Case- Harley-Davidson-Strength & Weaknesses Essay
Case- Harley-Davidson-Strength & Weaknesses
To complete Module 3 Case Assignment, please read the information in the background material, look for more information (from previous modules and library resources), and then write a 4- to 5-page report answering the following questions:
What are H-D’s top two or three strengths for moving forward in the competitive motorcycle manufacturing and sales environment?
Describe what you consider to be two or three of the weaknesses that are likely to have the greatest impact, and what H-D is doing (or should be doing) to overcome these weaknesses.
Wrap up by overviewing the more salient points of your entire SWOT analysis (from your Module 3 and 4 Case Assignments) and give your impressions in relation to whether you think the corporation will continue to be competitive and be able to continue to meet its mission.
An introduction stating the thesis, position, or central theme of your paper, a main body focusing on the key assignment specifications, and a conclusion concisely stating the main points of your analysis and the conclusions you reached.
Harley-Davidson, Inc. is a U.S. based motorcycle manufacturer which was founded in 1903 and still remain one of the best American companies. Over the years, Harley-Davidson has adopted different strategies to promote their products in order to maintain its profitability and presence in the U.S. and International market. This paper will include the internal analysis identifying the company strengths and weaknesses and my personal impression is the company will be able to continue to be competitive and able to fulfil its mission.
THREE MAJOR STRENGTHS THAT CONTRIBUTE THE COMPANY TO BE COMPETITIVE IN THE MOTORCYCLE MANUFACTURING AND SALES ENVIRONMENT
Harley-Davidson, Inc. is a recognized brand legend, not just in the United States but all over the world, representing value, great designs, strong performance, durability, exclusivity and great customer service. Harley-Davidson has been in business since 1903 and has endured the constant market changes and customers’ demands for new products. The President and CEO of Harley-Davidson, Mr. Jim Zeiner, in 2005 have expressed the main reason of the company success: “A strong emotional tug draws people to Harley-Davidson. Emotions play a huge role in every customer relationship”. Mr. Zeiner believed that “Our sense of purpose-in other words, our focus on growing demand by offering great products and unique experiences” have been one of the constants of company success (Harley-Davidson, Inc., 2005).
In order to maintain their business competitive in the motorcycle manufacturing and sales environment the company had to evolution along with these changes. One of the ways to accomplish the constant demand for new and innovative products, Harley-Davidson has created and maintained a strong research and development unit to create new innovative designs. Another feature available for Harley-Davidson customers is a webpage where customers can customize motorcycles appearance and performance, giving additional ideas to create new designs (models), attracting existing and new customers to buy Harley-Davidson bikes.
Harley-Davidson’s operational excellence allow the company to reduce waste, improving quality and increase customer satisfaction by reconfiguring layouts and processes to gain capacity, reduce work-in progress and handling 50 percent, and reduce three operating shifts to two (Harley-Davidson, Inc., 2005). Through all Harley-Davidson facilities the operational excellence strategy has facilitated the workflow which allowed the company to increase their capacity of production processes.
Harley-Davidson management is constantly finding ways to improve processes including standard financial software platforms that service all business units creating ways to improve forecasting for new performance accessories (Harley-Davidson, Inc., 2005). The company operational efficiency improvement has resulted in a revenue increase from $5.58 billion in 2012 to $5.9 billion in 2013 as well the operating margin of 17.92 percent in 2012 as compared to19.61 percent in 2013. The operating income has also increased 169 basis point (bps) indicating an improvement in profitability (Marketwatch.com).
Harley-Davidson has two segments in which offer a variety of products and services. One of the segments is responsible for the development of designs, manufacturing motorcycles, sales of parts, accessories, general merchandise and related services through Motorcycles & Related Products. The other segment provides financial services to Harley-Davidson motorcycle dealers, in other words to finance Harley-Davidson franchises through Harley-Davidson Financial Services (GlobalData, 2012).
TWO MAJOR WEAKNESSES AND HOW TO OVERCOME THESE WEAKNESSES
One of Harley-Davidson weaknesses, in the past and existing, is product recalls which has and still affecting company’s revenues. In September of this year, Harley-Davidson recalled more than 105,000 motorcycles from 2014 model year because their clutches may fail, causing stopped bikes to creep forward and potentially crash, not been the only recall for this year. Earlier this year the Milwaukee Company also is recalling 1,384 motorcycles made earlier this year to test for possible fuel tank leaks (Associate Press, 2014). Product recalls not only affect the financial stability of Harley-Davidson but also affect their brand and reputation as well.
Another Harley-Davidson weakness is their high dependency on Unites States market which increases its business risk. Based on Harley-Davidson financial statement for the fiscal year of 2012, the company sales depended on the 68.1 percent of the market which is an high percentage, if is any adverse event could adversely affect the company’s financial stability (GlobalData, 2012).
Harley-Davidson’s Product Development Center (PDC) should improve the quality of their products to reduce recalls issues preventing any further damage to company’s reputation.
_U.S. Market Dependency_
There are some issues for Harley-Davidson to enter or grow in countries in the international market which includes an unstable economy, currency exchange, fuel prices. Harley-Davidson should take into consideration these issues and develop lighter and less costly motorcycles that will allow the company to increase their probability to create a new market niche. In order to reduce manufacturing costs Harley-Davidson have the option to open a manufacturing factory closer to these markets reducing cost and increasing revenue.
SWOT ANALYSIS MAIN POINTS & IMPRESSION OF FUTURE OF HARLEY-DAVIDSON
Harley-Davidson is a successful company composed by dedicated employees, most of them who have been working for many years and they are able to understand market changes and customer demands. Harley-Davidson has a strong brand image, diversity of products, customization, high operational efficiency, strong research center, and great customer service.
In my opinion, I think Harley-Davidson has many years to come. The new strategies they have developed includes, the manufacture of customer led motorcycle, seamless launch of surge production, flexibility to adjust to other markets dynamics, develop and manufacture designs to new demographics of clients which includes young adults from 18-34 years old, women, African Americans and Hispanics, and new financial and insurance programs (A. R. Harley-Davidson, 2013). Harley-Davidson have demonstrated with a successful track record that they have the capacity to maintain their position and reputation in the motorcycle market.
Harley-Davidson has encountered many problems since its creation and over the years and has adopted different strategies to promote their products and brand name not only in the United State but internationally, opening the doors to create business opportunities in other countries. No matter their high and low’s, their products have proved to be the best in the motorcycle industry and they are still designing better models to provide the best experience of motorcycling, including past learning experience to improve flaws. They have also been able to improve their operational excellence which has increased company’s revenue creating a financial stability.
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