Presented To: SIR.

ZAFAR MANNAN

Presenter RANA SOHAIL AHMED SP09-MM-0059

Harley-Davidson
Type Founded Founder(s) Public (NYSE: HOG) 1903 William S. Harley Arthur Davidson Walter Davidson William A. Davidson Milwaukee, Wisconsin United States Keith E. Wandell, CEO Motorcycles US$4.29 Billion (FY 2009) US$70.6 million (FY 2009) 9,700 (2006) www.harley-davidson.com

Headquarters Key people Products Revenue Operating income Employees Website

Mission Statement says: We fulfill dreams through the experiences of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles, branded products and services in selected market segments Vision Statement says: Harley-Davidson is an action-oriented, international company, a leader in its commitment to continuously improve [its] mutually beneficial relationships with stakeholders (customers, suppliers, employees, shareholders, Government, and society). HarleyDavidson believes the key to success is to balance stakeholders interests through the empowerment of all employees to focus on value-added activities.

EFE MATRIX
Key external factors OPPORTUNITIES Weight Rating Weighted score

The European demand for Harley Davidson is the highest in the international market and represents the single largest motorcycle market in the world The international heavy weight market is growing and is now larger than the U. S. heavyweight market Women and younger riders are increasing becoming interested in bikes Market share increasing in Europe and Asia for the last two years Increasing demand in US markets for bikes Customers value quality parts
THREAT

0.15

0.6

0.15

0.6

0.1 0.1

3 3

0.3 0.3

0.1 0.025

2 1

0.2 0.025

Harleys ongoing capacity restraints caused a shortage supply and a loss in domestic market share in recent years Harleys average buying age is 42 years old and increasing The European Unions motorcycles noise standards are more stringent than those of Environmental Protection Agencies in the U.S and increased environmental stand Some competitors of Harley Davidson have larger financial and marketing resources and they are more diversified Environmental protection laws Buell division needs to continue to produce a quality motorcycle under Harleys brand name
TOTAL

0.15

0.6

0.1 0.025

3 3

0.3 0.075

0.025

0.05

0.025 0.05

4 1

0.1 0.05

3.2

CPM
HARLEY CRITICAL SUCCESS FACTORS Weight Rating Weighted Weight Score 4 4 1 0.6 0.6 0.1 HONDA Rating Weighted Weight Score 3 3 3 0.6 0.15 0.45 YAMAHA Rating Weighted Score 4 3 3 0.6 0.075 0.75

Advertising Product Quality Price Competitiveness Management Financial Position Customer Loyalty Global Expansion Market Share
TOTAL

0.15 0.15 0.1

0.2 0.05 0.15

0.15 0.025 0.25

0.025 0.1 0.15

3 2 4

0.075 0.2 0.6

0.03 0.14 0.06

4 4 2

0.12 0.56 0.12

0.05 0.335 0.15

2 3 2

0.1 1.005 0.3

0.025

0.075

0.05

0.2

0.02

0.06

0.3 1

0.6 2.85

0.32 1

0.96 3.16

0.02 1

0.04 2.93

KEY EXTERNAL FACTORS STRENGTHS

WEIGHT

RATING

WEIGHTED SCORE

Net income of 2003 was $760mn, its more than 30% as compared to the previous year 2002 The standard and performance segments of Harley Davidson make up 70% of the European heavy weight motorcycle market Harley-Davidson operates in two segments: Harley-Davidson motorcycles & related products and HDFS (Harley-Davidson Financial Services)

0.15 0.09 0.025

3 3 4

0.45 0.27 0.1

IFE Matrix

Harley-Davidson is the only major American heavyweight motorcycle manufacturer Strong brand name The HOG (Harley Owners Group), which have a 7,50,000 members world wide is the industrys largest company sponsored motorcycle enthusiast organization Buell Riders Adventure Group (BRAG) was also formed recent Customization of the bikes, this is Harley-Davidsons major revenue maker Harley-Davidson have a good marketing division and its divided as dealer promotions, customer events, magazine and direct-mail advertising, and public relations WEAKNESS High price Harley-Davidson has problems in gaining more market share in some European countries (Thats one of the main markets for Heavyweight motorcycles outside U.S). They didnt yet start its sales in India, one of the biggest markets Required production is not met, analyzing the future of Heavyweight motorcycle market TOTAL

0.1 0.15 0.05

4 4 2

0.4 0.6 0.1

0.025 0.025 0.025

2 3 2

0.05 0.075 0.05

0.15 0.06

2 3

0.3 0.18

0.1 0.05 1

3 4

0.3 0.2 3.075

OPPORTUNITY

SWOT MATRIX
ST Strategy

THREAT

SO Strategy:

EXPAND PRODUCTION TO EUROPE Strength

INCREASE STRONG BRAND NAME

EXPAND PRODUCTION TO ASIA

INCREASE MARKET TO YOUNGER CUSTOMER

WO Strategy

WT Strategy

IMPROVE EMPLOYEE RELATIONSHIP

GRAND STRATEGY MATRIX

STRATEGY: MARKET DEVELOPMENT, MARKET PENETRATION, PRODUCT DEVELOPMENT, HORIZONTAL INTEGRATION, DIVESTITURE, LIQUIDATION.

SPACE Matrix
Financial Strength (FS) Return on Investment Leverage Liquidity Working Capital Cash Flow Inventory Turnover Earnings per Share Price Earnings Ratio

Environmental Stability (ES) 2 3 4 2 5 3 3 2 Technological changes Rate of Inflation Demand variability Price range products of competing
-2 -3 -6 -2 -6 -4 -3 -2 -2 -30

Barriers to entry into market Competitive pressure Ease of exit from market Price elasticity of demand Risk involved in business

Total Competitive Advantage (CA) Market share Product quality Product life cycle Customer Loyality Competition's capacity utilization Technological know-how

24

Total Industry Strength (IS)

-1 -1 -3 -1 -4 -1 -2 -13

Growth potential Financial stability Technological know how Resource utilization Ease of entry into market Productivity, utilization capacity

3 3 5 4 6 4

Control over suppliers & distributors Total

Total

25

Average value for FS = 3 Average value for CA = -1.85 Average value for IS = 4.17 Average value for ES = -3.33 Point on X axis = (-1.85+4.17)/2 = 1.16 Point on Y axis = (3-3.33)/2 = -0.165 Strategies:

STRATEGY: BACKWARD INTEGRATION, FORWARD INTEGRATION, HORIZONTAL INTEGRATION, MARKET PENETRATION, MARKET DEVELOPMENT, PRODUCT DEVELOPMENT.

I.E MATRIX
EFE: 3.2 IFE: 3.075

STRATEGY: BACKWARD INTEGRATION, FORWARD INTEGRATION, HORIZONTAL INTEGRATION, MARKET PENETRATION, MARKET DEVELOPMENT, PRODUCT DEVELOPMENT

BCG MATRIX
RELATIVE MARKET SHARE: 48% GROWTH RATE: 13.029

STRATEGY: MARKET PENETRATION, MARKET DEVELOPMENT, PRODUCT DEVELOPMENT, DIVESTITURE.

J.V EUROPE STRENGTH WEIGHT AS TAS 3 3 AS 0.225 0.135

J.V ASIA TAS 3 2 0.225 0.09

Net income of 2003 was $760mn, its more than 30% as compared to the previous year 2002 The standard and performance segments of Harley Davidson make up 70% of the European heavy weight motorcycle market Harley-Davidson operates in two segments: Harley-Davidson motorcycles & related products and HDFS (Harley-Davidson Financial Services)

0.075 0.045

0.0125

0.05

0.0375

QSPM

Harley-Davidson is the only major American heavyweight motorcycle manufacturer Strong brand name The HOG (Harley Owners Group), which have a 7,50,000 members world wide is the industrys largest company sponsored motorcycle enthusiast organization Buell Riders Adventure Group (BRAG) was also formed recent Customization of the bikes, this is Harley-Davidsons major revenue maker Harley-Davidson have a good marketing division and its divided as dealer promotions, customer events, magazine and direct-mail advertising, and public relations
WEAKNESS

0.05 0.075 0.025

4 4 2

0.2 0.3 0.05

4 2 3

0.2 0.15 0.075

0.0125 0.0125

2 3

0.025 0.0375

4 3

0.05 0.0375

0.0125

0.025

0.025

0 0.075 0.03 2 3 0.15 0.09 2 3 0.15 0.09

High price Harley-Davidson has problems in gaining more market share in some European countries (Thats one of the main markets for Heavyweight motorcycles outside U.S).

They didnt yet start its sales in India, one of the biggest markets Required production is not met, analyzing the future of Heavyweight motorcycle market OPPORTUNITIES The European demand for Harley Davidson is the highest in the international market and represents the single largest motorcycle market in the world The international heavy weight market is growing and is now larger than the U. S. heavyweight market Women and younger riders are increasing becoming interested in bikes Market share increasing in Europe and Asia for the last two years Increasing demand in US markets for bikes Customers value quality parts THREAT Harleys ongoing capacity restraints caused a shortage supply and a loss in domestic market share in recent years Harleys average buying age is 42 years old and increasing The European Unions motorcycles noise standards are more stringent than those of Environmental Protection Agencies in the U.S and increased environmental stand Some competitors of Harley Davidson have larger financial and marketing resources and they are more diversified Environmental protection laws Buell division needs to continue to produce a quality motorcycle under Harleys brand name

0.05 0.025

3 4

0.15 0.1

3 4

0.15 0.1 0

0.075

0.3

0.15

0.075 0.05 0.025 0.1 0.0125

4 3 3 2 1

0.3 0.15 0.075 0.2 0.0125

3 4 4 3 2

0.225 0.2 0.1 0.3 0.025

0.075 0.025 0.0125

4 3 3

0.3 0.075 0.0375

3 2 2

0.225 0.05 0.025

0.0125 0.0125 0.025 1

2 4 1

0.025 0.05 0.025 3.0875

3 2 2

0.0375 0.025 0.05 2.7925

RECOMMENDATION Expand European and Asian market. Increase the sales of Buell sport bike and HarleyDavidson to younger customers and females. Horizontal diversification: acquires or develops new products that could appeal to its current customer groups even though those new products may be technologically unrelated to the existing product lines. Concentric diversification: Bring in new recreational vehicles.

Thank You!