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 public has overcame this mentality lately since one in three Harley buyers are professionals or managers, and the average household income of buyers is $78,000. One weakness they have is the high prices of their models when compared to their Japanese counterparts. It seems that they could increase their market share if they could produce a less expensive model without compromising the quality of the model. A major strength they have is their name recognition and the activities available for Harley owners to interact with each other. Groups such as the Harley Owner's Group (HOG), and the Buell Riders Adventures Group (BRAG) often sponsor rallies for their members.

In this paper we will perform a complete analysis of the Harley-Davidson Corporation including their corporate and business strategies, strengths and weaknesses, environmental opportunities, the five industry forces, and financial situation. Harley-Davidson has many attributes, which will be apparent in the following analysis. The paper will attempt to define the different components of the analysis and put them all together in a way that seeks to explain the way that they contribute to the overall success of the company and its stakeholders.

Harley Davidson has used many different types of strategies to become one of the most well-known and productive motorcycle companies in the world. The Business Level Strategy that they tend to use the most is the Integrated Cost Leadership/Differentiation. As far as their Corporate Level Strategy, they tend to favor the Related Diversification Strategy.

Harley Davidson's use of the Cost Leadership/Differentiation as a Business Level Strategy has proven highly successful since they have been in business. They have always tried to differentiate themselves from everyone else in the motorcycle industry, as well as trying to provide one of the best bikes in the business at the lowest possible cost. Harley Davidson has two different companies built into one. The first of the two companies produces motorcycles at competitive prices against their competitors. Harley Davidson demands high standards of quality and efficiency and demand lower costs, which will add to a higher quality less expensive motorcycle. These savings are in turn then passed on to their customers. They know that most customers cannot afford to have their motorcycles customized because this is a very expensive process. Harley Davidson has done extensive research to find out information about their average customer. Most people tend to believe that the average motorcycle consumer is a leather clad tattooed man running the world, but Harley Davidson concluded that the average motorcycle consumer is a married, college educated, 38 year-old male earning $44,250 a year, and his average income is increasing. Research also shows that females represent 10% of the new purchasers. The second company that Harley Davidson implemented is the Costume Vehicle Operations or CVO. This company specializes and customizes the motorcycles to suit the individual owner. Harley Davidson also offers genuine parts and accessories so Harley owners can customize their own motorcycles. The CVO tries to use the differentiation strategy to beat out its competitors. The customization of a motorcycle can prove to be very expensive and time consuming, but Harley Davidson knows that what good is a bike if you cannot show people who you really are. The customers are willing to wait an average of 1 year after placing their order to receive their customized motorcycle. Every other motorcycle manufacturer is trying to imitate Harley and their products. Harley has the top of the industry manufacturing process with large state of the art factories, and distribution, with many small and personalized, to market dealers, who sell their products. Integrated Cost Leadership/Differentiation Strategy is the primary Business Level Strategy that Harley Davidson incorporates.

Harley Davidson's Corporate Level Strategy tends to favor the Related Diversification Strategy. Their two primary businesses are related to each other in some manner or another. The two divisions, CVO and the Competitive Price Division, are related by using the same suppliers. Although the two divisions serve two totally different responsibilities to the consumers, they are truly related in their strengths to differentiate themselves from all the other competition. Harley Davidson does not do much promotion at the corporate level. Primarily,