Another key failure factor is shifting consumer preferences. These are driven by shifting demographics, as Harley's core target market is aging out of the range at which it would consider purchasing a Harley bike. This core market -- white males in their 40s and 50s -- has been fuelled by the baby boomer generation, who are now growing too old for superheavyweight bikes (Steverman, 2009).

A third key failure factor for Harley is the company's recent credit practices. The firm engaged in subprime lending in order to sustain its business in the face of slowing sales. As a consequence, however, it now faces a credit crunch. The firm has raised only part of the operating capital it requires, and is paying a high rate of interest (15%) for the privilege (Hamner, 2009). Almost a quarter of Harley's consumer loans were subprime in 2008, resulting in defaults. Harley wrote down $80 million in bad loans for 2008. Such writedowns, especially in the face of slowing sales, have contributed to a poor financial situation.

The company's current situation is a unique mix of hitting key success factors to build a strong business, then suffering through some of the key failure...

At present, the latter are more prevalent, resulting in Harley's present struggles.
Works Cited:

2008 Harley-Davidson Annual Report. Retrieved August 3, 2009 from http://www.harley-davidson.com/en_US/Media/downloads/Annual_Reports/2008/HD_Annual2008.pdf?locale=en_US&bmLocale=en_US

Sexton, Donald E. (2009). Value above cost: Driving Superior Financial Performance. Wharton School Publishing. Retrieved August 3, 2009 from http://www.whartonsp.com/articles/article.asp?p=1329147&seqNum=11

Teerlink, Rich & Ozley, Lee. (2000). More than a Motorcycle: The Leadership Journey at Harley-Davidson. Harvard Business School. Retrieved August 3, 2009 from http://hbswk.hbs.edu/archive/1677.html

Steverman, Ben. (2009). Harley Davidson: Cruising on Recovery Road? Business Week Retrieved August 3, 2009 from http://www.businessweek.com/investor/content/apr2009/pi20090416_239475.htm?chan=top+news_top+news+index+-+temp_investing

Hamner, Susanna. (2009). Harley, You're Not Getting Any Younger. New York Times. Retrieved August 3, 2009 from http://www.nytimes.com/2009/03/22/business/economy/22harley.html?_r=1&pagewanted=1