Harley Davidson-total

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Harley-Davidson Motor Company •Type

Public­1984, NYSE­1987

•Founded

1903

•Founder

William S. Harley Arthur Davidson Walter Davidson William A. Davidson

•Headquarters

Milwaukee, Wisconsin, USA

•Key People James L. Ziemer (CEO) Thomas E. Bergmann (CFO) James A. McCaslin (COO) Syed Naqvi (President, HDFS) •Industry

Recreational Vehicles 

•Revenue

▲  8.8 Billion USD (2008)

•Employees

9,700 (2006)

•Subsidiary Buell, HDFS •Website

www.harley­davidson.com 

                                            MISSION  We inspire and fulfill dreams around the world through Harley­ Davidson motorcycling experiences.                VISION  Harley­Davidson, Inc. is a global leader in fulfilling dreams  and providing extraordinary customer experiences through  mutually beneficial relationships with our stakeholders.              VALUES  These are our values. They are the heart of how we run  our business. They guide our actions and serve as the  framework for the decisions and contributions our  employees make at every level of the Company. Tell the Truth. Be Fair. Keep Your Promises. Respect the Individual. Encourage Intellectual Curiosity.

DEMOGRAPHICS

GENDER Male Female

2007 88% 12%

MEDIAN AGE

2006 88% 12%

2005 88% 12%

2004 89% 11%

2003 89% 11%

MEDIAN INCOME

HARLEY-DAVIDSON CUSTOMER PROFILE 2007

HDMC

INDUSTRY

Median age

44.4 yrs.

32.6 yrs.

Median Household Income $80,700

$42,500

Male Married

95% 57%

90% 49%

Blue Collar

53%

55%

White Collar

40%

31%

High School Graduate

90%

75%

College/Degree

44%

38%

Occupation

Education

52% Owned Harley-Davidson® motorcycle previously at any point during lifetime 33% Owned a competitive motorcycle previously 15% First motorcycle purchased

Competition !!!  BMW, Germany  Daelim, S. Korea !       

02.3% 02.6% Ducati, Italia 00.9% Honda, Japan 21.7% Kawasaki, USA 13.6% Polaris, Britain 01.5% Suzuki, Japan 12.6% Yamaha, Japan 10.0% HDMC, USA 34.8%

Strategic Direction and Marketing Objectives   •HD has chosen the strategic direction of targeting a  younger market that is technologically conscious in order  to increase its share in the performance cruiser market  space.  • •To target the younger market with the new product line,  the company has adopted the following marketing  objectives: to expand its current market (market  expansion), diversify its product line (product  diversification), and modify its marketing mix to target a  younger demographic. • •During the 1970's, HD was facing a decline in market  share due to increased competition with Japanese  companies. By phasing out weak models, becoming more  selective, and limiting sales and promotions, HD was able  to carve out a niche in the marketplace which it enjoys  today

• Possible future strategies to increase market share : •

•First, HD needs to expand its potential customer base to  include enthusiasts and non­enthusiasts males in the 35­44  age group • •, HD needs to position the V­Rod to also appeal to first time  buyers of motorcycles. HD's strong brand identity can help  pull in new clients.  • •Third, HD has to set an appropriate marketing mix that will  help attract a younger consumer base. By using the low­end  approach, which involves attracting a young audience to a  brand name product with a low price tag (similar to what  Jaguar and BMW have done), HD can expand its popularity  to the domestic and international market. 

Marketing Mix Elements •The product strategy is any decision that  helps the company continue to develop new  products around its signature American image  and positions the company in the market as  such. The main reason for the introduction of  the V­Rod was the need to create a bike that  would appeal to a younger demographic and  attain a greater market share for the company.  By using the low­end targeting method (as  discussed previously) with the introduction of  the V­Rod, this can be considered HD's first  step toward implementing its strategic and  marketing objectives.   

Motorcycles

>$6,999 Men's 

Product  Line

>$11,999 >$15,899 Accessories  Womens Kids

>$14,999 Gifts Items 

PRICE As for the pricing strategy, HD must be careful to  implement a pricing decision based on the low­end  targeting method. Priced at $17,000 MSRP, HD's  V­Rod has the second highest price tag in the  performance cruiser market. Although HD does  have a 22% share of the total market, HD's  pricing strategy has three main factors that have  influenced how it has priced the V­Rod: 1) the  used motorcycle market, 2) lower priced  motorcycles, and 3) HD's inability to keep up with  demand4. In order for HD to attain a greater  market share, the company must examine how  these three factors will continually play a role in  pricing and adjust accordingly.    

HARLEY DAVIDSON ON INDIAN ROADS Model

US $

Sportster®

$6,999

Indian Rs (approx) 5,97,000/-

Dyna®

$11,999

10,23,000/-

Softtail®

$15,899

13,55,000/-

VRSC®

$14,999

12,80,000/-

Touring®

$16,999

14,50,000/-

•Prices have been arrived at by calculating the various surcharges and import duty amounting to 103% of original rate (www.thekneeslider.com) •Exchange rate – US $ (in Rs.) 42.79/- as on 30/07/2008 •Price in US $ courtesy –www.harley-davidson.com

The Indian Connection 

Meeting with Mr. Kamal Nath (Minister of Commerce and Industry) on April 2007





13th April 07 relaxation of emission norms





Quid-pro-Quo with American government



 

Initial sales target 500 units for 3 years

PROMOTION The Harley­Davidson Corporation has found multiple  ways to implement its promotion strategy. HD's  primary promotional tool since 1983 has been the  HOG. The company's advertisements and  commercials are focused around female images. Since  93% of bikers are males, the HOG advertising  campaign has been successful for decades5. HD also  uses another strong promotional campaign through  its cafes, located in most dealerships. HD has also  developed an interactive website (www.harley­ davidson.com). The website gives the company the  chance to expand its operations online. Finally, HD's  most important promotional tool is the brand image  of a truly American product. Such a tool appeals to  the domestic market, and owning a Harley­Davidson  bike fits well into supporting the national feelings of  pride for America. 





Although the company generated more than $1.3 billion in revenues in 1995, it spent less than $2 million in advertising. "We're not dependent on advertising or other traditional marketing techniques as automobile companies or even our competitors are," says Schmidt. "They're selling transportation. We're selling dreams and lifestyle. There's a big difference."

EMPLOYEE

INVOLVEMENT

IN

MANAGEMENT

BCG MATRIX • •

• RELATIVE MARKET SHARE: 48% GROWTH RATE: 13.029

STRATEGY: MARKET PENETRATION, MARKET DEVELOPMENT, PRODUCT DEVELOPMENT, DIVESTITURE.

S W O T analysis Strengths American company •Huge fan following •Range of good products

Weakness Bad boy image •High cost •Poor emission records







• •

Opportunity

Threats

•Competitors Large untapped market •Booming tourism sector •Restrictive government policies •Movement of customers towards •Time high end products •





Historical Ratio Analysis Ratios Analysis 1992 Liquidity ratio current ratio (times) Quick ratio (times)

1993 1.57 0.81

1.75 0.86

1994 1.88 0.94

Leverage ratio Debt ratio (%) Interest coverage (times)

44.30% -19.79

68.93% -84.00

41.39% 3643.34

Profitability ratio Net Profit Margin (%) Return on asset (%) Return on equity (%)

4.87% 10.30% 16.04%

-0.98% -2.04% -3.66%

6.76% 14.11% 24.07%

Activity ratio Account receivable (times) Average collection period (days) Inventory turnover (times) Average sale period (days) Fixed asset turnover (times) Total asset turnover (times)

11.86 30.77 8.57 42.61 4.31 2.12

14.15 25.79 6.28 58.11 4.88 2.09

10.75 33.95 6.46 56.50 4.62 2.09

Net Sales and Net Income

Net Net Net Net Net Net

1994 1995F 1996F 1997F 1998F 1999F sales (w /o recom m endation) 1,541,796 1,805,023 2,160,800 2,434,060 2,702,121 3,004,958 sales (w ith recom m endation) 1,541,796 1,805,023 2,143,024 2,014,925 2,368,204 2,787,186 sales (w ith pricing effect) 1,541,796 1,805,023 2,357,326 2,216,418 2,605,025 3,065,905 incom e (loss) (w /o recom m endation) 104,272 119,463 143,009 161,094 178,835 198,878 incom e (loss) (w ith recom m endation)104,272 119,463 164,334 171,638 220,677 268,081 incom e (loss) (w ith pricing effect) 104,272 119,463 378,637 373,131 457,498 546,800

Harley­Davidson announces leadership change at Financial Services unit MILWAUKEE (January 8, 2009) ­ Harley­Davidson, Inc. (NYSE:HOG) announced today  that its Chief Financial Officer, Tom Bergmann, will take on the added responsibility of  interim President of Harley­Davidson Financial Services (HDFS), effective  immediately.The appointment follows HDFS President Sy Naqvi’s personal decision to  resign. Naqvi joined HDFS as President in February 2007. Bergmann will serve as interim  HDFS President while the Company conducts a comprehensive external search. “In the current economic environment, HDFS is an especially important priority for us and  Tom has been highly involved in guiding that business,” said Jim Ziemer, Chief Executive  Officer of Harley­Davidson, Inc. “I am confident Tom is the right person to lead HDFS  through this transition.”   Before joining Harley­Davidson as CFO in 2006, Bergmann was the CEO of USF  Corporation, a $2.5 billion publicly traded transportation and logistics company. Bergmann  also served as Corporate Controller and Vice President of Finance for Financial Services at  Sears, Roebuck and Co., and in senior level positions at The St. Paul Companies, Inc. and  Johnson & Johnson, among other executive positions he has held. “HDFS has a strong leadership team and I am looking forward to working with them even  more closely,” said Bergmann. “We wish Sy well in his future endeavors,” he said. Harley­Davidson, Inc. is the parent company for the group of companies doing business as  Harley­Davidson Motor Company (HDMC), Buell Motorcycle Company (Buell), MV Agusta  and Harley­Davidson Financial Services (HDFS). Harley­Davidson Motor Company  produces heavyweight custom, touring and cruiser motorcycles. Buell produces premium  sport performance motorcycles. MV Agusta produces premium, high­performance sport  motorcycles sold under the MV Agusta® brand and lightweight sport motorcycles sold  under the Cagiva® brand. HDFS provides wholesale and retail financing and insurance  programs primarily to Harley­Davidson and Buell dealers and customers.

Harley­Davidson creates special program to help riders share their passion MILWAUKEE (January 13, 2009) ­ The Merriam­Webster dictionary defines mentor as a “trusted counselor or guide.”  Mentors  can come from various backgrounds and ages, but all share a common goal of sharing their passion with others.  So as the nation  celebrates National Mentoring Month, Harley­Davidson is encouraging riders to share their passion for the open road with others  through a special mentoring program called Share Your Spark.Share Your Spark: A Guide to Mentoring is a tool kit the Motor  Company developed for current and aspiring riders featuring information on how to be a resource and support system to others  during their motorcycling journey. The mentoring kit includes information for both potential mentors and mentees, including a  DVD showcasing tips on how to become or find a mentor, stories from successful mentoring experiences, a special Share Your  Spark pin and a planning and reflection guide. "The mentoring experiences is empowering for both parties involved," said Leslie Prevish, market outreach manager, Harley­ Davidson. "For the mentor, they get to share their passion with someone who aspires to live the same dream they do.  For the  mentee, they learn through the collective experiences of their guide. Of course, the mentoring relationship also leads to many life­ lasting friendships.”   Prevish adds that Share Your Spark is not just for women, but the Motor Company’s research indicates many women have  expressed their desire to be – and find – a good riding mentor. Over the past several years, women have increasingly embraced the sport of motorcycling – seeking the freedom and adventure  associated with the open road, polished chrome and a sweet sounding engine. In fact, the number of women who have purchased  new Harley­Davidson motorcycles has tripled over the past 20 years, with women now accounting for nearly 12 percent of new  Harley­Davidson motorcycle purchases. What Else Harley’s Doing to Inspire Women to Ride Harley­Davidson’s We Ride is a comprehensive and inspirational overview on what a new rider or a woman interested in riding  needs to know about getting into the sport. It features information on how and where women can learn to ride with details on the  Rider’s Edge® New Rider Course, as well as the best way to fit a motorcycle for a woman’s ergonomic and functional needs. It also  includes tips on getting involved and staying active with riding groups, including inspirational stories from real women who have  answered the call of the open road. For more information, visit www.harley­davidson.com/womenriders. Harley­Davidson dealerships across the country are also hosting women­only Garage Parties to encourage them to get involved in  motorcycling. The Harley­Davidson Garage Party event provides a non­intimidating environment for women to learn more about  motorcycling and meet others who are interested in riding. For more information about Share Your Spark, visit your local Harley­Davidson dealership or visit  www.harley­davidson.com/womenriders.  Harley­Davidson Motor Company, the only major U.S.­ based motorcycle manufacturer, produces heavyweight motorcycles and a  complete line of motorcycle parts, accessories and general merchandise. For more information, visit Harley­Davidson's Web site 

THE END

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