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An Analysis of Harley-Davidson's Strategy

An Analysis of Harley-Davidson's Strategy

The Harley-Davidson eagle logo is one of the world's 10 most-recognized brands, behind McDonald's, Coca Cola, and Microsoft(Johnson & Scholes 1996;Nee 1998; Mintzberg 1994) and, in 2002, the company celebrated its 100th Anniversary. In the company's annual report for 2002, published on its website, the Chairman of the Board, Jeffrey L. Bleustein, stated that the company, in 2002, produced 263,653 motorcycles "a 12.5% increase over 2001. In turn, motorcycle revenue was up 18.3% to $3.16 billion. Anticipating another strong year, we have set a production target of 289,000 units for 2003. In the United States, Harley-Davidson retail sales climbed nearly 18% in 2002. As the undisputed leader in the domestic heavyweight motorcycle market, we are also steadily growing our business in other regions of the world" (Bleustein 2002).

Financial analysts and market observers tend to track Harley's recent growth as a result of a strategy of innovation that began in the 1960s when Harley, which had for all practical purposes owned the market for heavy road machines was passed by Honda which was using several techniques of "Just in Time" manufacturing to pare costs, increase productivity, and compete with Harley (Davidson 2002). Davidson, in his historical account of the company (written as the grandson of one of the founders, admits that the company underestimated the threat of the Japanese imports, and let some design innovations slip by.

In the company's annual report, Bleustein states that the company has reengineered its operations to look for efficiency in all areas, has expanded R & D budgets, including writing down a large amount of R & D expense and has done extensive marketing to grow the brand name. Gene Marcial, writing in Business Week, confirms this promise. He explains that Harley-Davidson's primary strategy involves rolling out "new products for the young crowd in 2003-04 ...

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