: skilled employees, union & non-union workforce, board of directors Technological Resources: patents, trademarks, trade name Capabilities RecruitingResearch & Development Manufacturing MotorcyclesMotorcycling Lifestyle Marketing & DistributionRider Training & Safety Precise production schedulesStrategic Management Strategic Alliance Core Competencies Strategic AlliancesResearch & Development Manufacturing MotorcyclesBrand Name H. O. G. ClubMotorcycling Lifestyle
Rider Training & SafetyPatents, Trademarks, Trade Names Financial Services: HDFS Finding of Fact #1: Harley-Davidson’s core customer base is shifting as the baby boomer population is aging. Recommendation/Justification: In 2006, the average age for purchasing a Harley-Davidson was about 47 years old with a median household income of $82,100. Of those purchased, 88% were made by men, while only 12% were purchased by women. Buell was off to a good start in 2000, by producing the Buell Blast because it was not only considerably smaller, it was more light weight in comparison to the traditional heavyweight models and it was less expensive.
Statistics were showing the median age on this bike purchase was around 38 years old and 50% were purchased by females. Focus is turning to smaller segments for women and younger generations. I think these statistics could send Harley-Davidson down the right path. More time and money need to be put into research and development to figure out, not necessarily what females want, but what they physically need in order to have a safe and exciting ride. My co-worker and her husband purchased a Harley a few years ago and shortly afterward, she decided to get her motorcycle license.
She never drove it however because the motorcycle was physically too heavy for her to operate. I believe Harley-Davidson needs to make more of a marketing effort to appeal to 20 something generation as well. In my opinion, Harley-Davidson has focused so much on appealing to the baby boom generation that it has become somewhat of a stigma. I associate Harley-Davidson with older men going through a mid-life crisis. One way would be to focus on social networking. Social networking sites like Facebook is a valuable way to advertise and reach consumers in a younger age group.
There is no faster way to reach this generation then by asking them what they want. More and more sites are asking for participation in short surveys in exchange for being entered into a drawing. I also think their Rider’s Edge program should be geared specifically for different segments instead of lumping all riders into one rookie category. As a woman in my 30’s, I know I do not want to be taking a rider training and safety class with young males who have need for speed on the brain. I would rather be in a class with persons who understand my concerns for being safe on the roadway.
Implementation: Harley-Davidson would need to start with the Strategic Management Model. They should be evaluating current results and I think the Blast is a good base model for statistics. Complete an environmental scan to determine all possible opportunities for developing the next generation of Harley’s not just female and younger persons and determine the competition in this market to address possible threats. Why do the younger people prefer crotch rockets? Determine the strengths and weaknesses internally and analyze SWOT factors.
I would also survey the employees. Find out what they think it would take to get their son or daughter to purchase a motorcycle. What changes would they like to see to encourage drivers from a new generation? Finding of Fact #2: Harley-Davidson motorcycles are considered a recreational item or a deferred purchase. Ziemer made a comment regarding the recession, “recession-resistant, not recession-proof. ” Recommendation/Justification: As United States currency weakens, it may be important to focus on countries where currency is more valuable.
Foreign operations can provide significant investment capital. I was surprised that only 27% of revenue came from foreign markets and I was just as surprised that India was not in the list of foreign operations. Other countries use motorcycles as a form of transportation, not because they are fun, but because they are simpler when negotiating in traffic and motorcycles have better gas mileage. I had applied for a job position in Bermuda a few years ago and while doing my research on lifestyles and living conditions, it was strongly advised to purchase a motorcycle for transportation.
With the recession and the cost of fuel rising, all vehicle manufacturers are struggling for a way to become more appealing in the marketplace. I think using these marketing strategies for motorcycles should not be underutilized. It is a matter of changing the way consumers view motorcycles. They do not have to be seen for merely recreation. Show consumers they are more environmentally friendly and many will jump on the band wagon. Implementation: I think this finding of fact is primarily a marketing issue for foreign markets and in the United States.
Because the text was unclear about what is currently being done in foreign markets, I would choose now as the time to explore the marketing potential. Who is the biggest competitor in these markets and what do we need to do gain the competitive advantage? I would also start exploring entry barriers for India and perform a cost benefit analysis. In the United States I think Harley-Davidson needs to utilize a market development strategy for developing new uses for its current designs. I would find ways to incorporate the green movement and associate them with the motorcycles.
I would use the rising gas prices as an advantage to promote MPG. I would research reasons why owning a motorcycle can save money and do a comparison to a car. I would focus on target groups. College students for example, need inexpensive transportation, ability to negotiate around college campuses and need to combat parking issues. What better way to solve all those problems then to buy a motorcycle. This not only changes the way consumers view the product it also reaches into markets outside of the baby boomer genre and address issues from finding of fact #1.
Finding of Fact #3: BRAG was created over 10 years ago, but the 2007 profile only indicates 11,000 members. Development and marketing in this area is neglected. Recommendation/Justification: In the opening of the case, it states “It was a pretty amazing sight, dozens at a time, thousands in a day” to describe the thousands of Harley-Davidson bikers from all walks of life who come together for the love of the ride. When H. O. G. organization began in 1983, there were 33,000 members. This makes me question why BRAG membership is trailing so far behind.
Included in Buell’s mission, it says Buell wants to provide its owners with an experience that is not provided by any other brand. Why hold a membership with BRAG if there is not much being offered? I think Buell Motorcycle Company is missing out on a very important opportunity to provide their owners that unique experience. Harley-Davidson invested in Buell specifically to gain entry into sport/performance niches that they had not previously had. With the question being raised now more than ever about how to penetrate the younger targeted groups, BRAG may be the ticket to promote such an idea.
As Harley did, why not include one year membership with the purchase of every motorcycle? That is one way to get memberships up, but plans need to be made to keep it that way. Sturgis is a rally for Harley enthusiasts but there are many “motorcycle” rallies around the globe. Take annual bike week in Myrtle Beach, come to find out there are actually two because different cultures ride different bikes. The first week is the traditional bike week and then there is a second one for enthusiasts who prefer performance. Implementation:
I would start with research on why the sport/performance market is four times larger in the European market than in the United States. I would also be going to Myrtle Beach during performance week and find out what enthusiasts are looking for. How can we make Buell the star of the show? Promote BRAG memberships and begin bigger, better rallies for Buell owners; get them excited about the brand. 11,000 members are not good enough; this is a large marketing opportunity. I feel like a strategic plan should have already have been put into motion.
They want to penetrate the young and female population but there has not been much effort put forth. Here is an interesting thought. What if Harley-Davidson used Buell as a tool to condition entry riders and prepare them for the Harley experience as they age? Perhaps it is better to leave Harley-Davidson just the way it is because our tastes do change as we get older. We already know half of Buell Blast purchases were from first time buyers and women. BRAG could be marketed on different levels. Buell could be the key to getting people excited about riding and Harley could be where the pros go.