2. • Harley-Davidson, often abbreviated H-D or
Harley, is an American motorcycle
manufacturer.
• From 1977 to 2014 the only motorcycles sold
to the public under the Harley-Davidson
brand have been heavyweight motorcycles
designed for highway cruising, with engine
displacements greater than 700 cc.
• Harley-Davidson motorcycles, or "Harleys",
are noted for the tradition of heavy
customization that gave rise to the chopper
style of motorcycle.
3. On the verge of bankruptcy in the early 1980's,
Harley-Davidson found itself facing severe market
conditions and heavy foreign competition.
Through applying unique strategies, clever
positioning, hard work and passion turn their last
remaining American motorcycle manufacturer from
the rust bowl of the Midwest into a Fortune 500
company success story.
Harley-Davidson accomplished this through not
only focusing on the four basic "P's" of marketing,
but by adding a fifth "P" -PEOPLE, the most
important ingredient in any business turnaround.
4. Harley-Davidson was found in 1903 by Arthur
and Walter Davidson and William Harley. By
1918 Harley-Davidson became the worlds
largest motorcycle company by producing
28000 motorcycles.
The first downtown in the firms fortunes
occurred in the early 1920s when the
production dropped to 10,000.
Despite the decline it invested in R&D and a
new four cylinder engine.Hence minor
increase of reliability was seen till 1930s.
5. With the advent of the second world war
and military use of Harley Motorcycles
production soared to 29000 in 1943.
During the post war period, Harley-
Davidson experienced pressure from
foreign imports, mostly from Europe.
By 1952, weak demand for motorcycles and
Harley-Davidson’s continuied market share
losses to European imports placed a heavy
burden on firms financial resources.
6. In the mid 1950s registrations in the US
amounted to 550,000 units, Harley –
Davidson remaining the undisputed leader
with over 60% market share and $20 million
sales.
in the late 1940s and earl 1950s Harley-
Davidson established a image of ran power
which became its major selling point.
The growl of the Harley engine is described
as “a bassaprofundo thump that makes other
motorcycles sound like sewing machines.
7. In 1959 Honda uncovered a large untapped
customer base of older males and younger
women.
By 1965 Honda made a substantial inroads in
to US industry one out of every two
motorcycles sold in US were of Honda.
Other Japanese firms such as
Suzuki,Yamaha and Kawasaki soon followed.
Between 1963 and 1973 motorcycles sales
increased at an annual rate of 33%
Soon japanese manufacturers accounted for
about 85% of the US motorcycle sales.
8. Harley-Davidson was aquired in a friendly takeover
by AMF.
The influx of new capital allowed it to expand
production from 15,475 units in 1969 to 70,000 in
1973.
In order to increase production less skilled workers
were added and quality decreased to all time low.
To challenge Japanese manufacturers in smaller
and faster growing segment it entered a joint
vencture with Ameracchi of italy.
With the little interest in smaller Harley bikes the
firm terminated its Italian joint vencture in 1978.
9. In 1975, to target Harley Davidsons market
segment Honda introduced Goldwing , a
1000cc motorcycle.
Soon Kawaski followed.
The falling prices resulted in economic
downturn and declining overall market in
US.
Between 1970 and 1980 Harley –
Davidsons share declined over by 80%.
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22. To address the challenge, the team met for four
days of strategic planning and went through a
process of analyzing the strengths and
weaknesses of not only Harley-Davidson but the
competition.
What came out of the meeting was a strategy "turn
left when the competition turns right", and
application of that strategy to the basic four P's of
marketing. That is: product, price, place and
promotion.
In other words, Harley decided it was almost
impossible to compete against the competition on a
heads-on basis. So they decided to be the
alternative and do things that the competition
couldn't do. For an example, Mr. Honda cannot ride
from LA to Milwaukee and raise $100,000 for
muscular dystrophy. Willie G. Davidson does!
23. Applying this strategy to product, a team of
manufacturing and engineering personnel
traveled to Japan to study how they made
motorcycles.
What they came back with, compelled Harley
to introduce just-in-time inventory, statistical
operators control, and employee involvement.
Applying the strategy of "turning left when the
competition turns right", focused the Styling
Department to implement a classical,
evolutionary design for motorcycles, rather
than the revolutionary design of something
new every year from the competition.
24. Applying the strategy to price, Harley-Davidson promoted the
fact that their motorcycles retain the residual value.
Harley-Davidson drove a wedge between Harley and the
competition by communicating a comparison of the fact that the
competition's motorcycles depreciated 25% - 50% in the first
two years.
Over the last 30 years, the factory, the dealers and the riders
have raised over $70,000,000 for this association.
Applying the strategy to place, Harley initiated a store redesign
program with its dealer network to create an atmosphere where
the customers would feel not only comfortable in coming to a
Harley dealer, but use it as a meeting place, a destination that
attracts not only Harley riders, but other potential customers.
The program has generated tripling revenues with the majority
of the dealer network and is an award winning program that has
been recognized by leading retail consultants.