rices considerably lower than Harleys, which were still being manufactured under the American system of maintaining large inventories of parts and paying higher wages. The Japanese who utilized "just in time" inventory planning and Total Quality Control took over the U.S. market.
As Harley watched market share disappear, it reacted in a series of bad management moves. According to the case study, one executive stated "about 40% of the youth market doesn't know our smaller machines exist" (p. 4). In this highly competitive industry, Harley had to rely on its name and logo as the premiere marketing tools but did little else to maintain share or compete.
Harley was not always the only U.S. maker of motorcycles. In the early 1900s a motorcycling "Big Three" included the Indian
Motorcycle Co. of Springfield, Mass., and the Excelsior Motor
Manufacturing and Supply Co. of Chicago. Excelsior made the Henderson Four, a luxurious four-cylinder model that carried Carl Clancy around the world in 1913. The company went out of business in 1931 during the Depression. In 1912 the Henderson Four was the first motorcycle to break 100 miles per hour. Excelsior-Henderson cycles set early world marks in transcontinental races. It is mentioned here because Excelsior is back in business, although not posing much of a threat at this point of time.
Figures from the Motorcycle Industry Council in Irvine, Calif., show how the new-cycle market has evolved in recent years. In 1974, when 1.2 million new motorcycles were sold in the United States, Harley-Davidson's share was 68,200 machines. Total U.S. motorcycle registrations were 5 million. By 1985, new sales totaled 1.26 million, boosting registrations to nearly 5.22 million. But as competition from cheaper Japanese models increased, Harley's sales dropped to under 35,000.
Harley-Davidson had a monopolistic hold on the American motorcycle industry for
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