Briefly Information of Company

Harley Davidson is one of the best motorcycle producer in world. This company not only produce motorcycle but also produce boat, t-shirt, bag, leather Jacket ,helmet and kind accessories, etc. Thanks to selection HD ,their customer’s life style obvious that show their freedom.

History of HD

1901–William S. Harley, age 21, completes a blueprint drawing of an engine designed to fit into a bicycle.

1903 – William S. Harley & Arthur Davidson (Walter) 1909 – First V-twin powered bikes, it became most enduring icons of

Harley Davidson history.1917 – 1/3 rd of the bikes were sold to the U.S military, at last 20,000

HD bikes were used in World War I (1918).1920 – HD dealerships spread across 74 countries.

1930–Bill Davidson, Jr. wins the Jack Pine endurance contest with 997 points of 1,000.

1943–Harley-Davidson receives the first of its four Army-Navy "E" Awards for excellence in wartime production.

1955–Harley-Davidson produces almost 60,000 WLA models during the war for military use.

1987 – Entered into American & New York stock exchanges.

1998–A new assembly facility opens in Manaus, Brazil, the first operations outside of the U.S.

2001 – Two big plants constructed in Milwaukee & Kansas cities.

History of HD

History of HD

2004–HD recorded its 19th consecutive year of record earnings

2009– Harley-Davidson announces expansion into India.

2010–The XL Forty-Eight is introduced, recalling the raw, custom Sporters of earlier days.

Harley is the only major American Manufacturer of heavy weight motor cycles.

Have more than 15,000 employees.

Product extensions

Motor Cycles

Bike accessories

Buell motor cycles: wholly owned subsidiary of Harley by 2003 (closed now)

Brand extensions Merchandise• Helmet• Boats• Clothes (Jackets…) • Mugs• Collectibles….• Lighter• Watch Beer

Bars

Harley - Davidson presents two new models this year – one for men and one for women ...

We fulfill dreams through the experience of motorcycling,

by providing to motorcyclists and to the general public an expanding line of

motorcycles, branded products and services in selected market segments.

Mission

PROPOSED MISSION

“Constantly renewing ourselves and offer our

customers the best motorcycle experience without compromising

the quality.To be branded as the best

motorcycle available in the world.”

Vision

HD, is an action-oriented, international company, a leader in its commitment to continuously improve our mutually beneficial relationships

with stakeholders (customers, suppliers, employees, shareholders,

governments and society). HD believes the key to success is to balance stakeholders’ interests through the empowerment of all

employees to focus on value-added activities.

PROPOSED VISION

“Always be competitive and continuously improving our customer satisfaction, increasing dynamic, diverse and global market” The best quality motorcycle, motorcycle products and financial services will be provided world wide is the commitment of Harley Davidson. The total team effort of Harley Davidson employees is devoted to full filling dreams of customers and we believe there is not a motorcycle riding experience like Harley Davidson.

INTENSIVE STRATEGIES

Market Penetration

Product Development

Market Development

Market Penetration• Get some more market share from the existing market(U.S,

U.K, and Japan)

• Use more marketing techniques like advertising

• HD has a good brand name so it’s easy for them to eat up the competitor market share

• Competition is high in this segment mostly in U.S so good choice market penetration

• Expand the HOG (Harley Owners Group) to Asian countries

• If the company can provide the customer satisfaction that they are providing to the U.S customers to the Asian customers they can increase the sales

Product Development• Younger generation and female are now

coming to this segment so expand the motor cycle segments to younger generation and females.

• In Europe they can increase or expand the Buell’s market share by introducing new motorcycles.

Market Development• Harley-Davidson can bring in their vehicle to Asian

countries (India, China), because these countries have a high population and the market potential is also high.

• The cost to bring in the old vehicles (old product) to India is so much difficult:

- There are so much environmental laws -Taxes are problems -Levis are high in India • So starting new plant in India can solve this problem.

Negotiations with the Government can solve these problems

CURRENT INTEGRATION STRATEGIES • Vertical Integration

• Horizontal Diversification

Vertical Integration

• HD uses both backward and forward integration • More than 750 suppliers of g&s are used in the design

and manufacture of motorcycles, parts and accessories • The control of inputs is a necessary part of just-in-time

manufacturing • HD has been backward integrating to maintain control

over the quality of suppliers • HD owns most of its distributors • Distributing completed motorcycles throughout the world • HD is responsible for the delivery of parts and accessories

Horizontal Diversification

• HD has acquired Buell Motorcycles and Eaglemark Financial Services, in order to provide new product lines for their customers

• Buell was acquired in order to be able to provide customers with a V-twin powered Sport motorcycle

• This type of motorcycle has become increasingly popular with the younger and European riders

• Eaglemark provides motorcycle financing, motorcycle casualty insurance and extended service contracts for HD and Buell motorcycles

• They also issue the HD Chrome VISA Card, allowing riders and customers to show their brand loyalty

You might be a biker if…

You wave at bikers even when you’re in your car.You have put motorcycle parts in the dishwasher.You pull your bike into the motel room and use a bath towel to wipe it off.

You take your kids for a ride on your bike before they can walk.You carry a picture of your bike in your wallet.You can’t remember your kids’ names or birthdays, but you can remember that Harley-Davidson made the Knucklehead, Panhead, Shovelhead, Evolution, and Twin Cam 88 & 96

Yasemin Şirin

ORGANIZATIONAL CHART

MANAGEMENT• Excellent Corporate Governance has been a long

standing business practice at HD, because it makes good business sense

• The HD Management and Board of Directors is composed of accomplished leaders from a range of industries who meet regularly to review Company objectives and plan for future growth

• These individuals draw on their diverse backgrounds and experiences

• They are proud HD enthusiasts, and they work to ensure that the decisions made by HD promote fairness, financial transparency and accountability to all our shareholders

EXTERNAL FORCES• Economic Forces

• Technological Forces

• Social, cultural, demographic, and natural environment forces

• Political, governmental and legal forces

• Competitive Forces

Economic Forces

HD is the largest manufacturer of heavyweight motorcycles in the world by market share, capturing half the U.S. market and a third of the global market

As a luxury good, HD competes primarily on design and quality, rather than price, which keeps margins high; gross margin in 2011 is projected to be approximately 34%

Harley Davidson announces a 73.5% increase in income in year-ago comparisons, totaling $119.3 million for the first quarter of 2011 Increases in income were driven by a 1.5% increase in revenue, totaling $1.22 billion for 2011

Technological Forces

• Computer-based inventory control systems could play a role in managing motorcycle inventories

• Technology also impacts design

• Modern motorcycles also are relatively free of oil leaks, vibration, and are more comfortable than those of the past

• Communication across continents is easier and cheaper than ever before because of computer-based inventory control systems

Social, cultural, demographic, and natural environment

forces• As aging couples with excess income are Harley Davidson’s target

market, the aging population growth and income growth are good signs for the company

• The U.S. veteran population has increased by 1.1% , Veterans tend to be motorcycle owners so sign of market segment growth for Harley

• Motorcycles are mostly used during warmer months which are generally March through August in the northern United States and Canada so the motorcycles riders intend not to buy motorcycles until they can ride them.

• The United States has the greatest income inequality among developed nations ,This indicates a large (growing) potential market size for Harley Davidson as it is the leader in the Motorcycle market with about 50% market

• The changes in the lifestyle of the majority of youth population the world-over has resulted in an enhanced business for HD

Political, governmental and

legal forces• The Environmental Protection Agency (EPA) regulates automobile and motorcycle emissions

• Future revisions could negatively impact the motorcycle industry. Steel prices increased 57% and aluminum increased by 24%, so that the cost increases on to consumers, thus raising the price of the product

• The environmental protection laws create on additional pressure for companies

• Human resource legislation mostly in favour of the employees also does have an impact on the profitability of the company

• The internationalization of the business of the company is concerned the moving of production facilities to those locations

Competitive Forces

• Its main competitors are Honda and Yamaha based on their world-wide market share

• Harley’s competitors are more diversified, they are less vulnerable to industry changes

• Honda and Yamaha also offer products that sell well in the international markets compared to Harley

• Harley products are more expensive than its competitors, but are known for service and saleability

• Touring bikes have increased in popularity with each year. Victory, Honda, Suzuki, and Harley have expanded their touring line of motorcycles to cater to the aging market. Harley offers eight variations of the touring motorcycle

INTERNAL FORCES• To determine HD’s strengths and weaknesses, an

internal assessment is required • Harley only has 7.7% of European market share (the

second largest motorcycle market in the world), and 25.3%of the Asia/Pacific region

• Harley-Davidson’s strengths are in the U.S. market, as 80% of Harley’s net revenue comes from U.S. sales

• Harley was viewed as sub-par when compared to British motorcycles

• Harley has a reputation for style and quality

INTERNAL FORCES(con’t)

• Harley-Davidson also introduced water-cooled engines, fuel injection, and catalytic converters to improve exhaust emissions

• Harley’s strength in this area is largely due to its marketing abilities in the U.S. market

• Harley customers are extremely loyal to their brand and 90% of Harley owners intend to purchase another Harley

• Management information systems could be used to more effectively manage inventory at Harley .This is currently one of Harley-Davidson’s few internal weaknesses

MICHEAL PORTER ANALYSISFive Forces Analysis

Forces Strategic Significance

Internal Rivalry LOW-MODERATE

Threat of New Entrants LOW

Threat of Substitutes Products

LOW-MODERATE

Bargaining Power of Buyers LOW

Bargaining Power of Supplier

HIGH

Market share and financial analysis BALANCE SHEET

HD CASH FLOW

MARKET SHARE• Competition in the motorcycle industry consists of

only a handful of producers worldwide. • The Japanese producers Honda, Yamaha,

Kawasaki, and Suzuki are producing a full line of motorcycles ranging from scooters to heavyweights, and together control the largest share of the market

• Motorcycles are sold internationally, 3 main geographic markets North America, Asia, and Europe

• The largest is the North American Market (USA and Canada account for about 60% of this market) accounting for 60% of worldwide motorcycle sales

MARKET SHARE (con’t)

• Most Asians consider motorcycles as a basic means of transportation.

• Major target areas include China, Korea, Taiwan and Vietnam.

• The European Market is another market with great potentials since Europeans have a higher disposable income and enjoy a higher standard of living

• Eastern Europe is not offering a good deal mainly because of its unstable political and economic environment

Harley-Davidson 46.40%Honda 20.20%Suzuki 9.80%Yamaha 9.30%Kawasaki 7.10%BMW 2.50%Other 4.60%

The following table details the market share by region:

North American Market Share

European Market Share

• Honda 21.00%

• Yamaha 17.70%

• BMW 15.10%

• Suzuki 14.80%

• Kawasaki 8.50%

• Harley-Davidson 6.60%

• Ducati 5.70%

• Triumph 3.50%

• Other 7.00%

Asia/Pacific Market Share

• Harley-Davidson 21.30%

• Honda 19.10%

• Kawasaki 15.80%

• Yamaha 13.60%

• Suzuki 10.10%

• BMW 7.30%

• Ducati 6.90%

. Other 5.90%

World Wide Revenue

2011 Worldwide Retail Sales ofHarley-Davidson Motorcycle

GROWTH SALES

For the first time in 17 quarters, Harley reported selling more motorcycles than in the year-ago quarter. Growth in the U.S was the most impressive, while international growth contributed too. Thanks to relatively surging sales in the U.S., the mix of domestic to international sales has dropped from 42% last year to just 36% now.

Incidents that may involve a potential conflict of interestDisclosure of any waivers of any conflict of interestRegular reports to the Board. Reassess annually the Human Resources Committee performanceEstablish subcommittees and delegate authority to such subcommittees

Human Resource

Committee Duties and Responsibilities is to review the;Total compensationCareer development and management succession plansMake recommendations regarding the selection and retention of officers

Human Resource

Hasan Celal Kök

Sturgis is a city in Meade County, South Dakota, United States.

The population was 6,627 as of the 2010 census.

It is more popular than some city in the USA

• The Sturgis Rally is a motorcycle rally held annually in Sturgis, South Dakota each first full week of August

 It was founded in 1938 by the Jackpine Gypsies Motorcycle Club

The first year in Sturgis, there were 19 participants

But in recent years; Attendance was estimated at, 614,951 in 2004, and 625,250 in 2005

• About 50.000 people coming to this city for trade.

• It is the biggest motorcycle rally in the world

• A lot of people comes from thousands of miles of distance

• For example: Some people comes from New york by Harley Davidson motor.

• The distance between Sturgis and New York 1744 miles and Florida 2030 miles.

• Distance isn’t important for participator

The others of racing place

• Sturgis • Florida • Shipley • Milwauke (wisconsin)• Las vegas

Mümine ÇinStrategic matrix

STAGE 1 THE INPUT STAGE

EXTERNAL FACTOR EVALUATION (EFE)

COMPETITIVE PROFIL MARTIX (CPM)

INTERNAL FACTOR EVALUATION (IFE)

STAGE 2 THE MATCHING STAGE

STRENGHT-WEAKNESESS-OPPORTUNITIES –THREATS –(SWOT MATRIX)

STRATEGIC POSITION AND ACTION EVALUATIN (SPACE MARTIX)

BOSTON CONSULTING (BCG)

INTERNAL-EXTERNAL - (IE)MATRIX

GRAND STRATEGY MATRIX

STAGE 3 THE DECISION STAGE

QUANTITATIVE STRATEGIC PLANNING MATRIX

STAGE 1 THE INPUT STAGE

EXTERNAL FACTOR EVALUATION (EFE)

COMPETITIVE PROFIL MARTIX (CPM)

INTERNAL FACTOR EVALUATION (IFE)

STAGE 2 THE MATCHING STAGE

STRENGHT-WEAKNESESS-OPPORTUNITIES –THREATS –(SWOT MATRIX)

STRATEGIC POSITION AND ACTION EVALUATIN (SPACE MARTIX)

BOSTON CONSULTING (BCG)

INTERNAL-EXTERNAL - (IE)MATRIX

GRAND STRATEGY MATRIX

STAGE 3 THE DECISION STAGE

QUANTITATIVE STRATEGIC PLANNING MATRIX

EXTERNAL ANALYSIS FACTOR (EFE) MATRIX

Harley davidson honda yamaha

Critical succes factor weight rating Weighed score rating Weighted score

rating

Weighed score

Product selection 0.15 2 0.30 4 0.60 4 0.60

Product quality 0.10 3 0.30 4 0.40 3 0.30

Price competıtıveness

0.10 1 0.10 3 0.30 4 0.30

Market share 0.15 3 0.45 3 0.45 3 0.45

Management 0.05 4 0.20 4 0.20 4 0.20

Financial position 0.05 4 0.20 3 0.15 3 0.15

Customer loyalty 0.20 4 0.80 2 0.40 2 0.40

Global expansion0.20 2 0.40 4 0.80 4 0.80

Total 1.00 2.75 3.30 3.20

COMPETITIVE PROFILE MATRIX(CPM)

STRENGHT WEIGHT RATING WEIGHT SCORE

1-Strong brand name 0.15 4 0.60

2-ıt has strong market department 0.15 3 0.45

3-Strong relations built on trust and respect with supliers and dealers

0.10 3 0.30

4-It is only major American motorcycle manufactures

0.10 3 0.30

5-The standart and performance segments of Harley Davidson make up 70 % of the European heavy weight motorcycle market

0.10 4 0.40

WEAKNESS WEIGHT RATING WEIGHT SCORE

1. Harley davidson dosn’t emphasize price in it’s product

0.10 2 0.50

1. Loss of benefits 0.10 3 0.60

1. Lack of opportunity for advancement 0.10 3 0.30

1. Facing engoing capacity constraints 0.05 4 0.20

1. Difficult to attract and retain talented employee

0.05 4 0.40

TOTAL 1.00 4.05

INTERNAL ANAYLSIS FACTOR (IFE) MATRIX

STAGE 1 THE INPUT STAGE

EXTERNAL FACTOR EVALUATION (EFE)

COMPETITIVE PROFIL MARTIX (CPM)

INTERNAL FACTOR EVALUATION (IFE)

STAGE 2 THE MATCHING STAGE

STRENGHT-WEAKNESESS-OPPORTUNITIES –THREATS –(SWOT MATRIX)

STRATEGIC POSITION AND ACTION EVALUATIN (SPACE MARTIX)

BOSTON CONSULTING (BCG)

INTERNAL-EXTERNAL - (IE)MATRIX

GRAND STRATEGY MATRIX

STAGE 3 THE DECISION STAGE

QUANTITATIVE STRATEGIC PLANNING MATRIX

Strong

marketing

Product Quality

Brand

Recognition

Trademark

Licensing

Supplier

relationship

Designer Store

Service

Distribution

Channel

Wow Biking

experience!

Strengths

Price factor Brain drain Reliant on few

suppliers Market share Ongoing capacity

constraints Lengthy lead

time

Weakness

Harleys ongoing

capacity restraints

Loss in domestic

market share in recent

years

Competitors of Harley

Davidson

Environmental

protection laws

Higher production

Costs

Recession

Threats

The international

market is now larger

than the U. S.

Customers value

quality parts.

Women and younger

riders are increasing

becoming interested

in bikes.

Industry registrations

of heavyweight

motorcycles are

increasing.

Opportunitie

s

SWOT Analysis

S-O Strategies• Expand production into

Europe and Asia• Expand marketing to female

riders S-T Strategies • Increase strong brand name W-O Strategies●Pursue foreign markets more

agressivelyW-T Strategies • Improve employee

relationships

STRENGTHSCustomer retentionFinancial positionProduct selectionU.S.market shareU.S. dealer Network

OPPORTUNITIESIncreasing number of ridersU.S. industry growthAging populationAsian industry growth

THREATSUnion relationsAging U.S.populationCompetitor diversificationDeclining European growth Availability substitus

WEAKNESSESDealer inventory systemInternational market shareExpensive productProduct selectionInternational dealer

SWOT MATRIX

SPACE Matrix

Ratings

Financial Strength(FS)

Leverage +6

Liquidity +4

Return on invesment +3

Working capital +4

Industry Strength(IS)

Growth potential +5

Profit potential +4

Capacity utilization +4

Ease of entry +5

Environmental Stability(ES)

Competitive pressures -4

Risk -2

Price range of competing products -5

Demand fluctuations -2

Competitive Advantage(CA)

Market share -2

Loyalty -1

Product life cycle -1

Product quality -1

Conservative FS Aggressive

CA IS-1

-2

-3

-4

-5

-6

ES

DefensiveCompetitive

-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6

+ 6

+5

+4

+3 +2 X

+1

SPACE MATRIX

STAR PROBLEM CHILDREN

COW DOG

1.0 0.50 0.0 +30

Industry GrowthRate

-30

Relative Market Share

BCG Matrix

Harley-Davidson RELATIVE MARKET SHARE 48%

GROWTH RATE 13.029

H.D US Market49%

H.D ASIANMarket22%

H.D EUROPEANMarket 7%

4 strong 3 avarege 2 Weak 1

INTERNAL-EXTERNAL (IE) MATRIX

Harley-Davidson U.S. MARKET SHARE 49%

Harley-Davidson EUROPEAN MARKET SHARE 07%

Harley-Davidson ASIAN MARKET SHARE 22%

4

H high

EFE Total Weighted Score

3 medium

2

Low

1

GRAND STRATEGY MATRIX

QUADRANT:2 QUADRANT :1

QUADRANT:3 QUADRANT:4

Weak Competitive Position

Strong Competitive Position

Rapid Market Growth

Slow Market Growth

STAGE 1 THE INPUT STAGE

EXTERNAL FACTOR EVALUATION (EFE)

COMPETITIVE PROFIL MARTIX (CPM)

INTERNAL FACTOR EVALUATION (IFE)

STAGE 2 THE MATCHING STAGE

STRENGHT-WEAKNESESS-OPPORTUNITIES –THREATS –(SWOT MATRIX)

STRATEGIC POSITION AND ACTION EVALUATIN (SPACE MARTIX)

BOSTON CONSULTING (BCG)

INTERNAL-EXTERNAL - (IE)MATRIX

GRAND STRATEGY MATRIX

STAGE 3 THE DECISION STAGE

QUANTITATIVE STRATEGIC PLANNING MATRIX

E.P. EUROPE E.P. ASIA

STRENGHTS WEIGHT AS TAS AS TAS

Net income of 2010 was $146.545,it is very big rate to compare with the previous year 2009

0.075

3

0.0225 3 0.0225

The standard and performance segments ofHarley Davidson make up70% of the EUROPEAN heavy weigted motorcycle market 0.045

3 0.135 2 0.09

Harley Davidson operates in two segments:Harley Davidson motorcyles & related products and HDFS(Harley

Davidson Financial Service) 0.0125

4

0.05

3

0.0375

Harley Davidson is the only majör American heavyweight motorcyle manuf 0.05

4

0.2

4

0.2

Strong brand name

0.075

4

0.3

2

0.15

WEAKNESS 0High price 0.075 2 0.15 2 0.15Harley Daviidson has problems in gaining more market share in some European countries(That’s one of the main markets for heavyweight motorcyles outside U.S). 0.03

3

0.9

3

0.9

They didn’t yet start its sales in India one of the biggest market s 0.05

3

0.15

3

0.15

Required production is not met ,analysing the future of heavyweight motorcyle market 0.025

4

0.1

4

0.1

QUANTITATIVE STRATEGIC MATRIX (QSPM)

OPPORTUNİTES 0The European demand for Harley Davidson is the highest international market and represents the single largest motorcyle market in the World

0.075

4

0.3

2

0.15

The international heavy weight market is growing and is now larger than the U.S. heavyweight market

0.075

4

0.3

3

0.225

Women and younger riders are increasing becoming intrested in bikes 0.05

3

0.15

4

0.2

Market share increasing in Europe and Asia for the last two years 0.025

3

0.075

4

0.1

Increasing demand U.S market for bikes 0.1

2

0.2

3

0.3

Customer value quality parts 0.125

1

0.0125

2

0.025

THREATHarleys ongoing capacity restraints caused a shortage supply and a loss in domestic market share in recent years

0.75

4

0.3

3

0.225

The European Union’S motorcyles noise standars are more stringent than those of Environmental Protection Agencies in the U.S increased enviromental stand

0.0125

3

0.0375

2

0.025

Conclusion

• Harley- Davidson have to change American culture and helped the future of motorized vehicles.

• Must implement latest technology & facilities.

• Loyal customers are not sufficient for company to survive.

• “it’’s a journey but not a destination”

Possible StrategiesExpand into Foreign Markets

• Asia• Europe

Product Development• Expand Motorcycle line for younger

market• Buell expansion

Concentric Diversification• Other recreational vehicles• Expand HOG and BRAG owner

member groups

Possible Strategies

Made new alliances with some local bike

companies to produce low cost• India

Increasıng dıversity programing• Tour• museum

Increasing advertising

Thanks for paying attention