Harley Davidson Case Analysis

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Harley Davidson Case Analysis

In 2007, Harley Davidson was the world’s most profitable motorcycle company. They had just released great earnings and committed to achieve earnings per share growth of 11-17% for each of the next three years. Their CEO of 37 years, James Ziemer, knew this would be an extremely difficult task seeing Harley’s domestic market share recently top off at just under 50%. The domestic market was where Harley’s achieved the most growth over the past 20 years and with it leveling off, where was Harley going to get the 11-17% was the million dollar question.

Harley Davidson has built a brand that is more than just the spread eagle on a load rumbling motorcycle, but for those who purchase a Harley they are purchasing a lifestyle, an experience, or piece of American culture if you will. Due to this differentiating factor Harley has been able to charge a premium for its products and still be successful against its lower priced competition. Harley built upon this lifestyle when it created the Harley Owners’ Group (HOG). Harley would promote shows, rallies and rides through HOG in the US and even in other countries. This helped to build its coveted image into more of an exclusive club.

In the 1990’s, Harley Davidson saw tremendous growth and looked for resolutions to its one problem of balancing production with its soaring demand. In 1996, Harley announced “Plan 2003”. “Plan 2003” was a huge undertaking to increase its production capacity, introduce several new models and increase international expansion. At the end of this planned expansionary period, Harley’s sales had grown tenfold over just 23 years. However in 2007, domestic demand was starting to slip, as several economical factors...

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...ties across Europe. The advertising would more than pay for itself by increasing Harley’s sales volume. The new motorcycle developed with the European rider in mind would better compete with the other major producers in Europe.

Third, I would implement an advertising plan in several major cities throughout the US focusing on Harley’s fuel efficient motorcycles and the pride in owning a Harley. With the fuel prices around $4 a gallon, there truly is no better time to own a motorcycle, so why not a Harley? I believe motorcycle sales will increase as gasoline prices increase, so it shouldn’t be difficult to recoup the expense of any advertising.

In conclusion, I feel Harley can achieve it growth goals by reducing component manufacturing costs, improving its product offering in Europe and through a smart advertising plan in both North America and Europe.

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