Case Study Harley Davidson

Topics: Motorcycle, Harley-Davidson, Harley Owners Group Pages: 7 (540 words) Published: December 26, 2014
Mackenzie Wolter
Case Study 3: Harley Davidson
8/7/12
Comeback Analysis
1. JIT Inventory – “lean production” allowed for product diversification, drastically cut “throughput time,” and provided for job enrichment amongst employees  
2. EI – decentralized operations and communication lines
 
3. SOC – helped detect defects early on in the manufacturing process  
4. Supplier Relations – “preferred suppliers” and long-term contracts  
5. Labor Relations – “close cooperation”
 
6. Marketing – expanded product line and created H.O.G.
 
7. Dealer Relations – store remodels
 
8. Tariff Protection – ITC and government help with Japanese imports  
Strengths
 








Domestic
 &
 International
 market
 share
 
High
 brand
 affinity/loyalty
 and
 image
 
HOGs
 
Product
 quality
 
Broad
 product
 &
 service
 portfolio
 
Complementary
 merchandise
 to
 
continually
 offer
 to
 riders
 
Rider
 events
 and
 get-­‐togethers
 create
 
family
 camaraderie
 

Weaknesses
 




Opportunities
 






Women
 &
 younger
 riders
 
International
 market,
 especially
 Europe
 
Continually
 improve
 quality
 parts
 
Greener,
 more
 fuel-­‐efficient
 
motorcycles
 
New
 product
 launches
 

Difficulty
 gaining
 market
 share
 in
 
European
 countries
 
Dependence
 on
 domestic
 market
 
Heavy-­‐weight
 motorcycles
 are
 less
 
environmentally
 friendly
 modes
 of
 
transportation
 

Threats
 






Average
 buying
 age
 is
 increasing
 
Some
 competitors
 have
 larger
 financial
 
and
 marketing
 resources
 and
 are
 more
 
diversified
 
Environmental
 protection
 laws
 
Market
 saturation
 in
 domestic
 market
 

Porter’s 5 Forces Model
Rivalry Among Existing Firms
• 4 major competitors in heavy-weight motorcycle segment: Harley Davidson, Yamaha, Suzuki, and Honda
 
• Some of the other competitors have more financial and marketing resources  
• However, Harley Davidson’s help from the ITC and government allowed them to catch up to their competitors and gain some ground in market share  
Threat of New Entrants





Very high entry barrier – requires high capital investment and is a mature industry  
Low economies of scale
 
Some small scale motorcycle producers play in the industry, but they are not a threat to the major competitors
 

Threat of Substitutes
• Cars, sports bikes, and scooter bikes are main substitutes  
• Harley is a luxury vehicle, so there are few close substitutes for this heavy-weight motorcycle
 
Power of Suppliers
• Steel, basic electric equipment, and shipping of the final motorcycles are the needs of Harley Davidson from its suppliers
 
• “Preferred suppliers” strategy decreased the number of suppliers Harley Davidson worked with and increased the quality of the suppliers as well; these long-term contracts protected Harley Davidson from supplier price increases and also created a trust between them and their preferred suppliers because the suppliers generated a lot more profit as well

 
Power of Customers
• Need consumers to buy in order to make money. Since Harley Davidson market is aging, they must attract new markets and make new brand loyal riders  
• Each Harley Davidson purchase is by an individual, so though one person will not significantly affect the financial earnings of the company, it is important to sell the individual experience to each customer in order that Harley Davidson can reach more markets and combine these sales to create financial growth

 
3 Challenges for James Ziemer
1. Increasing labor costs – labor agreement with two-tier strategy created...
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