1. Harley Davidson Inc. 2008
THRIVING THROUGH A RECESSION

2. The Statements
Mission:
“We fulfill dreams through the experiences of motorcycling, by providing
to motorcyclists and to the general public an expanding line of
motorcycles , branded products, and services in selected market
segments.”
Vision:
“Harley Davidson is an action oriented, international company, a leader in
it’s commitment to continuously improve it’s mutually beneficial
relationships with stakeholders (customers, suppliers, employees,
shareholders, government, and society). Harley Davidson believes the key
to success is to balance stakeholders’ interests through the
empowerment of all employees to focus on value-added activities.

3. The History of Harley Davidson
1901: William S. Harley, age 21, and friend Arthur Davidson started company in backyard shed.
1903: William Harley and Arthur Davidson make available to the public the first production
Harley Davidson Motorcycle. Three were built and sold.
1904: Production increased to eight motorcycles. The company moved to Juneau Avenue,
Milwaukee, Wisconsin. This is the site of the company’s present offices.
1907: The company was incorporated.
1918: Almost half of all Harley Davidson motorcycles produced are sold for use by the U.S.
military in World War (20,000 estimated used by the war’s end).
1920: Harley Davidson is the largest motorcycle manufacture.
1933: An art-deco “eagle” is painted on all gas tanks.
1941: Production of civilian motorcycles is almost entirely suspended in favor of military
production.
1945: World War II ends and HD has produced almost 90,000 models for military use.

4. 1969: HD merges with American Machine and Foundry Company (AMF), a longtime producer
Before products.
of leisure
1974: Production expanded from 15,000 in 1969 to 40,000. AMF favored shot term profits.
1975:1980: HD ignored the Japanese competition (Honda, Suzuki and Yamaha).
1981: After Beals, head of HD, and 13 other executives conducted a leveraged buyout of the
Vaughn
company for $65 million.
1985: Citicorp refused to lend HD any more funds, 4 hours before bankruptcy a deal was made.
1993: Acquired 49% interest in Buell Motorcycle Co. , a manufacturer of sports performance
motorcycles. Buell’s mission was to develop and employ innovative technology to enhance
“the ride” and give owners an experience no other brand could provide.
1995: HD acquired all common stock, and all equivalents, of Eaglemark Financial Services, Inc.
They provided credit to leisure product manufacturers , their dealers, and customers in U.S. and
Canada.
Contrast Brightness Sharpness
1996: discontinued operations of Transportation Vehicles segment to concentrate its financial
and human resources on it’s core motorcycle business.
Corrections allow you to change the contrast, brightness,
1997: Harley Davidson created an internal makeover. The unsung hero was Garry Berryman,
and sharpness of your images.
former vice-president of Materials Management/Product Cost at Honda.

5. 2000: New Softail model was introduced with twin cam 88B engines. Fuel injection added 2001.
Buell Blast single –cylinder bike offered. HD introduced new rider’s course aimed at new riders
and owners, offered at HD and Buell dealerships.
2001: the V-rod was introduced to appeal to the younger and international markets that
wanted sleeker and faster bikes.
2002: The first Harley bike to combine fuel injection, overhead cams, liquid cooling, with new
115 horsepower. First female racer added to Harley Davidson racing team in an effort to
capture female support.
2003: Harley Davidson introduced Lightning XBS9.
2004: Sportster refitted with rubber engine mounting, new frame and wider rear tire.
2005: XL 883 Sportster featuring a lowered seating aimed at aging baby boomers. Bikes
reminiscent of 1939 and 1949’s bikes introduced.
2007: Harley Davidson Financial Services financed 55% of new HD motorcycles retailed by
independent dealers in the U.S.

6. PROFESSIONAL DYNAMIC
INNOVATIVE SOPHISTICATED
CREATIVE MODERN

7. The SWOT Analysis
Strengths:
* Domestic and International Market share
* Financial status
* Product quality
* Strong brand loyalty
* H.O.G.s (Harley Owners Group) & B.R.A.G. (Buell Riders Adventure Group)
* Strong distribution network
Weaknesses:
* Harley Davidson does not emphasize price in it’s product
* Harley Davidson has had difficulty gaining market share in some European
countries.

8. Opportunities:
* The international heavy weight market is growing and almost as large
as the U.S. heavyweight market.
* The European demand for Harley Davidson is the highest in the
international market and represents the single largest motorcycle
market in the world.
* Women and younger riders are increasingly becoming interested in
bikes – Japan has more female H.O.G. members.
* Alliances with other automobile manufacturers are possible.
* Industry registrations of domestic heavyweight motorcycles are
increasing.
* Market share increasing in Europe and Asia for the last few years.
* Increasing demand in U.S. markets for motorcycles.
* Customers value quality parts and accessories.

9. Threats:
* Harleys ongoing capacity restraints caused a shortage of supply and
a loss in domestic market share in recent years.
* Harleys average buying age is 46 years old and increasing.
* The European Union’s motorcycles noise standards are more
stringent than those of Environmental Protection Agencies in the
U.S. and increased environmental standards.
* Some competitors of Harley Davidson have larger financial and
marketing resources and they are more diversified.
* Shifts in buyer needs and tastes.
* Customer loyalty in European and Asia countries.
* Costs could become expensive from international importing – for
example – in India 60% tax on total cost for importing an
automobile and 30% road tax.

10. Harley-Davidson has had numerous Marketing slogans over the
years. One of the earliest, from 1910, proclaimed the bike is
"Always a trusted friend." Later the company issued, "The
motorcycle that is not that uncomfortable." "Get a kick out of
life" came out in 1927. More recent slogans have emphasized the
unique Harley biking lifestyle: "Live to ride, ride to live;" "Turn on
your own thunder;" "The road starts here. It never ends;" "The
legend rolls on;" "It's time to ride; "Until you've been on a
Harley-Davidson, you haven't been on a motorcycle;" and "It's
not the destination, it's the journey."

11. Industry Conditions in 2007
More than 516000 units registered in U.S. & 403000 in Europe
(651+cc)
Rising income level in emerging countries – major industry growth
drive force.
Demand for heavyweight bikes outpaced smaller in U.S. from late
1990’s until 2003.
In 2007 demand for heavyweight motorcycles decreased by 6.2% in
the U.S. and increased by 13.7% internationally.
651+cc accounted for largest portion of demand in North America
and Europe.

12. North American 651+cc (Heavyweight) Motorcycle Registrations
(Units in thousands)
2005 2006 2007
Total new market registrations 517.6 543 516.1
Harley Davidson new registrations 252.9 267,9 251.4
Buell new registrations 3.6 3.8 3.7
Total company new registration 256.5 271.7 251.1
Percentage Market Share
Harley Davidson motorcycles 48.9% 49.3% 48.7%
Buell motorcycles 0.7% 0.7% 0.7%
Total Company 49.6% 50.0% 49.4%
Honda 16.6% 15.1% 14.2%
Suzuki 12.4% 12.9% 12.5%
Yamaha 8.9% 8.6% 9.2%
Kawasaki 6.5% 6.8% 7.2%
Other 6.0% 6.6% 7.5%
Total 100% 100% 100%

13. European 651+cc (Heavyweight) Motorcycle Registrations
(Units in thousands)
2005 2006 2007
Total new market registrations 350.7 376.8 403
Harley Davidson new registrations 29.7 34.3 38.7
Buell new registrations 4.6 4.1 4.6
Total company new registration 34.3 38.4 43.3
Percentage Market Share
Harley Davidson motorcycles 8.5% 9.1% 9.6%
Buell motorcycles 1.3% 1.1% 1.1%
Total Company 9.8% 10.2% 10.7%

14. Competition in Global Motorcycle Industry
• Rivalry criteria – performance, styling, breadth of
product line, image, reputation, quality of after sales
services, price.
• Difficulty US and European Manufacturers had in
attracting price sensitive European market.
Market Share segment
• In the North American market – Harley Davidson had
48%
• In the European market – Harley Davidson had 9.8%

15. Harley Davidson’s Strategy to Successfully
Compete in the Motorcycle Industry
• After LBO company felt need to rebuild from the ground up
• Products were unreliable & had poor performance in relations to less
expensive Japanese motorcycles.
• Greasy, run down shops.
• Management realized that a strong alliance to Harley brand by many
bikers was their only strength.
• Market research to know customers – negative feedback.
• Adopted Japanese management practices.
• Promotions at bike rallies.
• Improved dealer network.
• Pilot program – clean and attractive showrooms to showcase
Harley’s improved motorcycles, display apparel and other Harley
merchandise.
• 1400 dealers – 75% space for accessories and earned 25 – 40 percent
of their earnings from sale of apparel and accessories

16. Harley Owners Group (H.O.G.)
Came together at events and rallies for fun,
adventure, a love of their motorcycles and the
open road.
• Loyal club formed in 1983
• Created to form sense of community
• Organized rides, raised money for charities
• Started with 33,000 in 1983 and had grown to over
1,000,000 in 2007.
• B.R.A.G. (Buell Riders Adventure Group) was created in
1995 and HD plans to grow both organizations.
• 2007 H.O.G. continued to sponsor motorcycle events on
local, regional, national, and international levels.

17. Distribution and Sales in United States,
Europe, Asia Pacific, Latin America, Canada
• US - 684 independently owned full service Harley
dealerships. In addition had 104 Secondary Retail
Locations, 68 Alternate Retail Outlets and 12 Secondary
Retail Outlets.
• European Countries (32) – 370 Harley Davison
dealerships.
• Asia Pacific- 130 independent dealerships in Japan, 49
independent Harley Davidson dealership in Australia
and New Zealand.
• Latin America – 12 countries served 31 independent
dealerships.
• Canada – 75 independent Harley Davidson Dealerships.

18. Revenue
Harley Davidson
Motorcycles: $4,446.8
Parts & Accessories:
$868.3
General Merchandise:
$ 305.4
Buell Motorcycles:
$100.5

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