Harley Davidson Summary of Attached

Harley Davidson

Summary of Attached Internal & External Analysis and Conclusions have conducted an intense analysis of our Company's internal and external factors that can attribute to our future success, or future failure. To date, the motorcycle industry remains an extremely competitive industry, and one in which we are the primary contenders. However, the market is changing, and there are other areas of the motorcycle industry in which we could focus on. Our sales in the United States, and other well-developed counties, such as Germany and Great Britain, are up over our competitors such as Yamaha and Suzuki, however, there are markets in less-developed areas that I feel we would benefit from. Research in the industry indicates that other growing countries, such as Latin American countries, are becoming more dependant on reliable, less-costly means of transportation. Since most of these countries are small, there is not a great need for huge recreational vehicles or trucks. In fact, since many people in these countries are only commuting short distances, a motorcycle is a perfect solution. Thus, I feel that it would be in our best interest to begin working toward creating our market share in these countries. Since the majority of people in developing countries do not have the funds required to spend on a luxury-type motorcycle, we could begin with a basic model that offers all the necessities.

Other manufacturers, such as our Japanese competitors, already offer these type of bikes in developing countries. These bikes are fairly cheap for them to manufacture, develop, and produce, and as a result, they can sell them for lower prices. My suggestion is that we create a slightly higher quality bike, and sell in these developing countries for a lower price than our competitors. While at first it may seem that we are not making a profit, after the consumer becomes aware of the quality at the same low price, we will make up for the lost profits in an increased volume. Although this increased volume may take a few years until it is actually verified and reported, this is a risk that would benefit the company as a whole in the very near future. Finally, the conclusion of my external analysis is that our Company needs to broaden its horizons if we are to remain the primary competitor. My internal analysis concludes with the thoughts that we must drive our focus to new innovative products that we can manufacture with the new technology that is privy to only this Company. There is no reason why new products cannot be researched and developed, for we have both the budget and the means, something which some of our competitors do not have. We would also benefit by expanding out farther than our target population, as soon our competitors will gain some advantage by securing this population. Thus, our internal and external features can be improved with new implementations to ensure the future success of our Company. If we all work together, Harley Davidson will continue to operate as a company with no limits.

External Analysis: An analysis of pertinent industry and competitive data

The motor cycle industry is a highly competitive one in developed countries, such as the United States, Germany, France and the United Kingdom. The following bullet points represent the competitive nature available up-to-date in this industry:

Volume

Total industry sales for 2003 exceeded 950,000 in the United States

Total number of motorcycles in operation worldwide in 2003 was 28 million

Prediction for 2007 is a 5% increase in sales growth

Geographic Domination

In 2002, demand for heavyweight motorcycles increased by 17% in the United States

In 2002, industry-wide growth increased 10%

Industry Segmentation

Industry segmentation based on engine size and motorcycle style

Mopeds, scooters, small motorcycles - Most often seen in urban areas and developing countries

Motorcycles, large street bikes - Most often seen in North

America and Europe

Standard heavyweight motorcycles - Most often used as a means of low-cost transportation

Performance bikes - Most often used for responsive handling, rapid acceleration and high top-end speeds

Touring bikes - Most often known for their comfort features and Accessories, most often seen in the United States with baby boomers

Custom motorcycles - Highly custom bikes, most often seen in the United States, among the wealthier classes; less popular outside the United States

Market shares of leading motorcycle producers

Harley Davidson - 2001: 45.0%; 2002: 47.5%; 2003: 49.5%

Honda - 2001: 20.5%, 2002: 19.8%; 2003: 18.4%

Suzuki - 2001: 10.8%; 2002: 9.6%; 2003: 9.8%

Yamaha - 2001: 7.9%; 2002: 8.9%; 2003: 8.5%

Net revenues motorcycles in major markets

United States - 2002: $3,416,432; 2003: $3,307,707

Europe - 2002: $337,463; 2003: $419,052

Japan - 2002: $143,298; 2003: $173,547

Canada - 2002: $121,257; 2003: $134,319

Competitive Categories

Performance

Styling

Breadth of product line

Image and reputation

Quality of after-the-sale service

Price

Internal Analysis

As the external analysis clearly reveals, the Harley Davidson Company remains the top competitor in the motorcycle industry, since its inception in 1903. Harley Davidson has several strengths in its favor, as the company continues to increase profits and revenue, and has a positive outlook for its future. The company's main strengths are its continuous improvement, employee motivation and involvement, and key management strategy regarding the company's operations. One area of improvement is that the company focuses on their long-term issues, rather than a short vision. In 1985, the company was restructured according to Japanese-derived management principles that consisted of new marketing strategies and new manufacturing techniques. The company also motivates employees by including them on the management decisions, and instill values such as truthfulness, respect for individuals, and the stimulation of intellectual curiosity. Management in turn passes these values down through the products, workers, and financial success. Management is able to keep a firm grasp on the company's operations, and can consistently build improvement.

Harley Davidson's weaknesses consist of its main focus on luxury, high-end products, and the fact that the vast majority of its market share consists of the United States. These are weaknesses because this keeps the company so specialized that it can be driven out of other markets, such as cheaper bikes for use in urban or developing countries. However, this weakness can also be viewed as a strength because Harley Davidson is manufacturing high-end, expensive products for those consumers that can afford such products. The same type of sales for cheaper products in developing countries where consumers do not have the spending means would have to be made up of in volume.

Harley Davidson also has many opportunities, such as the fact that they now lead the industry in areas of information technology and research and development. The company has on-going relationships with companies whose goals are to improve engineering, and as a result, they are able to easily incorporate new technology into new and existing products. Harley Davidson is also an industry leader on endurance testing, while no other technology or machine has the capability of detecting secondary damage before it happens. The company is also very innovative and is not afraid to take risks, and the company has taken risks associated with a certain image, and turned them into successes. For example, the company has created a unique image with quality, and consumers immediately attribute Harley Davidson motorcycles as being of the best quality available. Another opportunity the company has is the ability to penetrate developing countries' demands for heavy bikes. This is a good opportunity, even though sales in such developing countries may start out rather slow, until the country and the customs of its people acclimate to the use of heavy bikes.