Strategic Audit of Harley Davidson

Harley Davidson

We have decided to address problems and causes within the Harley Davidson Company by using a strategic audit which will explain past, present and future trends within this organization.

I. Current Situation

A. Current Situation

Excellent financials, low debt load, 2001 was the 16th consecutive year with record performance. Price/earnings ratio is positive.

Ð'* World wide retail for 4th quarter 12.9% growth over year 2000.

Ð'* Forbes named Harley-Davidson its "Company of the Year" for 2001.

Ð'* Selected by Business Week as on of the nation's "Most Admired Companies."

Ð'* Projected sales figures for 2003 look strong.

B. Strategic Posture

1. Mission

Ð'* The mission of this company is to "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." Harley-Davidson wants to have happy customers that will continue to buy this brand for life. Their vision states that they are an "action oriented international company," and that they are committed to improving its relationships with stakeholders. They believe that through balancing their stockholder's interests and the "empowerment" of employees to concentrate on valued activities they will find success and continue to be successful. Buell mission statement "is to develop and employ innovative technology to enhance the ride and give Buell owners a motorcycle experience that no other brand can provide."

2. Objectives

Ð'* Buell motorcycle products emphasize innovative design, responsive handling, and overall performance.

Ð'* Design, manufacture, and sell premium motorcycles for the heavyweight market.

Ð'* Emphasized traditional styling, design simplicity, durability, ease of service, and evolutionary change.

Ð'* Straddle class boundaries.

Ð'* Market targets four segments, standard, which emphasized simplicity and cost; performance, which emphasized handling and acceleration; touring, which emphasized comfort and amenities for long-distance travel; and custom, which emphasized styling and individual owner customization.

Ð'* "It is a legacy forged by generations of people with a passion for motorcycling, a commitment to honor land build on the past, and determinations to seek out new opportunities for the future."

Ð'* View research and development as significant in its ability to lead the market definition of touring and custom motorcycling and to develop product for the performance segment.

Ð'* Manufacturing strategy was designed to increase capacity, improve product quality, reduce cost, and increase flexibility to respond to changes in the marketplace.

Ð'* Harley-Davidson Financial Services, Inc. has a competitive advantage which offers wholesale and retail financial services, which has little or no competition.

3. Strategies

Ð'* With the acquisition of Buell Harley-Davidson will enter the European sport/performance market which is four times larger than the U.S.

Ð'* In 1996 H-D announced it will discontinue the operations of the Transportation Vehicles segment in order to concentrate its financial and human resources on its core motorcycle business.

Ð'* Use web based information technology to streamline its supply-chain management.

Ð'* Research and development unveiled in 2001 the V-rod in order to appeal to the younger, affluent rider, and international markets.

4. Policies

Ð'* Emphasize innovative design, responsive handling, and overall performance.

Ð'* Providing to motorcyclists and to the general public an expanding line of motorcycle, branded products and services in selected market segments.

Ð'* Design, manufacture, and sell premium motorcycles for the heavyweight market.

Ð'* Offer traditional styling, design simplicity, durability, ease of service, and evolutionary change.

Ð'* Management provides a variety of services to its dealers and retail customers, including service training schools, customized dealer software packages, delivery of its motorcycles, and owners' club membership, a motorcycle rental program, and a rider training program.

II. Strategic Managers

A. Board of Directors

1. Presently nine members who will be reduced to eight-there are seven outsiders.

2. Well-respected Americans, elected to board from 1982 through

1997.

3. Divers backgrounds from marketing, sales, finances, telecommunications, engineering, manufacturing, distribution, and International experience.

4. By 2005 a number of the directors will not be eligible for reelection.

B. Top Management

1. Was one of 13 managers who bought out Harley-Davidson from AMF in 1981?

2. Very experienced in the industry, with AMF since 1970.

3. Chairman and CEO since 1997.

4. Vastly responsible for current situation.

III. External Environment (EFAS Table; see Exhibit 1)

A. Societal Environment

1. Economic

a. Despite the global economic downturn, H-D achieved its 16th consecutive year of record revenue and earnings.

b. Licensing the H-D brand name has enhanced the corporate image with customers.

c. International sales have increased since 1999.

d. H-D has begun selling parts and