1 Harley-Davidson An American Icon Executive Summary As a market leader in its industry, Harley-Davidson is a household name.

. The motorcycle company that is recognized in America from coast-to-coast has continued to enhance its core business and attract customers that seek not only a ride on a motorcycle but, an experience like no other (i.e. The Harley-Davidson experience). The HarleyDavidson experience also includes Harley-Davidson Financial Services which enhances the experience for its customers through convenience. The experience would not be complete without apparel that represents the logo that is recognized nationwide. While Harley-Davidson has developed and designed products that differentiate them from its competitors, it is the passion of its customers that have increased brand recognition and fueled brand loyalty. Harley-Davidson has formed an alliance with its customers that is comparable to none. The companys ability to develop a culture in which customers not only embrace its product but, develop the Harley-Davidson lifestyle is a unique force representing both American individualism and even a bit of American rebelliousness. An analysis of Harley-Davidson, Inc. 2004 revealed: Recommendations 1) Enhance target market/Appealing to a younger generation. 2) Increase sales growth internationally. 3) Increase overall research and development (R&D). Goals Increase sales by 2007 (10% - $400,000 to $440,000) Company Background Harley-Davidson was founded in 1903 by the Davidson brothers, William D., Walther, Arthur and by William S. Harley. The company introduced the classic black leather motorcycle jacket in 1947. In 1970, the

2 company faced stiff competition from Japanese firms that penetrated the market and captured a large portion of Harley-Davidsons market share. Harley-Davidson survived a difficult time and is considered an American icon. In 2003, the company celebrated its 100th year anniversary. Company Culture Customers feel like part of the Harley-Davidson family; Customers have a passion for the company that does not compare to its competitors; H.O.G. Harley Owners Group - $900,000 people around the world that embrace the Harley-Davidson experience. Products and Services Motorcycles (recreational; police and fire/rescue motorcycles; shrine motorcycles); Motorcycle related products (motorcycle parts, accessories, and general merchandise); Harley-Davidson Financial Services, Inc. (HDFS) provides financial services programs to Harley and Buell dealers and consumers in the United States and Canada. Target Market/Demographics The average purchaser of a U.S. HarleyDavidson motorcycle is a married male in his mid-forties, with a household income of $78,600. Goal Increase target market to include 25 35 year old customers (i.e. families are increasingly earning more income at younger ages). Market Share/BCG Matrix Harleys share of the U.S. heavyweight market is about 48 percent compared to its next larger competitor in the domestic market, Honda which has about 18 percent market share. Harley has about 7 percent market share in European markets and 22 percent of the motorcycle market share in Asia.

3 Financial Analysis Harley-Davidsons financial position versus leading competitors including ratio analysis. SWOT Analysis Strengths Strong brand recognition; Buell brand used to appeal to different market segment; Promotion on website (www.hog.com); Repeat customers; High price represents high quality product; Quick inventory turnover; Strong financial status; Products purchased by government agencies (police, fire protection, etc.); Brand loyalty; Offer financing on purchases (i.e. HDFS); Weaknesses Harley-Davidsons limited target market; Poor sales predictions; Lack of diversity (culture, age, and gender); Limited R & D plans; Limited product line; Opportunities Increase sales in Asian market, European market; Target younger generation (i.e. partnering with a theme park to offer a HD ride/offer scholarships to children of H-D owners); Retain current customers and attract new customers; Increase Buell product line to compete in international market; Increasing fuel prices/economical mode of transportation; baby boomers increasing disposable income; ATV market (i.e. Polaris and Honda have had recent recalls); Boat engine market (competitors offer engines that propel boats). Threats Increased competition within market (Yamaha, Suzuki, Kawasaki, Honda, Polaris); EPA/government raising standards (i.e. tariffs); Increase in price of raw materials; Insurance rates; Technological advancements; Poor economy (i.e. fluctuation of interest rates; decrease in recreational spending). Analysis of our Final Recommendations/Integration Strategy 1) Increase target market/Appeal to a younger generation (Strategy Market Development). 2) Increase Sales Growth Internationally (Strategy Product Development). 3)

4 Increase overall research and development (R&D) (Strategy Concentric Diversification). Mission/Vision statements An analysis of the companys mission and vision statements. As Harley-Davidson continues to build a strong financial position; increase its market share; build strong brand loyalty and recognition; and also, share its experience with customers both domestic and internationally; the company has an opportunity to grow its target market, increase sales in its international market, and increase research & development. These long-term goals should award Harley-Davidson an opportunity to diversify its customers (i.e. attracting a younger market and increasing customers in its international market). Society continues to grow in a more diverse and efficient manner and so should Harley-Davidson. Everyone who wants it should be exposed to the Harley-Davidson experience.