Strategic plan of Harley Davidson
Executive SummaryThe report below intends to provide a brief idea about the current business plan of Harley Davidson Company by presenting a brief outline of strategies of the company. The company intends to adopt these strategies in the current year. The information provided in this report is crucial in the sense that it can be used according to business and competitor intelligence needs.
The TOWS analysis report has also been provided to access the strengths and weaknesses of the company. This Harley Davidson Company’s TOWS analysis is an essential source of top level company data and information. The TOWS analysis investigates the company’s history and products and provides a summary analysis of its key revenue lines and strategies (“Harley Davidson Inc, SWOT Analysis”).
- Situation Overview
The following analytical tools have been utilized to analyze the present condition of the company and plan an effective business strategy accordingly:
- TOWS Analysis
The companies’ sales have a severe threat from the ongoing recession. The demand from customers with high disposable income cannot be expected to be the same. The prevailing economic situation is undoubtedly a difficult one. Law suits and imposition of tariff on steel imports are making it a more difficult. Moreover huge debts are cutting down opportunities for further sales. Competition has also increased with European markets increasing standards.
The market for Harley Davidson is free from internal competition. No potential rivals are there in US markets. It has always been one of the most admired US companies and stakeholders are also showing confidence. This gives the company numerous opportunities for customer retention as well as attracting new customers in international markets such as India:
The main weaknesses have been in the company’s pricing system. It has been continuously charging high prices. There has also been inventory lag as the company is cutting down its production. Large number of recalls is hampering its image in markets. It has now adopted a closure of Bruell Motorcycle brand. Moreover the company has not paid enough attention on the growing number of female riders. Bad performance in European markets is an outcome of all this. In 2009 the company suffered a loss of 90 percent (Gun, 2010). In order to eliminate or at least minimize its weaknesses the company needs to adopt the following strategies:
The company needs to grab attention from youth by lowering prices. The Bruell brand can be reopened for this purpose. The inventory lag problem needs some serious attention and it also needs to plan out something attractive for female riders. Customer retention can be a reliable instrument for better business. This can be achieved through after sales services. Overall markets should be expanded.
‘After sales offers’ can heal the damage caused by lawsuits. Credit sales should be stopped to reduce chances of loss. The company has to focus more on its own brand rather than Bruell. The production standards also need to be increased.
Harley Davidson has always been a very well known brand name. Even resale fetches higher price compared to its rivals. The Licensed name is now being used in other products as well. The company also seeks to maintain a good working relation with employees by treating unionized employees as partners. All this give the company a chance to adopt the following strategies:
The company can make use of its brand name to capture US market. The supply chain should be managed according to demand. With strength in domestic market it should try to increase its market share in US.A fair amount of concentration also needs to be diverted towards the international markets like India and China in the long run. Substantial development is required to improve global reach and image.
Concentrating on Harley Davidson brand the company needs to manufacture cheaper variety in order to capture the lower US market. Credit sales should be stopped to check increasing debts. (Madson; “Harley-Davidson, Inc. 2009 Annual Report”; Gun ; Barbour et al, 11-16, 20-26, 33-37)
Harley Davidson should opt for a growth strategy.
Market focus– The Company needs to focus on domestic as well as international markets. Establishment of more foreign dealerships will certainly help. New smaller models should be introduced for international markets like Europe and Japan. The company can plan for manufacturing plants and office in Asia to reduce transportation costs. It needs to eliminate potential rivalry for business expansion. Advertising can be a good option.
Production Portfolio Analysis-It needs to increase production. Internal process has to be controlled better for reducing defectives products and recalls. Something interesting and exciting should be introduced for female riders.
Cost reduction– the Company should stop credit sales. It can plan manufacturing plants and offices in Asia to reduce transportation costs.
Barbour, Abukar Abdulaziz., Behr,Nikki, Bowman, Lei., Monacella, Josh, “Analysis of Harley Davidson Corporation”, Business Decision-Making, 2006, November 18, 2011 from: (Doc), cslab103.cs.edinboro.edu/~a200353a/csci304/assign2/HD.doc
Gun, Jenny, “Harley Davidson Reports devastating 89.7% Annual Income Loss for 2009- made $70 million last year”, 2010, November 18, 2011from: http://www.asphaltandrubber.com/news/harley-davidson-2009-earnings/
“Harley Davidson Inc, SWOT Analysis”, Research and Markets, 2010, November 18, 2011 from: http://www.researchandmarkets.com/reports/481474/harley_davidson_inc_swot_analysis
“Harley-Davidson, Inc. 2009 Annual Report”, Asiaing.com, 2010, November 18, 2011 from: http://www.asiaing.com/harley-davidson-inc-2009-annual-report.html
Madson, Bart, “Harley Davidson Down $55 Mil in 2009”, Motorcyle USA, 2010, November 18, 2011 from: http://www.motorcycle-usa.com/568/5601/Motorcycle-Article/Harley-Davidson-Down–55-Mil-in-2009.aspx