Harley Davidson Case Study

Executive Summary

In 2004 Harley Davidson’s CEP, Jeffrey Bleustein stated that HD’s earnings growth rate should fall in the mid-teens for the foreseeable future and the company is expected to increase unit sales to 400,000 units by 2007. This was following the “Open Road Tour” that ended on Memorial Day in 2003 in Harley’s hometown of Milwaukee, Wisconsin. The tour drew in massive amounts of crowds of Harley owners. The tour had five stops in North America and additional stops in Australia, Japan, Spain, and Germany. Up until this point the company’s revenues had grown to $4.6 billion dollars. HD sold more than 290,000 motorcycles in 2003 which gave them the commanding share of 651+cc motorcycle market in the US and the leading share of the market Asia/Pacific.

Jeffrey’s Bleusteins plan is very dependent on aging baby boomers. Harley Davidson has already achieved its record growth during the 1990s and early 2000s through the appeal of the image to baby boomers. The oversupply of HD in certain models mixed with a market focus on a narrow demographic group left HD gaining market share in Europe but short-term forecasting problems led to an overall sell off of HD shares in 2004.

SWOT

Strengths

 Robust Cash Flow

 Strong Market position and brand image

 Strong marketing department, which sponsors and participates in all major motorcycle consumer shows and rallies.

 Strong relationships built on trust and respect with suppliers and dealers.

 Harley Davidson operates in two principal business segments:

o Motorcycles and Related Products, and Financial Services.

 Harley Davidson is the only major American motorcycle manufacturer.

 The Harley Owners Group (HOG) is the industry’s largest company sponsored motorclycle enthusiast organization which currently has approximately 750,000 members worldwide.

 Harley Davidson offers customers the opportunity to customize their bikes.

Weaknesses

Opportunities

 The international heavy weight market is growing and is now larger than