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Case study

Harley Davidson
Case study
Harley Davidson
Presented by#
Dawood shah
MPA 4th semester
Introduction
• Harley-Davidson is an American motorcycle
manufacturer.
• one of two major American motorcycle manufacturers

• The company sells heavyweight (over 750 cc)


motorcycles
• have a distinctive design and exhaust note.
• especially noted for the tradition of heavy
customization

• Harley-Davidson sustains a loyal brand community


History
William S. Harley and Arthur Davidson make
available to the public the first production
Harley-Davidson® motorcycle. The bike
was built to be a racer, with a 3-1/8 inch
bore and 3-1/2 inch stroke. The factory in
which they worked was a 10 x 15-foot
wooden shed with the words "Harley-
Davidson Motor Company" crudely
scrawled on the door. Arthur's brother
Walter later joins their efforts.
Mission statement
• We ride with our customers and
apply this deep connection in every
market we serve to create superior
value for all of our stakeholders.
STRENGT
• Net income of 2008 was $760mn, its more than 30% as
compared to the previous year 2007
• The standard and performance segments of Harley Davidson
make up 70% of the European heavy weight motorcycle market
• Harley-Davidson is the only major American heavyweight
motorcycle manufacturer.
• Strong brand name.
• The HOG (Harley Owners Group), which have a 7,50,000
members world wide is the industry’s largest company sponsored
motorcycle enthusiast organization.
• Customization of the bikes, this is Harley-Davidson’s major
revenue maker.
• Harley-Davidson have a good marketing division and its divided
• as dealer promotions, customer events, magazine and direct-mail
advertising, and public relations.
WEAKNESS

• High price
• Harley-Davidson has problems in gaining
more market share in some European
countries (That’s one of the main markets for
Heavyweight motorcycles outside U.S)
• Required production is not met, analyzing
the future of Heavyweight motorcycle market
The Five-Forces Model of
Competition
Potential development
of substitute products

Bargaining power Rivalry among Bargaining power


of suppliers competing firms of consumers

Potential entry of new


competitors
EFE matrix
Key external factors Weight Rating Weighted
score

OPPORTUNITIES

The European demand for Harley Davidson is the highest 0.15 4 0.6
in the international market and represents the single largest motorcycle market in the world

The international heavy weight market is growing and is now larger than the U. S. 0.15 4 0.6
heavyweight market
Women and younger riders are increasing becoming 0.1 3 0.3
interested in bikes
Market share increasing in Europe and Asia for the last two 0.1 3 0.3
years
Increasing demand in US markets for bikes 0.1 2 0.2

Customers value quality parts 0.025 10.025

THREAT

Harleys ongoing capacity restraints caused a shortage 0.15 4 0.6


supply and a loss in domestic market share in recent years
Harleys average buying age is 42 years old and increasing 0.1 3 0.3

The European Union’s motorcycles noise standards are more stringent than 0.025 30.075
those of Environmental Protection Agencies in the U.S and increased environmental
stand
Some competitors of Harley Davidson have larger financial and marketing resources and 0.50 20.05
they are more diversified
Environmental protection laws 0.025 4 0.1

Buell division needs to continue to produce a quality 0.05 10.05


motorcycle under Harley’s brand name
TOTAL 1 3.2
CPM

HARLEY HONDA YAMAHA

CRITICAL Weight Rating Weighted Weight Rating Weighted Weight Rating Weighted
SUCCESS FACTORS Score Score Score

Advertising 0.15 40.6 0.2 30.6 0.15 40.6

Product Quality 0.15 40.6 0.05 30.15 0.025 30.075

Price 0.1 10.1 0.15 30.45 0.25 30.75


Competitiveness

Management 0.025 30.075 0.03 40.12 0.05 20.1

Financial 0.1 20.2 0.14 40.50 0.20 30.60


Position
Customer 0.15 40.6 0.06 20.12 0.15 20.3
Loyalty
Global 0.025 30.075 0.05 40.2 0.02 30.06
Expansion
Market Share 0.3 20.6 0.32 30.96 0.02 20.04

TOTAL 1 2.85 1 3.16 1 2.93


IFE
KEY EXTERNAL FACTORS WEIGHT RATING WEIGHTED
SCORE

STRENGTHS

Net income of 2008 is $760mn, its more 0.15 30.45


than 30% as compared to the previous year 2007
The standard and performance segments 0.09 30.27
of Harley Davidson make up 70% of the
European heavy weight motorcycle market

Harley-Davidson is the only major 0.1 4 0.4


American heavyweight motorcycle manufacturer
Strong brand name 0.15 4 0.6

The HOG (Harley Owners Group), which have a 7,50,000 members world wide is 0.05 2 0.1
the industry’s largest company sponsored
motorcycle enthusiast organization

Harley-Davidson have a good marketing 0.10 20.20


division and its divided as dealer promotions, customer events, magazine and direct-
mail advertising, and public relations

WEAKNESS

High price 0.15 2 0.3


IFE MATRIX

Harley-Davidson has problems in gaining more market share in some 0.06 30.18
European countries (That’s one of the main markets
for Heavyweight motorcycles outside U.S).

They didn’t yet start its sales in India, one of the biggest markets 0.1 3 0.3

Required production is not met, analyzing 0.05 4 0.2


the future of Heavyweight motorcycle market

TOTAL 1 3.075
TOWS
Space matrix

SPACE
Space matrix
• Average value for FS = 3
• Average value for CA = -1.85
• Average value for IS = 4.17
• Average value for ES = -3.33
• Point on X axis = (-1.85+4.17)/2 =
1.16
• Point on Y axis = (3-3.33)/2 =
-0.165
Space
QSPM
Recommendations
• Increase diversity programming
• Explore opportunities for physical
plant expansion into other
geographic regions
• Increase sales to young customer
thanks