Harley Davidson Future Strategy

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1. Company Overview
Harley-Davidson Motor Company (HDMC) is one of the world leaders in the production, marketing and servicing of motorcycles in the US and throughout the world. The company manufactures a range of motorcycles and has established a network of dealerships in the US and overseas, and has a series of merchandising and selling strategies, including a growing financing business. The company is headquartered in Milwaukee, Wisconsin.

In terms of distribution of revenue, Harley-Davidson’s worldwide motorcycle sales (HDMC and BMC) generated 79.9% of the motorcycles segment’s total revenue, and increased by 8.4% during 2004. In addition the parts and accessories, general merchandise and other items accounted for 20.1% of
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Strategic Change 2: Management Buyout and turnaround
Under these circumstances, a group of 13 H-D executives bought the company from AMF in 1981. The buyout was funded by Citicorp, one of the leading banks in the US. The new management took immediate steps to reorganize H-D 's operations to meet the competition from its Japanese counterparts and regain its leadership status. In a move to help the floundering United States motorcycle industry in 1983, President Ronald Reagan and his government, in a pure protectionist mindset, increased tariffs on large Japanes motorcycles from 4.4% to 49.4%. But this increase was only effective for five years and would decline annually. Since it was the subject of a management buy-out in 1981, unit sales had risen from 41,000 in 1981 to 291,000 in 2003, turnover had increased from $289 million to $4 '620 million and after reporting their first ever operating loss in 1982, net profits had grown steadily to reach $760 million in 2003. A stock market listing had been obtained in 1986, since which time the stock price had shown an annual compound growth rate of over 40%, giving the Company a value in excess of $18 billion by 2005.
Strategic Change 3: Entering the low cost segment
Harley dominated the American motorcycle market over 750 cc for years. Harley tried to introduce new products. But its customers refused and never accepted anything but a H-D motorcycle. Jeff

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