Case Analysis: Harley-Davidson Inc
- Executive Summary
Harley Davidson Company was started in 1903 by three brothers Arthur Davidson, Walter, and William. By 1909 Harley Davidson firm released its trademark vehicle with a V-twin engine that would later become the hallmark of Harley for the foreseeable future. As time passed and competition became stiffer Harley began to develop products such as the teardrop gas tank that quickly became the Hallmark of their appearance. After World War I the industry took a big fall however Harley was able to survive, but in 1969 Harley was purchased by AMF and took a major hit with quality problems and financial losses (Hagerty, 2015). These issues led to AMF selling the company and a rebuilding project started in the early 1980s that revolved around production methods and work practices. The early years after this rebuilding project started was rough as sales continued to decline. As a result of this production was cut and employees were let go. In the wake of this disaster then CEO Richard Teerlink proposed a plan that would reshape management principles, marketing strategies, and manufacturing techniques that would help Harley to reestablish itself as one of the leaders in market share. These changes led to Harley’s current increase in employees, expansion of its operations to multiple different cities, and a continued push toward continuous improvement which is evident today.
- Statement of the Problem
The biggest problem Harley faced which led to the initial buyout by AMF was that the upper-level management placed the majority of the focus on short term objectives instead of focusing on the long term. There was a huge amount of excess inventory which led to the tie-up of extra revenue that could have been utilized for other things. Leadership did not listen to employees and with this lack of employee involvement, there was low productivity (Sizemore, 2020). All of these issues initially stemmed from the leadership approach to strategy. The leadership had a propensity to want to fix the problem quickly without looking at the issue deep enough. For example, as the market continued to fluctuate there were break-even points that were set so high that the company was left in a bad situation. Most importantly they did not pay enough attention to what the competition was doing so that they could come up with a plan to counter. As evidenced in the case study the short term problem facing Harley was the establishment of relationships. The long term problem that they faced was that of learning (Grant, 2016). Harley needed to get all of its employees to understand the business side of things for the organization to maximize its potential in the industry. To maximize this potential Harley needed to understand the demographic to which they serve. Put getting everyone on the same page in terms of the morals and values that the organization stood for.
III. Causes of the Problem
The initial cause of the problem was Harley’s initial success. The initial success that they had made them feels as though this was going to be a continuous thing. After their initial success and there market shares started to decline the realization set in that they could not compete so they had to come up with a plan in a hurry to try and rectify this. In doing so they also had to change from a company that dictated the pace to a company that based its business off of the customers. Basing their business off of customer demands they were able to develop databases, conduct promotional tours, which were all tools that were used to identify and keep up with demands (Guillford, 2018). For the company to ensure true customer experience, they would offer authentic Harley Davidson products, magazine advertisements that were designed for the public, advertisements that were geared toward attracting more customers.
- Decision Criteria and Alternative Solutions
In efforts to appeal to the demographic in which they appeal to (white males ages 35 and up) Harley, can produce cost-friendly lighter products that appeal to this age range while still maintaining the already loyal customers through maintaining the bigger style motorcycles. Keeping up with the current trend of going green so to speak and creating eco-friendly motorcycles will allow Harley to continue to keep up with its competitors.
- Recommended Solution, Implementation and Justification
To continue to stay atop of the industry Harley needs to continue with its development strategy to maintain and attract more consumers. In doing so, they can make products that appeal to both the younger generation and the older generation. Continuing this process will require efforts by both the upper-level management and the employees to ensure that the best product possible is being developed. These efforts will involve the retraining of employees on the current way ahead and ensuring everyone is on the same sheet of music in terms of the outcome of the product. As we continue to move forward in society with focuses placed on going green, developing a product of this nature could be profitable as it offers the opportunity to attract new consumers and the opportunity to stay ahead of competitors.
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