Harley-Davidson Strategic Plan

Harley-Davidson’s Annual Report (2009) indicates sales from motorcycles and related products on a continuing basis decreased 23.1 percent to $4.29 billion compared to 2008 and income from continuing operations decreased 89.7 percent from the prior year to $70.6 million (Harley-Davidson, 2010a). These losses can be attributed to HDFS and the impact of restructuring (Harley-Davidson, 2010a). However, by eliminating excess capacity, reducing administrative costs and non-core business operations, Harley-Davidson believes these steps of restructuring will reflect between $240 million and $260 million in annual ongoing savings (HD1, 2010). Nonetheless, excusing the decline in numbers, Harley-Davidson’s Annual Report (2009) states, since 1993, the company has paid a dividend every year (Harley-Davidson, 2010a).

Harley-Davidson, Inc. since its inception has specialized in selling dream motorcycles that are of high quality and distinctive in styles. The company in the past have seen turbulent business environment to the extent of leveraged buyout, infiltration of foreign made bikes as well as government regulations. Yet despite these factors, Harley-Davidson continues to reap profits, yield high growth of approximately 15% a year and retain its customer base (Official Website 2004). This position in the market is however limited to the US whereas in other countries of the world Harley-Davidson products remain luxury item requiring emotional attachment with American iconism.

Currently H-D is the leading seller of heavy weight motorcycles across the entire world. Because they are at the pinnacle they are the target for the competition. Some of Harley Davidson 's advantages are name recognition, brand loyalty, brand quality and customer loyalty (Hitt, Ireland & Hoskisson, 2013, p. 81). The company benefits by having “the made in America” image attached to its products. The image of a Harley rider and owner is one of a tough, independent, free spirit, ready and willing to take on the world type of man. The sound of a H-D motorcycle in idle or being ridden is unique and very identifiable.

Harley-Davidson is well known for its unique motorcycles. Its subsidiary, Harley-Davidson Motor Company (HDMC), manufactures five families of motorcycles, namely, Touring, Dyna, Softail, Sportster and V-Rod. These models are distinguished by their frame, engine, suspension, and other characteristics. The company shipped 233,117 motorcycles in the fiscal year ended December 2011, comprising 39.5% Touring motorcycle units, 39.2% Custom motorcycle units, and 21.3% Sportster motorcycle units.

Harley recently posted its first sales increase in 16 quarters, driven "entirely by retail growth outside the U.S.," Levatich said. (JS ONLINE, Journal Sentinel)

Harley Davidson Company has a long history of building motorcycles that have worked to actually shape a part of the American culture. Its product positioning and marketing strategies have served as a prime example for any company to imitate. Harley Davidson has developed immense levels of brand loyalty over the years. However, the company has also been burdened by the recent economic downturn and now is going through something of a rebuilding phase as it tries to determine its best course forward. This analysis will conduct a SWOT assessment of Harley Davidson's current position and make recommendations on how Harley can continue to develop the next phase of its iconic American brand.

The overall intensity of rivalry in the motorcycle industry is strong, key players in this industry include the Harley Davidson, Winnebago, Polaris, Thor, Artic Cat and Marine Products. These top performers hold a high percentage of

Celebrating their 100th anniversary next year, Harley-Davidson is a true American success story. From their modest beginnings in Milwaukee, Wisconsin to one of the most recognized company names worldwide, they have been passionate about motorcycles. Harley offers an experience like none other with the one of a kind look, feel, and sound only available on a Harley. Besides their main business of building and selling motorcycles, they have began to offer financing and insurance through Harley-Davidson Financial Services, and they also offer a full line of accessories and apparel to make the Harley experience complete.

Historically Harley-Davidson to be a Niche Marketer, which is they had focused in on one particular aspect of the market. Kotler and Keller identified the following characteristics of niche marketing; customers have a distinct set of needs, they are willing to pay more to the firm that best suits their needs, it is not likely to attract competitors, gains economies through specialized products and it has a size, profit and to grow. Almost all of these hold true for the “heavyweight” segment of motor cycles that Harley-Davidson produced.

Harley-Davidson has managed to dominate the U.S. market by investing in research and development, experimenting with its designs and

The late 1950s and early 1960s saw the first influx of low-priced, smaller Japanese motorcycles and scooters into the United States. Honda began U.S. distribution of its products in 1959, with the slogan, "You meet the nicest people on a Honda," to combat the negative image associated with the sport. Yamaha starting selling motorcycles in the United States during 1960; Suzuki followed in 1963; and Kawasakii joined the competition in 1967. BMW opened a U.S. distribution arm in 1975, incorporating in New Jersey. Harley-Davidson ended years of private ownership in 1965 with a public offering of its stock, and eventually merged with industrial giant AMF in 1969.

Regardless of their emergence in the market in the year, in 1903, Harley-Davidson together with the motorcycle industry did not have an easy start until the end of the Second World War. Many people used motorcycles during the period the war took place. Harley-Davidson was instrumental in supplying around 90,000 motorcycles to the American military during this period. Many veterans opted to buy motorcycles after returning home. This is because they enjoyed riding the motorcycles during the war and desired to continue riding them after the end of the war. This generation was called the "baby boomers" and became the primary target for Harley-Davidson to market their products.

•     Started as a partnership between a draftsman and a pattern maker in Milwaukee, Wisconsin in 1903. William Harley and Arthur Davidson intrigued by the newly invented motorcycles began experimenting with ideas to design and build their own motorcycle. They enlisted Arthur's brothers, Walter a skilled mechanic and William a machinist who gave live to the Harley-Davidson Motor Company. That early partnership has evolved into a family of millions of Harley-Davidson, Inc. stakeholders throughout the world.

After an investigation by the US International Trade Commission, in 1983 President Reagan imposed a 45% tariff on imported bikes and bikes over 700 cc engine capacity. The new management deliberately exploited the past appeal of their big machines, building motorcycles that purposely adopted the look and feel of their earlier models. Quality increased, technical improvements were made, and buyers returned. Harley-Davidson once again became the sales leader in the heavyweight (over 750 cc) market.

Rivalry Competition: Harley Davidson has a High Rivalry Competition. HD deals with a huge amount of competition in the Motorcycles industry from other motorcycle manufacturers from around the world. These include Honda, Yamaha , Suzuki from Japan; Ducati, Aprilia, BMW and Triumph from Europe; and the Indian as its main rival from the US. The major problem HD faces here is that most of its major competitors are very diversified and have larger financial and marketing resources. For example, Yamaha generates only half of its revenue from motorcycles. The growth rate of this particular industry is forecasted to be 3.4%.