Case Analysis: Harley-Davidson Inc. in May 2015
- Executive Summary
Harley Davidson Company was established back in 1903 by three founders Arthur Davidson, Walter, and William. Later, in 1909 the company launched its trademark car which had a V-twin engine which then became Harley’s hallmark for the firm’s future. Due to competition, the company introduced new products in the market, for example, the teardrop gas tank. Following the First World War, the company was hit by a huge economic crisis; however, it made it to survive. In 1969, AMF purchased Harley Company and embarked on streamlining its losses incurred and quality challenges (Hagerty, 2015). Considering the challenges, AMF sold the firm, and around the 1980s, a project to rebuild it was initiated which was concerned with production approaches as well as work practices. Even after the initiation of the project to rebuild the firm, it was faced with a constant decline in sales. The challenges pushed the management to cut production and besides, employees were retrenched. To resolve the problem, the CEO of the firm by then, Richard Teerlink, suggested an approach to reshape production methods, administration principles as well as marketing strategies which would enable the company to thrive again in its operation and win market shares. The adoption of these changes made the company to regain its initial business operations, expand and increase its workforce.
- Statement of the Problem
The fundamental problem which made Harley company initially be sold out to AMF was the concentration of short-term goals by the higher executive at the expense of long-term ones. The company experienced excess inventory resulting in extra revenue tie-up which could be used for other issues. The management never gave employee room to contribute to business operations leading to unproductivity (Sizemore, 2020). The overall company problems stemmed from the operational leadership strategy. Company management took a lot of time to resolve the problem with the intent to dig deep into the issue. In certain instances, when there were market fluctuations, the company never took an immediate response which intensified the situation. Besides, the leadership failed to visualize market competition to implement a strategy that could help counter threats from their rival companies. From the case study analysis, Harley’s short-term challenge was the creation of business relationships. Also, the company faced a long0term issue of understanding consumers’ wants and preferences (Grant, 2016). The company’s employees’ were denied an opportunity to understand the company set goals and standards to maximize its resources to achieve its objectives.
III. Causes of the Problem
The company’s initial business success blinded the leadership to implement a strategy that would maintain it in the market. It was until they faced a decline in their market share that the management realized they need a concrete strategy to keep up with the competition. The company, therefore, engaged promotional tours and data mining to understand customers and market demands (Guillford, 2018). They had to come up with a realistic marketing plan, offer authentic commodities and promotional campaigns focused on luring more consumers.
- Decision Criteria and Alternative Solutions
The company needs to attain relevancy to the target demographic in its market share. Harley should be focused on men aged 35 and above and prove to them their ability to offer low-cost goods appealing to this segment. They should have in mind the right approach that will ensure the loyal motorcycles customers are maintained through improved quality of its products. They should thrive to offering eco-friendly products to keep-up with environmental laws and hence achieve a big market share over its rival companies.
- Recommended Solution, Implementation and Justification
Harley must be in constant innovation and strategy development to retain its growing market share. It must, therefore, introduce motorcycles that match the target group which is the youth without eliminating the older people. The company must, therefore, invest in successful communication between the executive and the junior employees for quality assurance. Such initiatives as employee training should be employed geared to achieving high standards in the production process.
References
Hagerty, J. (2015). Harley-Davidson Cuts Output in Face of Rivals’ Discounts. WSJ. Retrieved 22 July 2020, from http://www.wsj.com/articles/harley-davidson-cuts-shipment-guidance-amid-competition-1429615662.
Grant, R.M. (2016). Contemporary Strategy Analysis, (9th ed.). Hoboken, NJ: Wiley & Sons.
Guillford, G. (2018, March 15). Harley Davidsons’ 100-year history is a case study in the
marketing of the American maverick. Retrieved from https://finance.yahoo.com/news/harley-davidson-100-history-case-142903621.html
Sizemore, C. (2020). Forbes Welcome. Forbes.com. Retrieved 22 July 2020, from
http://www.forbes.com/sites/moneybuilder/2013/11/13/harley-davidsons-downfall-baby-boomer-demographics/#2dec48d428ef