Harley Davidson
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Group Presentation
Overview •
Brief History of HD
•
Where we are now
•
New Vision and Mission
•
•
External Analysis - Competitor Analysis - PESTLIED Analysis - Porter’s Five Forces
08/29/09
® Tony Gauvin, UMFK, 2005
Internal Analysis - Value Chain - Boston Matrix
•
SWOT Analysis
•
Conclusion
•
Q&A
3
HISTORY Foundation It all started in Milwaukee, Wisconsin in 1903 when William, Walter, and Arthur Davidson, along with William S. Harley, created the first Harley-Davidson in their family shed.
08/29/09
® Tony Gauvin, UMFK, 2005
4
Continued… 1906, the Harley-Davidson Motor Company was incorporated. WWI & WWII spurred growth for the company due to the militaries demand for HD’s economical motorcycles. After WWII, the improved American economy, and higher demands for Harley-Davidson bikes encouraged the company to expand its efforts and purchase additional manufacturing capacity.
08/29/09
® Tony Gauvin, UMFK, 2005
5
HD Today • Manufactures heavyweight Custom & Touring Motorcycles • Owns Buell Motorcycle & Eagle-mark Financial. • Has over 1,500 dealers worldwide. • Foreign business is about 18% of Sales; R&D, 3.2%. • Has about 8,800 employees.
08/29/09
® Tony Gauvin, UMFK, 2005
6
Existing Mission “ We fulfill dreams thorough the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles, branded products and services in selected market segments ”
Proposed Vision “ To be recognized as the best motorcycle company in the world ”
08/29/09
® Tony Gauvin, UMFK, 2005
7
External Analysis Competitor Analysis
America Market Share 48.1%
08/29/09
Europe Market Share 8.1% Higher Price
® Tony Gauvin, UMFK, 2005
Asia/ Pacific Market Share 25.8%
8
American Market
Kawasaki, 7.50%
Others, 8.30%
Yamaha, 9.20%
Harley Davidson, 48.10%
Suzuki, 12.70%
Honda, 14.30%
08/29/09
® Tony Gauvin, UMFK, 2005
9
PESTLIED ANALYSIS PESTLIDE ANALYSIS Political Low taxation from U.S government could encourage Japanese & European competition within the US. Economic Global recession is effecting economies world wide therefore HD has to sustain its position in the market. Social More diverse lifestyles, Creating many Harley Clubs and academies around the globe like Rider’s Edge. Technological New materials and other technologies are giving potential for innovative / customized motorbikes.
08/29/09
® Tony Gauvin, UMFK, 2005
10
Continued… Legal Different taxation method in different countries especially southeast Asia where HD is facing legal issues due to excessive excise duty. International Volatile international market situation is restricting HD to capture new markets. Environmental Noise and some emissions standards of HD bike is not up to the level of some countries across the globe. Demographic Average purchaser of HD is mid forties married man with household incomes averaging $78600 while only 9% of consumers are women.
08/29/09
® Tony Gauvin, UMFK, 2005
11
Porter’s 5 Forces
New Entrant • High Entry Barrier •Economies of scale •High tech Involvement •Small scale Producers minimum threat
Internal Rivalry Power of Buyer •Low power of customer as they are individual •Less no. of Dealers also rely on individual customers
•Honda, Yamaha, Suzuki ( All Japanese)
POWER OF SUPPLIER
•Honda mainly competing in U.S
•Out source Steel, Basic Electronics
•Strategic Alliance between Suzuki and Kawasaki
•Assembly within the Company •Ease of switching suppliers
Substitute Product •Very few substitute as luxury bike. •Cars, scooter and sports car. •NO subs when looking for luxury bike.
08/29/09
® Tony Gauvin, UMFK, 2005
12
Internal Analysis Value Chain VALUE CHAIN Firm Infrastructure Good Senior Management Has Transformed The Firm But It Remains Small Compared To Global Competitors. HRM Excellent But No Skills or Abilities Outside US. Procurement Very Good Relationship With Streamlined Supplier Base, and New Brazil Operations Can Reduce Cost Further. Inbound Logistics
Operations
Outbound Logistics
Marketing & Sales
Services
Good Advance JIT Procedure
Excellent Highest Level Operations
Very Good Because of Good Shipment
Excellent Relations & Brand Strength
Excellent In US But Weak Outside
08/29/09
® Tony Gauvin, UMFK, 2005
13
Internal Analysis BOSTON MATRIX
HD
08/29/09
® Tony Gauvin, UMFK, 2005
14
SWOT ANALYSIS Strengths • Financially sound position, net income in 2008 was $1357.4 m . • Only major manufacture in US but now set up a huge plant in Brazil. • Financial services purchased in 1995 ( Eagle Mark ). • Dealers in 67 countries. • Very strong brand image in the U.S as an American Icon. • Extremely loyal and valuable workforce in U.S strengthening the brand themselves. Weakness • Still small compared to the competition, limiting their ability to invest in new areas • Probably less efficient then their competitors as they own very few assets outside U.S. • Brand image is HD’s strength but is limited outside the U.S. • Customer loyalty outside US is low due to lack of after sale services. • No or very few Human resources outside the U.S in marketing and other fields.
08/29/09
® Tony Gauvin, UMFK, 2005
15
Continued… Opportunities • Asian economy is booming, China is the only place not effected by global recession. • Increasing demand for the bikes in US. • New dealers can be found in South East Asia and Middle East. • Interest rates are at historical lows. • Globalizations gives the opportunity to reduce cost and gives the potential to form useful relations with firms across the globe. • Alliances with Ford Motor Company or other automobile manufacturers are possible. Threats • The European Union’s motorcycles noise standards. • Risk of small custom bikes manufacturers joining the big companies. • Competitors are all from Japan & have more affordable and diversify range of bikes • Decreasing brand loyalty means the buying decisions are increasingly based on PRICE & PERFORMANCE. • Harleys average buying age is 42 years old and increasing.
08/29/09
® Tony Gauvin, UMFK, 2005
16
Conclusion • • •
Increase diversity programming Explore opportunities for physical plant expansion into other geographic areas to increase labor pool Bring HD heritage to the rest of the world.
08/29/09
® Tony Gauvin, UMFK, 2005
17
Questions
? 08/29/09
® Tony Gauvin, UMFK, 2005
18
Overview •
Brief History of HD
•
Where we are now
•
New Vision and Mission
•
•
External Analysis - Competitor Analysis - PESTLIED Analysis - Porter’s Five Forces
08/29/09
® Tony Gauvin, UMFK, 2005
Internal Analysis - Value Chain - Boston Matrix
•
SWOT Analysis
•
Conclusion
•
Q&A
3
HISTORY Foundation It all started in Milwaukee, Wisconsin in 1903 when William, Walter, and Arthur Davidson, along with William S. Harley, created the first Harley-Davidson in their family shed.
08/29/09
® Tony Gauvin, UMFK, 2005
4
Continued… 1906, the Harley-Davidson Motor Company was incorporated. WWI & WWII spurred growth for the company due to the militaries demand for HD’s economical motorcycles. After WWII, the improved American economy, and higher demands for Harley-Davidson bikes encouraged the company to expand its efforts and purchase additional manufacturing capacity.
08/29/09
® Tony Gauvin, UMFK, 2005
5
HD Today • Manufactures heavyweight Custom & Touring Motorcycles • Owns Buell Motorcycle & Eagle-mark Financial. • Has over 1,500 dealers worldwide. • Foreign business is about 18% of Sales; R&D, 3.2%. • Has about 8,800 employees.
08/29/09
® Tony Gauvin, UMFK, 2005
6
Existing Mission “ We fulfill dreams thorough the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles, branded products and services in selected market segments ”
Proposed Vision “ To be recognized as the best motorcycle company in the world ”
08/29/09
® Tony Gauvin, UMFK, 2005
7
External Analysis Competitor Analysis
America Market Share 48.1%
08/29/09
Europe Market Share 8.1% Higher Price
® Tony Gauvin, UMFK, 2005
Asia/ Pacific Market Share 25.8%
8
American Market
Kawasaki, 7.50%
Others, 8.30%
Yamaha, 9.20%
Harley Davidson, 48.10%
Suzuki, 12.70%
Honda, 14.30%
08/29/09
® Tony Gauvin, UMFK, 2005
9
PESTLIED ANALYSIS PESTLIDE ANALYSIS Political Low taxation from U.S government could encourage Japanese & European competition within the US. Economic Global recession is effecting economies world wide therefore HD has to sustain its position in the market. Social More diverse lifestyles, Creating many Harley Clubs and academies around the globe like Rider’s Edge. Technological New materials and other technologies are giving potential for innovative / customized motorbikes.
08/29/09
® Tony Gauvin, UMFK, 2005
10
Continued… Legal Different taxation method in different countries especially southeast Asia where HD is facing legal issues due to excessive excise duty. International Volatile international market situation is restricting HD to capture new markets. Environmental Noise and some emissions standards of HD bike is not up to the level of some countries across the globe. Demographic Average purchaser of HD is mid forties married man with household incomes averaging $78600 while only 9% of consumers are women.
08/29/09
® Tony Gauvin, UMFK, 2005
11
Porter’s 5 Forces
New Entrant • High Entry Barrier •Economies of scale •High tech Involvement •Small scale Producers minimum threat
Internal Rivalry Power of Buyer •Low power of customer as they are individual •Less no. of Dealers also rely on individual customers
•Honda, Yamaha, Suzuki ( All Japanese)
POWER OF SUPPLIER
•Honda mainly competing in U.S
•Out source Steel, Basic Electronics
•Strategic Alliance between Suzuki and Kawasaki
•Assembly within the Company •Ease of switching suppliers
Substitute Product •Very few substitute as luxury bike. •Cars, scooter and sports car. •NO subs when looking for luxury bike.
08/29/09
® Tony Gauvin, UMFK, 2005
12
Internal Analysis Value Chain VALUE CHAIN Firm Infrastructure Good Senior Management Has Transformed The Firm But It Remains Small Compared To Global Competitors. HRM Excellent But No Skills or Abilities Outside US. Procurement Very Good Relationship With Streamlined Supplier Base, and New Brazil Operations Can Reduce Cost Further. Inbound Logistics
Operations
Outbound Logistics
Marketing & Sales
Services
Good Advance JIT Procedure
Excellent Highest Level Operations
Very Good Because of Good Shipment
Excellent Relations & Brand Strength
Excellent In US But Weak Outside
08/29/09
® Tony Gauvin, UMFK, 2005
13
Internal Analysis BOSTON MATRIX
HD
08/29/09
® Tony Gauvin, UMFK, 2005
14
SWOT ANALYSIS Strengths • Financially sound position, net income in 2008 was $1357.4 m . • Only major manufacture in US but now set up a huge plant in Brazil. • Financial services purchased in 1995 ( Eagle Mark ). • Dealers in 67 countries. • Very strong brand image in the U.S as an American Icon. • Extremely loyal and valuable workforce in U.S strengthening the brand themselves. Weakness • Still small compared to the competition, limiting their ability to invest in new areas • Probably less efficient then their competitors as they own very few assets outside U.S. • Brand image is HD’s strength but is limited outside the U.S. • Customer loyalty outside US is low due to lack of after sale services. • No or very few Human resources outside the U.S in marketing and other fields.
08/29/09
® Tony Gauvin, UMFK, 2005
15
Continued… Opportunities • Asian economy is booming, China is the only place not effected by global recession. • Increasing demand for the bikes in US. • New dealers can be found in South East Asia and Middle East. • Interest rates are at historical lows. • Globalizations gives the opportunity to reduce cost and gives the potential to form useful relations with firms across the globe. • Alliances with Ford Motor Company or other automobile manufacturers are possible. Threats • The European Union’s motorcycles noise standards. • Risk of small custom bikes manufacturers joining the big companies. • Competitors are all from Japan & have more affordable and diversify range of bikes • Decreasing brand loyalty means the buying decisions are increasingly based on PRICE & PERFORMANCE. • Harleys average buying age is 42 years old and increasing.
08/29/09
® Tony Gauvin, UMFK, 2005
16
Conclusion • • •
Increase diversity programming Explore opportunities for physical plant expansion into other geographic areas to increase labor pool Bring HD heritage to the rest of the world.
08/29/09
® Tony Gauvin, UMFK, 2005
17
Questions
? 08/29/09
® Tony Gauvin, UMFK, 2005
18
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