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Harley-Davidson: External and Internal Analysis
Harley-Davidson: External and Internal Analysis
Harley davidson concern for survival, growth and profitability
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Harley-Davidson Inc. Celebrating their 100th anniversary next year, Harley-Davidson is a true American success story. From their modest beginnings in Milwaukee, Wisconsin to one of the most recognized company names worldwide, they have been passionate about motorcycles. Harley offers an experience like none other with the one of a kind look, feel, and sound only available on a Harley. Besides their main business of building and selling motorcycles, they have began to offer financing and insurance through Harley-Davidson Financial Services, and they also offer a full line of accessories and apparel to make the Harley experience complete. Harley-Davidson, the corporation, has many things to brag about. On top of their financial success over the years, they have built a solid reputation as a fair, honest, and caring company. In January 2002, Forbes magazine named Harley-Davidson its “Company of the Year for 2001and in February, Fortune magazine selected them as one of the nation’s “Most Admired Companies.” Every employee at the company can be proud of these achievements because the corporate culture stresses the importance of all employees. While maintaining a level of success in these areas, they have managed to increase their revenues for the last sixteen years straight. Even in the economic downturn of the last year, Harley-Davidson posted record revenue and earnings. Harley-Davidson states their mission as “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.” They have performed wonderfully over the past hundred years, and have not forgotten their mission or where they came from. Over the years they have stuck with the things they know, and also expanded into related services and products. Out of the 151 motorcycle manufacturers, Harley-Davidson and Indian were the only two companies to survive the Great Depression. Harley-Davidson was the only one in America after Indian dropped out in 1953, but face Indian again now since they re-entered the market in 1999. Harley-Davidson owns a twenty percent market share followed closely by Honda, Yamaha, and Kawasaki. One thing they have had to overcome in the marketplace is the stereotypical image associated with motorcycle owners. It seems the publ... ... middle of paper ... ...Tot. Debt to Equity .27 .46 Amount Borrowed/ Equity Activity: Inventory Turnover 12.98 7.87 Move inventory quickly Asset Turnover 1.20 1.26 Effective utilization of assets Receivables Turnover 4.91 6.71 Collection of receivables / year Net Inc. / Employee 57,157 28,241 Utilization of people Breakeven Analysis: Assumptions: 1) Total Variable Costs are 60% of Total Costs; While the other 40% are from fixed costs. 2) All units cost the same to produce and sell for the same price. Breakeven Point: Total Revenue (TR) = $3,363414000 Total Variable Cost (TVC) = $1,310,045,400 Total Fixed Costs (TFC) = $873,363,600 Total Cost (TC) = $2,183,409,000 Average Variable Cost (AVC) = $5,587.48 per unit Quantity Produced (Q) = 234,461 Profit () = 1,180,005,000 Price (P) = $14,345.30 per unit 99,723.83 = 99,724 units Required Profit Analysis: Assume required profit is equal to selling, general and administrative expenses so after expenses they will breakeven. Required profit = $578,777,000 165,810.74 = 165,811 units
When one thinks of classic Americana, they reminisce about the 1970s and 1980s and the notion of the nostalgic past in terms of what is the classic American image. It was a time of economic prowess where the blue collar factory worker would work 9 to 5 and then go to the local bar with his coworkers. However, times have since changed. The industrial plants that once dominated the Great Lakes economic region has become a shell of its past to the point where it is now none as the Rust Belt as industry left and white collar jobs became the norm. Since this degradation has settled into this once industrial cities, many cities and companies have sought to rebrand themselves in order to build from their reputations in the past to appeal to the nostalgia felt today. One such case where these is a correlation between a company and city are that of Harley Davidson, founded 1904, and Milwaukee, Wisconsin. Both have sought to rebrand themselves to the public and consumer, with Milwaukee seeking to transformation its image into that of a young and vibrant and city while Harley targets a new clientele. It is this shift to Harley’s "cult branding" to attract new clients that parallels Milwaukee's attempts to integrate itself to a service sector economy based on touristic leisure and the consumption of
The founhder of the company, Godfrey Keebler, started with jus a small bakery in Philadelphia, PA in 1853. During the next two generations, local bakeries popped up around the country, including Strietmann, Hekman, Supreme and Bowman. With the introduction of cars and trucks (carrying the Keebler logo), bakery goods could be distributed beyond the neighborhood and regional distribution began.
Taming the wildest of these bucking broncos is not for the faint of heart as certain iterations of these freaks of nature pack more than the combined power of 500 of their animal name sakes. With such ridiculous levels of performance, clearly geared at a small percentage of owners capable of controlling such ferocity, Ford and Chevy are left with the daunting task of developing a marketing strategy that attracts a larger consumer base capable of profiting from an otherwise niche product. The strategies employed by both manufacturers encompass many similar aspects both of which ultimately convey a similar...
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.
Allstate insurance is the second largest property and casualty insurance company by premiums in the United States. Allstate insurance handles about 12% of the U.S home and auto insurance market. (Allstate, 2014). Many of Allstate’s customers fall under what one could refer to as a traditional selection of insurance for automobiles. Recently, Allstate has noticed a major shortcoming in lifestyle insurance, which includes coverage for motorcycles, boats, and other recreational vehicles, in comparison to its competitors. The motorcycle insurance sector is a 10.4 billion dollar industry and growing (PRWEB, 2012). The U.S. Department of Transportation website reports some astounding figures, including that 5,370,035 motorcycles were registered three years before the article, 7,138,476 motorcycles registered at the time of the article, and grew to 9,477,243 registered motorcycles at the end of 2012 (NHTSA, 2013). It is obvious as to why Allstate would identify motorcycle insurance as a worthy lifestyle product to devote marketing research dollars into in order to develop new strategies for cornering a share of the market.
FORBES MAGAZINE names Harley-Davidson Company of the Year (December 20, 2001) “Harley-Davidson, Inc. has been named Company of the Year by FORBES Magazine, one of the worlds leading business publications.” Key factors for the FORBES Company of the year award included Harley-Davidson’s record sales growth and earnings, along with strong overall financial performance. This is due to the great strides in engineering and development, along with the respect of the American people for an outstanding American company.
...es how powerful of a symbol it has become. You wouldn’t consider the fact that someone drives a Honda Accord a defining characteristic of his or her identity but somehow that changes when it becomes a Harley Davidson Heritage Softtail. "Four wheels move the body two wheels move the sole" (Harley Davidson Ad/ 1992). It becomes clear that the motorcycle is much more than a vehicle; it is a manifestation of American values. When you break it down nothing seems more American that freedom, and brotherhood. Film has fully capitalized on these characteristics helping make the motorcycle a powerful image that has had a defining impact on American culture.
Variable costs: “Variable costs are costs that vary with the volume of activity”2 and they are: direct labor, Materials, Material spoilage & direct department expenses.
"Harley-Davidson: At Last" as presented in Hartley's Marketing Mistakes and Successes presents the circumstances around HD's near collapse and since rinse to near mythic success. This case is a great example of marketing myopia; HD saw them-selves as full-size motorcycles' manufactures, not in the transportation, or even the entertainment industry. They believed no one bought motorcycles for transportation, but rather for leisure time use.
$384 per unit or "mark up" of 47% vs $764. per unit or "mark up" of 94% (not really a mark up, fixed costs not included).
Founded in 1905, the Harley-Davidson Motor Company was the only motorcycle manufacturer in the U.S after Indian Motorcycles closed down back in 1953. The American “Motorcycle culture” grew between the 1950’s and ‘60s. This was influenced by movies such as “wild ones” and “Easy Rider”, which helped equate the Harley-Davidson with a lifestyle of a motorcycle outlaw who were perceived as to...
Polaris, a manufacturer of snowmobiles and ATV's, saw the sales Harley Davidson was enjoying and decided to enter the heavy cruiser market. It created its own Victory line and then acquired the old Indian brand in 2011. As each year passed, Victory's product line has grown in popularity, mostly at the expense of Harley Davidson. The lesson here is that you can never rest on your laurels. Just because you have a cult following, and Harley owners are seriously brand loyal owners, it does not mean that you have control of the market forever. The more successful you are, the more the competition targets your brand. In fact, takeover speculation continues to
In this paper the topic of the Triumph Motorcycle Company’s history will be covered from the very first motorcycle Siegfried Betteman and Muaritz Schulte Betteman built; to the motorcycles the new owner John Bloor and his 600 employees are building at the Hinkley factory in Great Britain. Triumph Motorcycle Company has been overly concerned about the quality and performance of the bikes that leave the shop. With their concern, the company that started from strapping a motor to the downpipe of a bicycle has made it through two world wars and a depression. They changed that simple concept to a highly engineered and well thought out quality bike.
Italian manufacturer Piaggio ranks as one of the world’s top four players in its core business. It has consolidated leadership in the European 2-wheeler market. Piaggio should not miscalculate its competitors. Competition in the industry is very powerful, not only nationally but internationally as well. This is due to two well-established companies in this sector which are the Japanese Yamaha and Honda. Yamaha and Honda strengths are their long-run experience in the sector and the high quality image of products. Due to participations to the motorcycle championships, these two companies constantly receive positive feedbacks to their efforts in researching for first class products. In the future, other kinds of competitors are expected to arise: Chinese companies whose ability to imitate and create similar products at highly competitive prices is getting more and more dangerous (Piaggio, 2008)
KTM is an on and off-road motorcycle manufacturing company that has established itself as a player in the European off-road industry with a 13% market share. The European motorcycle market in general has been in decline for the past three years and is forecasted to have even slower growth in the coming years. The off-road market in America, however, has much more potential than Europe because of its open spaces and the sport’s continued rise in popularity. Currently, the CFO of KTM is facing the challenge of achieving the growth needed to facilitate BC European Capital’s exit from its 49% stake in the company. While analysts favor a merger with Ducati, KTM executives also have the option of growing in-house. KTM should look to the growing off-road market as a means for growth in-house and should therefore avoid a merger with Ducati just as the company avoided a deal with Harley-Davidson because not enough synergies exist.