Strategic Business Plan for Harley Davidson - Case Study Example

Strategic Business Plan for Harley Davidson Strategic Business Plan for Harley-Davidson Part I: Global Economy & Factors Affecting H-D 1.Identify H-Ds Motivations & Risks Motivations for Expansion The transportation vehicles industry keeps making larger sales. This increase echoes back into the industry whereby a potential for growth radiates. In addition, economic factors that primarily determine growth of the trailer and motor industries have improved. The factors include the reasonable interest rates, increase in individual income, moderate fuel prices and willingness of consumers to make purchases. Furthermore, the most significant factor to need to expand the Harley Davidson market arises from aging of the baby boom population. The strong demand for Harley motorcycles overseas has resulted in new dealership signings for the year 2014 (Bidgoli, 2010). Risks in Expansion After retracting from the merger with Buell Company, that makes racing motorcycles, the Harley Davidson indulged in international business. First, the company announced its expansion into the Indian market in 2009. However, as external opportunities for Harley Davidson increases, the company faces more threats in expansion. First the strategic threat to the company arises from the idea that it majors in luxury items. Following the past recession, fewer consumers may be willing to indulge in luxurious products. In addition, protection of patents in the international field may become cumbersome (Pride, Hughes & Kapoor 2010). 2. Explain H-Ds competitive advantage in Global Markets During the 1970s, the Harley-Davidson motorbikes faced a decline in the market shares. The competition that arose from Japanese competitors such as Kawasaki, Yamaha, Honda and Suzuki alongside the German BMW take credit for the decline. However, in its comeback, Harley Davidson phased out the weak models, became more selective and limited its sales and marketing. As a result, Harley-Davidson successively carved out its market niche as witnessed in the present. Following its expansion into the international market, the HD redefined its strategies by targeting a younger population. The HD management argues that the younger population tends to be technologically conscious and would be receptive of the cruiser market products. Subsequently, the HD unveiled the V-Rod motorcycle which promises to command a large market share of the cruisers. For its competitive advantage strategies, the company adopted newer objectives. These objectives include market expansion, product diversification and modification of the market fix (Pride, Hughes & Kapoor 2010). 3. Determine and explain entry strategies for global expansion The global economy presents two primary opportunities which positively impact on foreign sales. First, the increasing demand for motorbikes in the developing countries such as Southeast Asia. This increase can be attributed to an increase in income and magnified technological developments. Secondly, globalization highly contributes towards the establishment of international trade bodies. The regional trading blocks established by the international trade association help in enabling access to untapped markets. As a result, this minimizes trade barriers within foreign markets. These trends positively contribute towards stronger global economies (Oosterwal, 2010). Following the entry into international markets Harley Davidson needs to integrate licensing agreement into its cooperative strategy. This strategy of licensing would promote the Harley Davidson products towards grabbing significant foreign market shares with minimized risk of copyright violation. However, the licensing agreement may be exposed to some risks that may jeopardize the company’s strategies. The risk of creating competitors through the licensing agreement cannot be ruled out. In order to curb such malpractices, Harley Davidson should rather create licensing contracts. In addition, the core competencies should not be licensed out (Williams, 2005). 4. Recommend an Internet approach/strategy for H-D How the Internet adds value The internet could be used as a tool for sharing market information cheaply and quickly to large audiences. Through internet marketing, Harley Davidson could boost its image of superiority and durability. Being an iconic American brand, the Harley Davidson sells a lifestyle besides its products (Williams, 2005). Internet Business Models In the year 2010, Harley-Davidson established the “creativity model”. This model applies crowdsourcing as its creative and primary marketing development. Through crowdsourcing, the company gains insights from its loyal fans towards redesigning of its products. In addition, Harley-Davidson outsources its information base from media experts, product placement and digital marketing (Pride, Hughes & Kapoor 2010). Competitive Strategies The Harley Davidson website offers in-depth information. It even allows interaction of loyal customers with other riders of HD products in other towns. In addition, the company unveils newer product lines through its website so as to keep its customers up-to-date. In order to include women within its market, the Harley-Davidson introduced a website for devoted female riders. This website allows for interaction of women riders across different nations (Williams, 2005). Leverage E-Business Capabilities Harley Davidson’s website, www.harley-davidson.com functions to market the HD services and products. In addition, the website features an online catalog. This catalog allows for retailers to create wish lists of products and share them. The catalog also allows for placements of merchandise orders as well as locating a local dealer. The company completes purchases made over the internet by allowing authorized dealers to get involved. In addition, through the internet customers can source for after sale services that may be required (Silver, 2009). Part II: Corporate Leadership Develop the following: Current Direction Setting 1.Organizational Culture: In addition, evaluate the culture at Harley-Davidson (H-D) and define what attributes you think team members should possess in reaching the business goals set forth by the organization. If you were part of the management team at H-D, what motivational techniques would you implement to make these teams successful? The culture of Harley-Davidson employees fulfills vital tasks that contribute towards sustainability of the company. The companies thrives on its global mission, vision and strategies. The Mission statement states that Harley Davidson perpetuates and preserves itself through continuous improvement. In order to attain its financial goals, the company includes continuous improvement in the quality or services and products offered. The general public brand of Harley Davidson products boosts the image of the company as well as attracting new customers. Therefore, the company focuses more on adding value to its motorbikes than making larger profits. Additionally, HD defines its culture to include individuality and provision of best customer service and products. Through its mission statement, Harley Davidson encourages its employees to become the building blocks of the company. In this company, the employees serve as automatic brand managers (Pride, Hughes & Kapoor 2010). 2. Organizational Design: As you have been completing the Strategic Business Plan, the management at Harley-Davidson, has decided to take a team-oriented approach in various departments rather than the traditional, functional structure. Based on your knowledge of different types of teams and their focus, suggest what kinds of team strategies should be applied to each department. Be sure to explain your recommendations in detail. Employees at Harley Davidson take eight hours of refresher courses annually. These courses include subjects for learning strategies towards improving productivity and quality as well as statistical process control. In addition, the company institutes self-supervised team working across the company. The management encourages team work amongst the senior managers as well as line worker. In addition, employees’ upward communication with the management often gets rewarded. In order to benefit from the teamwork approach, the company needs to establish and sustain a satisfactory working environment. This favorable environment would be beneficial towards engaging and energizing employees to maximize their efforts. The current compensation program for the existing employees needs also to be competitive. Lack of employee satisfaction would result in difficulty in retaining productive employees or attracting new ones. Therefore, the management needs to be associated with affairs of the employees through dialog and teamwork (Oosterwal, 2010). 3. Leadership Traits At Harley-Davidson, authority for decision-making remains within three standing committees. The decentralized leadership supports twenty-five executive positions, otherwise known as circles of leadership. The twenty-five executives manage the company alongside making decisions towards production, corporate support and customers. Each of the groups within the company report directly to the Chief Executive Officer. The commitment observed across all levels within the organization positively contributes towards the company’s success. In favor of team work, the top management not only directs the lower level employees but it also seeks insights. Therefore, in order to ensure reliability of this strategy, the management encourages employees to take continuous education. This helps in building trust between employees and the management (Bidgoli, 2010). . 4. Ethical Organization Characteristics: Identify missing elements The Company’s Code of Business Conduct existed since the year 1992. This code of conduct directs how employees interact with various stakeholders of the company. In addition, the code of conduct defines aspects such as fair dealing, confidentiality and conflict of interest. Subsequently, the high reputation of the company arises from this aspect. A breach of the same would result in adverse effects on the operations of the company’s businesses. The company’s website, www.harley-davidson.com, offers periodical financial reports which aid in fostering credibility. In order to allow for global understanding, the website offers its information in eight different languages. Through the company’s proxy statement, waivers on the Code of conduct or the Conflict Process can be availed. However, disclosure requirements of the company echoes those of the New York Stock Exchange listing requirements (Rogoff, 2007). 5. Learning Organization Characteristics: Identify elements The management at Harley Davidson made discoveries towards ensuring the survival of the company. The ever competitive motorcycle industry demands unending commitment towards improvement of quality and assurance of efficiency in production. Therefore, the management structure a plan that ensured continuity in learning and improving the company. For a company to be successful, the management realized that it needed open dialog between its personnel of all levels. In addition, the company instituted a mandate to communicate the company’s mission and vision statement to its employees. As a result, the company created sense of ownership of the company’s vision and mission in its employees. Subsequently, the management organized for training of its employees on the company’s business environment so as to enhance understanding. This quest would have been difficult since the employees at HD are unionized. However, with assistance from the unions, the company registered immense success in educating its employees (Williams, 2005). Part III: Strategic Plan Summary Conclusions Harley Davidson being among the best five motorcycle companies appears as a successful venture. In order to sustain its success into the future, the company needs to address a few areas. First, the long-term debt owed by the company needs to be addressed. Here, the company would need to take advantage of its resilient brand image and a proliferating base of loyal customers. These two aspects could be manipulated to boost sales alongside minimum efforts in marketing. A stability strategy, in addition to boosting sales, would help the company to evaluate its current status as well as forecast for the future (Williams, 2005). Recommendations The Company needs to increase its customer base by increasing its marketing efforts towards untapped segments. Using the year 2000 as an example, the company sold approximately fifteen thousand motorcycles to women riders. In five years, the company sales doubled to thirty thousand sales a year. Upon analysis, the company discovered that women riders accounted for twelve percent of all its bike sales excluding merchandise and accessories. The dramatic increase in sales reciprocated in three hundred million revenues for the company. Currently, a projection on the financial reports suggest a further increase in sales. To ensure more sales, the company needs to invest more on its research and design department (Freeman, Hersch, Mishel & National Bureau of Economic Research 2007). . Implementation The unrelenting strengths of the company hold the basic potential for continuity of success of the company in the future. These strengths include the loyalty of its customers alongside the strong brand image. These factors may help the company to overcome the contemporary troubled economy. Despite the recession, loyal consumers would opt to shop for trustworthy brands. Therefore, the company needs to include product differentiation and cost leadership within its marketing strategies. Furthermore, following the launch of new segments for women riders and young riders, the company needs to ensure the proximal communication with its new customers (Silver, 2009). Discuss how you will implement your strategic plans, including how teams should be implemented in each department With the aim of meeting its targets and fulfilling its mission, the management of the company relentlessly executes newer strategies. In doing so, they focus on the value of relationships between the employees and the management. Consequently, the management enables the employees to convey a sense of ownership of the Harley Davidson identity. This helps the management to solicit commitment of the employees to the company. Education programs for the employees at Harley-Davidson impacts the company’s culture within its workforce. By instilling a desire to be better in its employees, the employees keep a focus on continuous improvement of the HD products. This focus ensures the ultimate consistency of employees with the policies, objectives, programs and strategies of the company (Plantes & Finfrock 2009). Develop a brief roadmap for implementation Harley can decrease its weaknesses by evading threats in the motorcycle market. For instance, while Harley Davidson competes on price, the company believes that its brand name and its ability to personalize its motorcycles allows it to request for a premium charge from its customers. In order to sustain its success, the company need to offer competitive prices over the recession period. In addition, the loyal customers need to reward. This could boost sales for the company. Also, the company needs to improve the quality of its products (Freeman, Hersch, Mishel & National Bureau of Economic Research 2007). Identify the primary benchmarks to assess success or failure The Company boasts of diversity in its portfolio. The motorcycle unit constitutes of three types of motorbikes. They include the custom, sportscar and touring. From the year 2008-2009, the company registered a decrease in shipment of its motorbikes. However, over the years, the company seems to be regaining its grip of the market. The company shipments constitute of the three types of products at varying amounts. The touring makeup thirty-eight percent, the customs compose forty-one percent while as the Sportster constitute twenty-one percent of the shipments. This diversification helps in mitigation of risks (Plantes & Finfrock 2009). Risks Expanding sales in foreign markets occurs within the long term business strategies of the company. However, this strategy exposes the company to risks that might dent its business. These risks include political unrest, instability of the economy, variations in the conditions of the labor market an impact of foreign, federal regulation on the operation of Harley Davidson’s business. As a result, the company may incur costs that may adversely affect its financial conditions, cash flows and even profitability (Scott, 2008). References Bidgoli, H. (2010). Supply chain management, marketing and advertising, and global management. Hoboken, NJ: Wiley. Freeman, R. B., Hersch, J., Mishel, L. R., & National Bureau of Economic Research. (2007). Emerging labor market institutions for the twenty-first century. Chicago, Ill: National Bureau of Economic Research. Oosterwal, D. P. (2010). The lean machine: How Harley-Davidson drove top-line growth and profitability with revolutionary lean product development. New York: American Management Association. Plantes, M. K., & Finfrock, R. D. (2009). Beyond Price: Differentiate your company in ways that really matter. Austin, TX: Greenleaf Book Group Press. Pride, W. M., Hughes, R. J., & Kapoor, J. R. (2010). Business. Australia: South-Western/Cengage Learning. Rogoff, E. G. (2007). Bankable business plans for entrepreneurial ventures. New York: Rowhouse Pub. Scott, M. (2008). Harley-Davidson Motor Company. Westport, Conn: Greenwood Press. Silver, A. D. (2009). The social network business plan: 18 strategies that will create great wealth. Hoboken, N.J: Wiley. Wayland, R. E., & Cole, P. M. (1997). Customer connections: New strategies for growth. Boston, Mass: Harvard Business School Press. Williams, E. (2005). The global entrepreneur: How to create maximun [sic] personal wealth in the new knowledge-information era. New York: IUniverse, Inc. Read More