I.

Time context:
2009
II. Viewpoint:
Marketing Department
III. Statement of the problem
A. Major problem:
Harley Davidsons product line is relatively out of the
consumers preference in their domestic market.
B. Minor problem:
.! Decrease in annual domestic sales.
2.! "#istence of foreign competitors in their local operation.
$.! %imited market segment.

IV. Objectives
A. MustShort !an"e Objectives
&'
. (o identify the customers preference for a particular product.
2. (o satisfy the target market demands and provide product line
)ased on their preference.
*. #ant$on" !an"e Objectives
. Dominate the industry despite of the high competition.
2. (o have a clear strategic direction of continuing its product
improvement for the )enefit of the company and
meeting customers demand.
$. (o )e a)le to capture ma+ority of domestic market share.

V. Areas of %onsi&eration
A. S#OT Anal'sis
Stren"ths
. ,o-erful )rand image
*ecause the firm esta)lished in the mind of customer that
riding a Harley. Davidson motorcycle is the fulfillment of
their dreams.
2. /trong relationship -ith employees
*ecause it is one of their resources -hich made them
successful
$. (he sole American motorcycle manufacturer
&2'
(his is their key factor to dominate the industry for
decades
0. "sta)lished Academy of Motorcycling
1hich provide )oth ne- and e#pert riders -ith a deeper
engagement in motorcycling and to e#perience Harley
Davidson style.
2. ,roduct customi3ation
1hich ena)le the customers to )e more creative in the
styles they -ant.
4. 5ustomer loyalty
*ecause they esta)lished on the mind of the consumer
that they )elong to the family of Harley -hen they o-n a unit.
#ea(nesses

. ,roducts are more e#pensive
(hats -hy only those rich people can purchase the Harley
motors.
2. People also feared of being called as hooligans in the
society -hen they ride a Harley Davison )ike.
$. American pride is the main )asis of their product
development.
0. 6ffers only a single product line in the industry.
2. /lo- gro-th in the international market share.
4. 5ultural diversity product designs are for )ig people like
American and "uropeans.
&$'
Opportunities
. /trong gro-th in the motorcycle industry in Asia and Me#ico.
2. Increasing num)ers of -omen riders.
$. Increasing num)er of aging population -hich is considered
as their largest market segment.
0. (echnological advancement is useful in the product
development and innovation.
2. "#pansion in the glo)al market due to increase in economic
gro-th.


Threats
. HDs competitors offer a more diversified product line thats
-hy they are vulnera)le in the industry changes.
2. /u)stitute ,roducts potential development )ecomes a factor
in purchase decision making.
$. "uropean motorcycle industry is suffering from declining of
gro-th.
0. "#tinguishment of their largest market segment -hich is the
aging population )ecause they are una)le to operate a
motorcycle.
2. Developing car industry.
4. 5hanging preference of the customers.
&0'
7. ,otential entries of more players -ith lo-er prices.
S#OT MAT!I)
/trength 1eaknesses
6pportunities Having an academy of
motorcycles e#pand
the motorcycles
industry in Asia and
Me#ico
8/096!
(echnological
advancement that
puts Harley.Davison
product more
e#pensive compare to
its competitors
86091!
(he costumers loyalty
helps in the e#pansion
in the glo)al market
8/4962!
Harley.Davidson
pursuing the American
pride due to
increasing no. of aging
population -hich their
target market
86$91$!
Increasing no. of
-omen riders cause of
po-erful )rand image
of Harley.Davidson
8/962!
(hreats Harley.Davidson is the
only one motorcycle
manufacturer in
America )ut its
competitors offer
more diversified
product line
Harley.Davidson must
provide su)stitute
products )ecause its
only offer single
product line
8(2917!
&2'
8/$9(!
,roduct customi3ation
that Harley.Davidson
offer gro- in the
"uropean motorcycle
industry
8/29($!:
Due to changing
preferences of the
costumer makes slo-
gro-th in the
international market
shares
8(4912!
*+ST+$ A,A$-SIS
,6%I(I5A%
. (he ;nited /tates military and police used the product of
Harley Davidson.
2. Harley.Davidson faced is the import<e#port rates on their
products.
$. Harley.Davidson have am)itions to enter the 5hinese
market9 ho-ever currently face 5hinese political issues as
motorcycles are prohi)ited in 70 of its cities and
o)taining a motorcycle license costs time and money.
0. /moke "mission.

"56=6MI5A%
&4'
. 5onfidence in economy is directly proportional to the
purchasing of consumer items
2. 6pportunities in emerging economies &India and china' )ut
uncertain operating situations.
$. In >ork9 ,A the employees strike happened due to failed to
agree on -ages and health )enefits.
0. ?ising fuel prices -ill affect )oth Harley.Davidson their
suppliers and Harley.Davidson@s competitors.
2. 5onsumers are less inclined to spend their money.
/65IA%
. (he firm support *5=/ 8*reast 5ancer =et-ork of
/trength! and 8Muscular Dystrophy Association!
2. (he unforgetta)le e#perience.
$. Aovernment reports state that motorcyclists are more
likely to )e in+ured. Beeping this social issue in mind9
)uyers may choose a company that focuses on the safety
of its products.
("5H=6%6AI5A%
. Harley.Davidson have a -ide variety of products according
to standard9 performing9 touring and custom
2. (he advancement of Harley.Davidson in the parts of
motorcycles.
&7'
$. Anti.lock )reaking systems and Cclutchless@@ transmissions
are )eginning to )e developed )y Harley.Davidson and
other competitors.
0. Harley.Davidson has prided them on having a Ddistinctive
soundE.
"=FI?6=M"=(
. =oise pollution and some emission standards of Harley.
Davidson )ike is not up to level of some countries across
the glo)e
2. Girst 5orporation to voluntarily enroll in the one clean.up
program9 this program is design for the clean.up of the
affected soil and ground -ater at the former york naval
ordinance plant.
$. ,roduce an environmental -arranty their -arranty ensures
each o-ner that the vehicles is design and )uilt free of any
defect in materials and -orkmanship that -ould cause the
vehicles to meet ",A standards
0. Motorcycles are primarily used during -armer months9
from mid.march to august.
%"AA%
. In India and 5hina9 delayed for several years due to high
tariffs and emissions regulations
&H'
2. (he pollution regulations have recently changed9 )ut the
tariff pro)lem is yet unresolved
$. (he import duty held up )y 40I and ta#es of $0I -hich
effectively dou)le the sales price.
0. (he age restriction on riders is 79 coupled -ith the legal
reJuirement for a motorcycle license. Additionally9 the
motorcycle must )e maintained: have an M6(9 ta# and the
rider must -ear a helmet.
In&ustr' Anal'sis
Harley.Davidson is an American motorcycle manufacturer
company that founded in Mil-aukee9 1isconsin and -ith the
headJuarters in Kuneau Avenue. It is one of the t-o ma+or American
motorcycle manufacturers that survived in the Areat Depression. It is
named after the late 1illiam /. Harley and his friend Arthur Davidson9
Harley.Davidson started in a small engine )ut soon variegate.
.. #hat is the pro&uctservice/
Harley.Davidson sells different classes of heavy-eight
motorcycles are designed for cruising on high-ays. (hey also have
parts9 different kinds of apparel and accessories for different ages.
Harley.Davidson allo-s you to customi3e your o-n motorcycle for the
convenience and to sho- out your passion.
(hey also have a financial service that includes the group of
companies doing )usiness -ith Harley.Davidson -hich provides
-holesale and retail financing and as an agent9 provides insurance and
&9'
insurance related programs primarily to Harley.Davison and *uell
dealers and their retail customers.
A. #hat function &oes it serve/
Harley.Davidson serves as a provider of motorcyclists and to the
general pu)lic an e#panding line of motorcycles and )randed products
and services in selected market segments.
Ginancial services programs to dealers and retail customers.
B. #hat are the channels of &istribution/
(he channel distri)ution uses is e.commerce and -e) design.
0. #hat is the in&ustr' si1e in units an& &ollars/
Harley Davidson is increasingly reliant on international sales9
especially in "urope. In 20009 only HI of the companys sales -ere
international. (his figure had moved to $2.2I )y 2009 helped )y a
heavily -eakening dollar. *ecause Harley incurs its production costs in
the ;nited /tates9 it )enefits -hen the dollar -eakens against the "uro
and the >en.
,eople tend to )uy dollars to )uy ;./. goods9 or to hedge against
the fluctuation of glo)al currency 8the ;./. Dollar is the -orld@s most
trusted currency!. 1hen people )uy dollars9 the dollar goes up.
A. 2ow fast is it "rowin"/
Harley. Davidson is increasingly reliant on international sales9
especially in "urope. In 20009 only HI of the companys sales -ere
come from international account9 figure had move to $2.2I )y 200
&0'
helped )y a heavily -eak dollar. *ecause Harley incurs its production
costs in the ;./ it )enefits -hen the dollar -eaken against the "uro
and >en.
B. Are pro&uct &ifferentiate&/
Grom the a)ove mentioned products and services9 -e can derive
that Harley.Davidsons products and services are differentiated.
%. Are there hi"h exit barriers/
(here is a lo- e#it )arrier )ecause the market is sta)le so the
profit margins do not oscillate along time and also )ecause of many
players in the market industry.
&'
3. Are there hi"h fixe& cost/
>es9 -orld-ide independent dealer retail sales of Harley.
Davidson motorcycles. ?etail sales continue to )e impacted on a glo)al
)asis )y difficult economic conditions.
+. Are there some of the forces that &etermine the stren"th
of competition amon" existin" competitors/
In its market industry9 the company had these follo-ing factorsL
5onsumer %oyalty9 *rand A-areness9 Ginancial ,osition9 ,rice
5ompetitiveness9 Market ,ositioning9 ,roduct and /ervice Muality9
Alo)al "#pansion9 6rgani3ational /tructures and ,roduct Diversity.
4. #ho are the major competitors/
Harley.Davidsons direct e#isting competitors are the po-erful
Kapanese makers Honda9 >amaha9 Ba-asaki and /u3uki. Aermany@s
*M1 also competes in this segment9 ,olaris the sno- )ikes maker and
the other minor "uropean makers such as Ducati and Au33i )y *ritains
=orton.
A. #hat are their mar(et shares/
Harley.Davidson increased market share in the ;./.9 its )iggest
market9 for the Juarter and year9 -hile sales slipped a modest .02I.
(he Motor 5ompany stated that ;./. 42Ncc sales -ere do-n 0.4I
for the year9 -hile Harley sales -ere do-n only .7I for the year.
&2'
(heir ;./. market share in that segment increased to 20.9I from
2$.$I a year earlier and 02.0I in 200H.
1orld-ide9 H.D sales -ere do-n H.2I from 2009 to 2009
though sales increased in "urope and %atin America. And overall
international sales -ere do-n only .9I from a year earlier. And the
-orld market share is $.9I.
2arle'53avi&son Motorc'cles

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&0'
B. Is the in&ustr' consoli&ate& or fra"mente&/
(he industry is fragmented )ecause there are many players
in the industry and operates9 not only in their respective domestic area
)ut also operates in the glo)al market.
6. #ho are the major customers of the in&ustr'/
(he average Harley customer is an upper.class 07.year.old -hite male9
and has )een getting older at a rate of 4 months every year for the last 20
years.
A. Are the' powerful/
.=o9 )ecause most of the customers came from specific
individuals.
B. #hat "ives them power/
&2'
55onsumers of Harley Davidson motorcycles are individual
customers9 thats -hy they cant seriously affect Harleys financial
position.
.(he num)er of dealers around the glo)e is also less and they
are also dependent to the individual customers that cannot affect
Harley.Davidson financial position.
7. #ho are the major suppliers of the in&ustr'/
.Garia
A. Are the' powerful/
5=o
B. #hat "ives them power/
. /teel is the )asic electrical reJuirement and shipping of final
motorcycles is the main thing Harley.Davidson seeks from the
suppliers.
.Harley.Davidson has -ide span of suppliers9 so that if one
supplier attempted to increase the price they can easily s-itch to the
alternative suppliers -ithout any pro)lem in production.
8. 3o si"nificant entr' barriers exist/
*arriers to entry9 the motor)ikes market are characteri3ed )y the
high technology9 mass production and lo- prices in the light-eight
segment.
A. #hat are the'/
Kapanese makers o-n the )iggest market share against other strong
"uropean competitors
&4'
O 5he3ks HusJuaena and the /panish Der)y they manufacture and
customi3ed )ikes
O 5ustomer loyalty and strong image is a )arrier for the makers than
the classic Harley.Davidson Inc. and *M1 +ust as for the super car
segment Gerrari and ,orsche.
O ,roduct differentiation
O /-itching costs on the cost that )uyer has to a)sor) to s-itch from
one supplier to another.
O 5apital reJuirements for entry9 the investment of large 5apital and
the significant risk to enter.
B. Are the' effective in protectin" existin" competitors thus
enhancin" profits/
>es9 )ecause of the )rand loyalty that continuing in the mind set
of an individual that if you say Harley.Davidson its has a good Juality
and an adventure e#perience to have this kind of product and services
that HD offered. (he real po-er of Harley.Davidson is the po-er to
market to consumers -ho love the product
9. A. Are the' an' close substitutes for in&ustr' pro&uct an&
services/
=atural su)stitutes of heavy and super heavy-eight motor)ikes
are medium and light-eight motorcycles9 mopeds scooters and as a
meaning of transportation cars9 trucks9 /;F@s9 pu)lic transportation
and )ikes. *oth suppliers and distri)utors have lo- impact in this
&7'
market )ecause of the atomi3ed of the num)er of suppliers and the
)rand loyalty of distri)utors<dealers.
9 B. 3o the' provi&e pressure on prices chan"e in the
in&ustr'/
=o9 )ecause they choose to )e traditionally different in their
competitors offering lo-er prices compare to them. All they -ant is to
satisfy their customers and give the )est e#perience in motorcycling.
Gactors differentiated HD from competitorsL it has al-ays )een strongly
market focused unlike its more technology focused competitors.
5oherently9 it offers highly customi3ed motorcycles that imply higher
production costs9 yet provide customers -ith e#tra value thus
increasing their loyalty.
: A. #hat are the basic strate"ies of competitors/
P /ales.Marketing method that involve high advertisements
P Distri)ution method
P 6perational "#cellence.strategy is predicated on the production
and delivery of products and services. (he o)+ective is to lead the
industry in terms of price and convenience.
P ,roduct %eadership.strategy is predicated on producing a
continuous stream of state.of.the.art products and services. (he
o)+ective is the Juick commerciali3ation of ne- ideas.
: B. 2ow successful the' are/
&H'
Different competitors have different market strategy to advertise
and effectively introduce their certain products.
; A. To what extent is the in&ustr' "lobal/
(hey are in the international market segment that includes
America9 "urope and Asia. Harley.Davidson is one of those e#cellent
companies -hom had challenged traditional ideas.
; B. Are there an' apparent a&vanta"es to bein" involve& in
more than one <.= nation/
>es9 )ecause if a )usiness is engaging in more than one 8!
nation you can have some of the follo-ing )enefitsL
P increase level of demand
P *rand recognition.the product -ill )e easily kno-n to other
regions
P (he customer can easily have access to )usiness in terms of
product maintenance
P Increase of income
P Improvement of Juantity and Juality of the products
.> A. Is the in&ustr' re"ulate&/
1ith regards to the e#portation and importation of the products
the la-s of each country applies in order for them to monitor the goods
-hich enter into their territory.
&9'
.> B. #hat influence &o re"ulations have on in&ustr'
competitiveness/
It has a ma+or influence to the industry )ecause they cannot
operate )eyond the rules and regulations that are )eing implemented
in each area of operation. Another thing is they can also use the fact of
)eing regulated specially )y the government to )e their competitive
advantage if they follo- the la-s that is )eing implemented to
esta)lish a strong foundation in their respective market.
VI. Alternative %ourses of Action
A5AQL (o introduce ne- and enticing product )ased on local market
preference of the target market -hile maintaining the )rand name.
ADFA=(AA"/L
- Innovation can create ne- gro-th segment
- Aain ne- valua)le costumer
- It -ould )e difficult for rivals imitate
- 5reate more a-areness of the product e#istence
DI/ADFA=(AA"/L
- Introducing ne- product -ould )e costly and e#pensive.
- ?isk for the ne- product not to )e successful.
- (heir limited edition product can )e replaced in the market.
&20'
A5AQ2L /trengthen Harleys product advertisement.
ADFA=(AA"/L
- Increase the firm sales.
- ?aises customers product a-areness.
- /erves as a catalyst to re.esta)lish he firm as the prime
dealer of motorcycles.
- "nhance their market competitiveness.
DI/ADFA=(AA"/L
- A stand.out advertisement is costly and e#pensive.
- ;niJue and effective advertising ideas are difficult to produce.
- It may not )e effective to attract local customers.
A5AQ$L Differentiation of the product they are offering in terms of its
features and Juality.
ADFA=(AA"/L
- ,roducts that have distinction provide more value for
customers.
- "#pansion of market segment.
- ;niJue products are difficult for competitors to imitate.
- 5ore competence -ill )e enhanced.
- *rand loyalty is increased.
DI/ADFA=(AA"/L
- Implementation is costly and e#pensive.
&2'
- ?isk of the product not to )e successful.
- It is difficult to come up -ith advantageous and uniJue idea.
- Harley Davidson not to )e a)le to sustain their )rand image.
Alternative %ourses of Action +valuation
#ei"ht

1eig
ht
(he criterion that -ould have this -eight is not the main
focus or consideration for the company as of the current time
frame.
2 (he factor to )e spotted in this particular -eight -ould have
the companys moderate consideration that -ill affect their
decision making.
$ (his -eight means that the company puts a lot of focus and
consideration in this criterion. (hey think that it -ill )e the
companys )est need at the current time conte#t.

!ubrics
5riterion 2 $
,otential impact
on companys
performance.
(here is a great
positive impact
on companys
performance.
(he company is
seeing an
average impact
on this
(he company
have lo- impact
on the
performance of
&22'
alternative and
-ill not
adversely affect
the companys
performance.
this alternative.
"ase of
Implementation
(he decision of
the company to
implement the
actions needed
is not
complicated.
(he decision of
the company to
implement the
actions related
is not that hard
to implement.
(he decision of
the company to
implement the
action is
comple#.
*enefit<5ost
?elationship
(he )enefit that
-ill )e gained
-ould e#ceed
the cost to )e
incurred in a
very significant
percentage.
(he )enefit that
-ill )e gained
-ill or -ont
e#ceed the cost
to )e incurred.
(he )enefit that
-ill )e gained in
the future -ill
)e for a short
period time
only.
/peed of
Implementation
(he
implementation
can )e done
-ithin a short
period of time.
(he
implementation
-ill )e done
)eyond a
reasona)le
duration.
(he
implementation
-ill )e done in a
very long period
of time.
3ecision Matrix
&2$'
Alternative 5ourse of Action =um)er 6ne
5riterion 1eight ?ating /core
,otential impact
on 5ompanys
performance
$ 2 2
"ase of
Implementation
2 2
*enefit<5ost
relationship
2 2 0
/peed of
Implementation
2 $ 4
(otal ?ating $4
Alternative 5ourse of Action =um)er (-o
5riterion 1eight ?ating /core
,otential impact
on 5ompanys
performance
$ 2 2
"ase of
Implementation
$ $
*enefit<5ost
relationship
2 $ 4
/peed of
Implementation
2 $ 4
(otal ?ating $0
Alternative 5ourse of Action =um)er (hree
5riterion 1eight ?ating /core
,otential impact
on 5ompanys
$ 2 2
&20'
performance
"ase of
Implementation
$ $
*enefit<5ost
relationship
2 $ 4
/peed of
Implementation
2 $ 4
(otal ?ating $0
VII. !ecommen&ation
Harley Davidsons pro)lem on its product line -ith respect to the
competitiveness can )e resolved using A5AQ. (his only means that
the company must introduce a ne- yet enticing product -hile using
the preference of their target local market as a )asis for innovation9 at
the same time9 HD must maintain their )rand image. Another thing is
they -ill satisfy the customers demand in line of motorcycle especially
todays consumers preference are rapidly changing. %astly9 it -ill
)ecome a competitive edge over its competitors offering a consumer
preferred unit having a Harley Davidson Juality and style.
VIII. %onclusion
(hus9 -ith all the given arguments and considerations mentioned
a)ove9 introducing ne- and enticing product )ased on the local
preference of their target market -hile maintaining the )rand image.
&22'
(his gives HD a competitive edge over its competitors: it -ill also serve
as a catalyst for their eventual dominance of the motorcycle industry.
I). 3etaile& Action *lan
(ime Grame ,erson
?esponsi)le<Depar
tment 5oncerned
Activities *udget
day Beith 1andell9
/ecretary
/cheduling a
meeting together
-ith the
marketing
department to
discuss their
chosen solution in
the pro)lem
-hich is
introducing a ne-
product of Harley
Davidson
.2 days /ecretary ,reparation of the
documents
needed for the
meeting
day Marketing
Department
Meeting -ith the
top and lo-er
management
especially -ith
the product
&24'
development
team for the ?RD
plan on
identifying the
local market
preference
.4 months Marketing
Department
together -ith the
,roduct
Development
(eam
/tart and
finali3ation of the
gathered data on
the research and
development
-eek Beith 1andell9
,roduct
Development
(eam
Discussion of the
ne- product to )e
introduce in the
market and
forecasting of
product
development cost
that -ill )e
possi)ly incurred
)y the company
.2 days /trategic *usiness
;nit
Ginali3ation of the
needed capital for
the proposed
product
development
S009000900
0
.0 months ,roduct
Development
(eam
?esearch and
Development that
-ill )e done )y
the team to start
the formulation of
S90009000
&27'
plans for the
propose product
.2 days
Beith 1andell9
,roduct
Development
(eam9 Marketing
Department
Meeting to
discuss the
proposal done )y
the team and its
approval
$ days Beith 1andell and
the Department
head
Dissemination of
information of the
propose product
development
month 5hief Ginance
6fficer
Meeting -ith
possi)le investor
and other
Ginancing services
firm
-eek ,roduction Head Discussion of the
materials needed
and the its
incremental cost
day ,roduction Head /u)mission of the
report for the
pro+ected cost of
production
.2 days Beith 1andell Approval of the
pro+ected
production and
development cost
.2 months ,roduction
Department
5ommencement
of the production
of the ne-ly
develop product
S$29000900
0
&2H'
.2 months Muality 5ontrol
Department
(esting9
monitoring9
evaluating of the
ne-ly develop
product
S290009000
2 months Beith 1andell9
Marketing
Department
Meeting for the
launch and
continues
advertisement of
the product
$ months Marketing
Department
/tart of product
launch and
advertisement
S90009000
Muarterly
/emi.annually
Annually
Beith 1andell and
(op Management
/ales and ,roduct
performance
"valuation
). ?inancial Anal'sis
3ebt !atio
2009
7007000 < 9222H T 74.97I
200H
$90HH7 < 7H2H422 T .2 or 20I
2007
2099922 < 2424404 T $7.2I
&29'
%urrent !atio
2009
0$0909<224H220 T .90
200H
2$77HH < 240$727 T 2.04 times
2007
$047$0 < 902079 T .H2 times
Aci& Test !atio
2009
H99H00<0$0909 T 0.0$72
200H
829$22H N 00090H! < 240$727 T .$H times
2007
8002H20 N $09497! < 902079 T .00 times
!OA <!eturn on Investment in Assets=
200H
4207H < &87H2H422 N 2424404! < 2'
4207H < 470242.2 T 9.7I
2007
9$$H0$&82424404 N 22$220! < 2'
9$$H0$ < 2290$7H T 4.49I
!O+ <!eturn on Investment on +@uit'=
&$0'
200H
4207H&82240$ N 2$7209! < 2'
4207H < 2202207 T 29.4I
2007
9$$H0$&82$7209 N 27247$7! < 2'
9$$H0$ < 22440 T $4.0I
+@uit' !atio
2009
20HH<9222H T 0.2$02
200H
2240$ < 7H2H422 T 27.02I
2007
2$7209 < 2424404 T 02I

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(echnological Institute of the ,hilippines
9$H Aurora *oulevard 5u)ao Mue3on 5ity
85A/" A=A%>/I/!
,resented and /u)mitted )yL
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