Harley Davidson Amf Took Over Harley Davidson

Harley Davidson

AMF took over Harley Davidson in 1969 (Motorcycle.com, 2012), a few decades before Treacy and Wiersma developed their theory about value disciplines (1992), so Harley management clearly did not have these theories in mind when setting strategies in those days. The three value disciplines are operational excellence, product leadership and customer intimacy. Arguably, Harley excelled at all three in those days. The company had a very high degree of customer intimacy, fostering brand loyalty. But in those days, Harley was also a product leader. In addition to maintaining a leadership position in heavyweight bikes, Harley tried a number of innovative approaches to growing its market, such as scooters, boats, the electric-motor Servi-Car and golf carts (Motorcycle.com, 2012).

The company's culture was that of a club of owners and workers, but Harley also held a uniquely strong position within the motorcycle industry in America, and this was reflected by the firm's belief that it should dominate multiple market segments. Harley's strong brand power and corporate power were even leveraged to try to keep Japanese bikes out of the market, although eventually this tactic would be unsuccessful, and this lack of success led in part to the company selling out to AMF in 1969 (Motorcycle.com, 2012).

After AMF took over, the company did not focus on any particular value discipline. In particular, the focus on brand loyalty (customer intimacy) was forgotten. If there was a focus during this period, it would be on what is termed operational excellence. The opening of the York, Pa. plant in 1973 highlighted AMF's commitment to manufacturing as a primary source of profits in the marketplace. Harley's pace of new product introductions was reduced and there grew a sense in the motorcycle industry that product leadership was being ceded to the Japanese (Bolfert, 2002).

The culture at Harley Davidson shifted during this time, from that of a market leader but still family-run business to that of a corporate entity. This cultural shift aligned well enough with the strategy the company was adopting, but it clashed with the old culture, and clashed with what the market wanted to see from Harley Davidson. Most customers and employees did not want Harley to be a corporate monolith. As a result, there was a clash between the old culture and the new culture that AMF wanted Harley to have. AMF saw Harley as an investment, while the relationship with the company and brand for workers and customers ran deeper than that. As a result, there were a lot of people that did not respond well to AMF's initiatives and what the company was trying to do with either the strategic direction or the corporate culture of Harley-Davidson during those years. Performance began to suffer as the result, and AMF proved unable to shift the culture, only succeeding in causing a cultural clash and a misalignment of corporate strategy and prevailing culture.

Had AMF paid more attention to the cultural dimension, it might have taken a different approach to strategy at Harley. The company did not realize how embedded the Harley culture was in the "Harley mystique." The mystique was a combination of culture, marketing, brand loyalty and the overall strength of the company. The mystique ran through the company and united it with its customers. AMF did not seem to understand the power of this mystique and as a result the strategic moves it made that took the company away from its roots were met with negativity both from employees and customers alike.

AMF appeared to view Harley more as a corporate entity than an organic, family-run business. As such, AMF dramatically underestimated the Harley mystique, and more importantly AMF underestimated the value that this mystique had in the marketplace. Consumers and workers began to sense that they were no longer a part of something, and that Harley Davidson was just another product. Consumers in particular interpreted this as freedom to choose a product that was not a Harley, and they began to do just that.