Harley Davidson Case - Coursework Example

Strategic Management: Case Analysis: Harley-Davidson- Case 16 Name Institutional Affiliation Date Executive Summary This is a strategic analysis of Harley Davidson’s company, one of the world’s manufacturers of customized motorbikes. The analysis consists of Harley-Davidson’s mission, corporate governance, corporate culture, SWOT analysis, and recommendation for future growth. Based on the analysis, it has been recommended that Harley-Davidson’s adopts a growth strategy to ensure its consistency in both old and new markets. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 6 I.Current Situation 6 A.Past Corporate Performance Indexes 6 II.Corporate Governance 9 A.Board of Directors 9 B.Top Management 10 C.Corporate Social Responsibility and Ethics 10 IV.Internal Environment: Strengths and Weaknesses (IFAS) 18 A.Corporate Structure 18 Harley-Davidson’s decision-making procedure is decentralized according to the appropriateness of a department to address certain issues or make specific decisions (Harley-Davidson, Inc). 18 The business compartmentalization of the company includes motorcycles and accessories, and Financial services (Ryan & Wheelen, 2008). 18 B.Corporate Culture 18 Harley-Davidson’s culture creates an organizational environment of deep emotional binding, which is shared with its customers via the company’s goods, services, and experiences (Harley-Davidson, Inc). 18 The organizational culture promotes stronger bonding between the top-management and the non-management workers by implementing the FISH philosophy throughout the entire organization (Harley-Davidson Inc. HOG). 18 The company enhances fairness, accountability, and financial transparency, to all its stakeholders (Ryan & Wheelen, 2008). 18 C.Corporate Resources 18 Marketing 18 Harley-Davidson’s marketing is categorized into several different areas that are common for most of the companies (Ryan & Wheelen, 2008). 18 These include Customer Events, Dealer Promotions, Direct Mail Advertising, Magazines, TV commercials, Public Relations, and Cooperative Programs with Harley/Buell. HD’s promotions are often seen at many popular sporting events such as the racing sports, and UFC. 19 Finance 19 The company has grown from depending on lender-funding to now funding itself. In 1985, HD was very close to shutting down when Citicorp, which was then Harley’s main lender, denied them money and it was difficult to find another lending company (Mitchel, 1997). 19 Four hours to shut down, HD made a deal with Heller Financial and at least the company was saved from shutting down. Currently, HD is funded by the HD Financial Services which is the main lending company for HD motorcycles among other several assistance factors, thus the company is able to fund itself (Mitchel, 1997). 19 Research and Development (R&D) 19 HD is of the view that R&D of their custom and touring motorcycles is a large part of the process of competing against its rivals; hence it provides a competitive edge. 19 In 2005, HD spent $178.5 million, in 2006, $177.7 million, and in 2007, $185.5 million in researching in areas such as style, manufacturing, and purchasing (Ryan & Wheelen, 2008). 19 Operations and Logistics 20 In the U.S alone, HD has 684 dealerships in the United States of which 307 of them were also Buell dealers. 20 In addition, there are 107 secondary retail locations (SRLs) sixty-eight alternate retail outlets (ARO’s), and twelve seasonal retail outlets (SROs). This makes the U.S to be the largest sales supplier of HD’s motorcycles (Ryan & Wheelen, 2008). 20 Human Resources 20 The company has employees possessing unique skills and share in the organizational culture (Harley-Davidson Inc). 20 About 50 percent of the manufacturing employees of Harley-Davidson’s own their own Harleys and buy from dealerships so they can experience first-hand what they are contributing as a workforce. HD has roughly 9,000 employees (Wheelen & Ryan, 2008). 20 Information Systems 20 Integrated technological resources where HD can use information systems to ensure the smooth flow of production (Mitchel, 1997). 20 V.Analysis of Strategic Factors (SWOT & SFAS) 22 A.Key Internal and External Strategic Factors 22 B.Review of Mission and Objectives 25 Harley-Davidson’s mission and objectives concentrate on the customers and its action of acquiring Buell falls within this mission (Ryan & Wheelen, 2008). 25 The current mission and objectives are still relevant for Harley-Davidson and the company should seek ways that can help it to capitalize on the international market. 25 VI.Alternatives and Recommendations 25 A. Alternatives-Pros and Cons 25 a.Growth strategy 25 Growth strategy includes horizontal growth strategy through concentric diversification, joint ventures, and strategic alliance. 25 This can be done through target new market segments by developing products and services for other demographics for example, females and younger bikers in various cultures internationally (Harley-Davidson Inc. HOG). 25 b.Stability Strategy 26 This involves turnaround activities, liquidating unprofitable foreign plants and consolidating operations (Wheelen & Hunger, 2006). 26 B.Recommended Strategy (Growth strategy) 27 VII.Implementation 28 VIII.Evaluation and Control 28 References 29 Introduction Harley-Davidson (HD) is a Wisconsin motorcycle manufacturer that began in 1903 when family members Walter, William Harley, and Arthur Davidson designed the pioneer HD motorcycle (Wagner, 2003). Today, the company focuses on heavy weight custom and touring motorcycles. HD owns Harley Davidson Financial Services (HDFS) and Buell Motorcycle and has about 7,900 employees, and more than1, 500 dealers widely distributed in about thirty 30 countries (Ryan & Wheelen, 2008). Its business from the international locations generates sales of approximately 18 percent, while 3.2 percent is from research and development (R&D) (Ryan & Wheelen, 2008). Harley-Davidson’s vision is focused on fulfilling dreams which are motivated by the several world roads by offering special motorcycles and client experiences. The company fuels “the passion for freedom in our customers to express their own individuality” (Harley-Davidson’s Inc). This paper addresses Harley-Davidson’s current performance in the industry, industry analysis, and strengths, weaknesses, opportunities, and threats (SWOT), as well as recommends alternative strategies to promote its growth in the current business environment. I. Current Situation A. Past Corporate Performance Indexes Harley-Davidson’s started barely out of nothing significant but has since then grown into one of the There is a downward trend when comparing 2007 and 2008 data (Ryan & Wheelen, 2008). The revenue earned by the company in 2007 was $5.73 billion but this went down $to 5.59 billion in 2008. Net income dropped from $933.8 million in 2007 to $654.7 million in 2008. The company sold 330, 619 motorcycles in 2007 but this number went down to 303, 470 in 2008. Earnings per stock share were $3.74 in 2007 and decreased to $2.70 in 2008 (Ryan & Wheelen, 2008). B. Strategic Posture Current Mission Harley-Davidson’s mission states that “We ride with our customers and apply this deep connection in every market we serve to create superior value for all of our stakeholders” (Harley-Davisdon Inc). Current Objectives Harley-Davidson’s objective is to make dreams come true as motivated by the several roads of the world by providing customer and motorcycle experiences that are out-of-this world in order to drive the desire for freedom of customer expression in having products customized for their individual use (Ryan & Wheelen, 2008). Current Strategies Harley-Davidson put up a corporate business-level strategy which focuses on cost structure (Global Data, 2012). This involves establishing the right cost structure through realigning fixed costs and priority needs through actions such as reducing distribution operations, consolidating facilities, and reducing excess capacity to increase efficiency. Another way is to obtain funding for HDFS by readjusting the costs of financing bikes through Harley-lending, and also establishing structured proposals with financial organizations to fund and approve the HD mania (Ryan & Wheelen, 2008). The company also strives to establish more lucrative offerings while sticking to being provided for low interest rate. HD targets to invest in the Harley-Davidson brand by intensifying product development and marketing, for example through new bike models, museums, and trade-up programs. The company also targets its marketing or promotional campaigns through various kinds of channels for instance loyalty rewards and social media (Ryan & Wheelen, 2008). Current Policies Harley-Davidson embarks on “customer for life” policy. HD treasures the breadth and strength of the emotional bonds which it has established with its clients through the offered products and services, as well as experiences (Ryan & Wheelen, 2008). The company is driven by trust and brand loyalty given by the customers in exchange for offering prime quality products as well as experiencing a lifetime ownership and satisfaction with the products. HD exemplifies this engagement by holding culture based on personal responsibility and stewardship to be exceptional in every activity that the company undertakes (Ryan & Wheelen, 2008). II. Corporate Governance A. Board of Directors The company is governed by a board of directors which consists of 13 board members of which three are affiliated/internal members (Ryan & Wheelen, 2008). Positions for key executives are Directors, Chairman of the Board, Date of Board Commencement, Nominating and Corporate Governance Committee, Audit Committee, Human Resource Committee, and other Directorships. The key executives are five and entail 1) Board’s Chairman 2)Chief Financial Officer/CFO and Senior Vice President 3) Buell Motorcycle Company President and Chief Operating Officer, and Vice President of Harley-Davidson Motor Company 4) President and Chief Operating Officer of HDFS 5) President and Chief Operating Officer of Harley-Davidson Motor Company. The audit committee comprises of six executives, the nominating committee comprises of 11 executives, while the Corporate Governance Committee comprises of 11 executives (Harley-Davidson Inc, Hog). The people selected to be in the Board are seasoned leaders from an array of industrial experience and who gather on a regular basis to review the objectives of the company and plan for its future growth. The Board of Directors draws on their diverse backgrounds, of age, gender, and experiences. They also share the HD culture and enthusiasm and make sure that the decisions arrived at by the organization enhances fairness, transparency in financial matters, and accountability from all the stakeholders (Harley-Davidson Inc). B. Top Management Harley-Davidson’s top management comprises of three main segments namely: Harley-Davidson Financial Services, and Buell Motorcycle. The top five executives are awarded with discretionary and performance-based bonuses for winning initiatives and strategies, for example, the motorcycle company restructuring in 2011. In the same year, the company produced a $599.1 million profit from $146.5 million in 2010. Top management is involved in initiatives that study the business environment and coming up with strategies to ensure the company retains its market value. Top management responsibilities include aligning employee motivation with company goals. As such activities like team building, training and development, are planned and implemented by the relevant top managers. The top management is firmly committed to the people-building philosophy that its workforce is made of are rational thinking human beings that also need to be supported to establish and grow (Harley-Davidson Inc). C. Corporate Social Responsibility and Ethics Harley-Davidson has taken a great initiative to establish an ethical business which follows a transparent code of business conduct (Harley-Davidson, Inc.). Corporate social responsibility allows the company to focus on expanding its business but in a manner which is responsible and that which allows the environmental-conscious customers to be comfortable about their purchases (The Harley-Davidson Foundation). HD’s code of business conduct is shaper under the major requirements of telling the truth, being fair, keeping promises, respecting the individual, and encouraging intellectual curiosity (The Harley-Davidson Foundation). These five principles have propelled HD’s business in a responsible direction that benefits the customers, employees, and community at large encouraging them to represent the individual self and the company in a socially responsible manner. HD takes immense pride in getting involved in social issues for example, through establishing the Harley-Davidson Foundation. The mission of the foundation revolves around meeting the basic needs of the communities in which they work and also partnerships with charitable organizations that assists the company to invest in education, healthcare, and the environment. Some of these organizations are popular and include YMCA, Big Brothers and Big Sisters organizations, and Disabled American Veterans (The Harley-Davidson Foundation). Reaching out to the community provides HD the opportunities to do good as well as attract a broader market of potential buyers that are conscious enough to buy from a socially responsible firm. The foundation targets areas of greatest need among underserved populations. III. External Environment: Opportunities and Threats (EFAS) A. Social Environment The social environment is analyzed based on the strengths, weaknesses, opportunities, and threats that Harley-Davidson’s face as it tries to establish a competitive advantage (Chapman, 2006). Political-Legal One of the key strengths that Harley-Davidson has in regards to the political/legal environment is being considered as an American icon in the motorcycle business (Wheelen & Hunger, 2006). Opportunities include emerging economies of China, India, and others providing available markets that the company can expand into. Motorcycles are also being licensed in major cities and their suburbans. The political environment can also provide threats which for Harley-Davidson include the need to meet both U.S and international EPA standards and the need to adhere to traffic and motor safety regulations in both U.S and International level (Wheelen & Hunger, 2006). Economic Opportunities in the economic environment include the consistency in the trend of the Gross Domestic Product (GDP) since 2008 as it has not shown severe variation from 42 and 47 KUSD (Global Data, 2012). The company has also experienced a double digit growth despite economic recession period and this can encourage investors. Opening new dealership and addition of Buell motorcycles is also an opportunity that will increase the size of the market and heighten the sales (Hutchison, 2006). Threats in the economic environment include global recession which is affecting economies worldwide and therefore Harley-Davidson has to take a stronger effort to strengthen its place in the market. In addition, the rise in process for several vital raw materials such as fuel prices, vital for the manufacturing sector (Global Data, 2012). Socio-Cultural Opportunities in the socio-cultural environment include the increase of riders, and generally consumers becoming more safety conscious hence the need to satisfy this segment. Also lifestyles are becoming more diverse with several Harley Clubs and Harley academies for instance the Rider’s Edge being created around the globe. There is also emerging interest in Harley-Davidson’s products from various demographic categories beyond the US. The average buyer of a HD motorcycle in the U.S is a male, probably married and most likely in the mid-forties. This situation is impacted by prompt retirement disposition and healthcare schedules which restrict the luxurious want to own a new motorbike. Technological Opportunities in the technological environment include increased advancements in technology as customers prefer energy-saving and lucrative models today enabled by technology (Wheelen & Hunger, 2006). HD has also established an online catalogue to tap into the market of increasing Internet users (Ryan & Wheelen, 2008). Technological strengths include implementation of the ‘just-in-time’ inventory procedures (Ryan, & Wheelen, 2008). Harley-Davidson is also a major manufacture of, and utilizes the V-Engine formation. HD also has an array of products that match with established performance, expedition and custom. B. Task Environment (Industry Analysis) This is an analysis of the industry based on the five porter forces (Porter, 2008). Low buyers power as the customers are individuals. There is also high level of differentiation and customer loyalty. There are over 30 different HD models ranging from $6, 695 to $ 20,645, and eight Buell bikes models available ranging from $4,695-11, 995.11 (Ryan & Wheelen, 2008). Therefore, consumers can exercise many options of identifying a bike that meets their needs while staying within their preferred price range. There is also less number of dealers relying on individual customers. Moderate to high suppliers’ power as HD has 684 independent –owned full service dealerships and also 323 foreign locations (Ryan & Wheelen, 2008). The supplier is consolidated. HD outsources steel and basic electronics for huge contracts. Assembly of parts takes place within the company. It is also easy to switch suppliers (Porter, 2008). High rivalry where competition is intensified because many motorcycle manufactures strive to improve designs and attempt to compete with HD for new consumers (Porter, 2008). Japanese companies like Honda, Yamaha, and Suzuki have high existing assets that can match the ones for Harley-Davidson (Ryan & Wheelen, 2008). There are also high exit barriers, and the industry growth has been projected at 3.4 percent. HD has also formed strategic alliance between Suzuki and Kawasaki through product diversification (Ryan & Wheelen, 2008). Substitution threat is medium-low where Honda is the biggest competitor for Harley-Davidson because of its many similar lines of bikes for example, the small crotch rockets and the bigger touring and cruising bikes (Ryan & Wheelen, 2008). Otherwise, there are very few substitutes for luxury bikes. HD also offers cars, bicycles and sports automotives reducing the threat of substitution. Low chances of new entrants as dependent on economies of scale, high capital investment, accepted emission, and channel of distribution. Switching costs are moderate to high, as well as hi-tech involvement and small scale producers (Ryan & Wheelen, 2008). Table 3: External Factors Analysis (EFAS) Summary Table Key external factors Weight Rating Weighted score Comments Opportunities The international market for heavy- weight is expanding and is has surpassed that of the U.S. Europe’s demand for Harley-Davidson forms the largest proportion at international platform and hence stands for the biggest market of heavy motorcycles. Economies of Asia are thriving with emerging markets of China and India seeming unaffected by the recent global recession. Strategic coalitions with Ford Motor Company (FMC) and other automotive manufacturer can be conducted. Riders from younger age groups are increasingly becoming the target market for bikes Comparing trends in history, interest rates are now low when using different dealers. Growing demand for motorbikes in the U.S. Customers value good quality products and HD bikes are perceived this way hence retaining loyalty. 0.12 0.06 0.05 0.04 0.04 0.08 0.06 0.1 2 2 2 1 4 3 4 4 0.24 0.12 0.1 0.1 0.16 0.24 0.24 0.4 Increasing sales from foreign markets Market segment for improved quality More market opportunities Channel for further growth Helps market remain relevant as the baby boomers were previously major customers. Will keep costs low Market expansion Fulfils customer-for-life policy Threats Increasing fuel prices. HD vehicles are heavy-weight bikes hence this is the main threat being experienced as their fuel-uptake is high. Mean age of buyers for HD is 42 years but rising. Noise standards in the European Union’s (EU) are tighter than those of US’ EPA and have intense environmental take. Some HD competitors have more resources in regards to marketing and finances in addition to being more diversified. Importing tax on the international scale, and hikes in cost of labor. The stalemate of U.S federal initiatives to make credit market programs stable may put an adverse impact on capital markets and restrict the firm’s accessibility to funding from the capital market. 0.12 0.04 0.1 0.05 0.08 0.06 2 2 3 1 2 2 0.24 0.08 0.3 0.05 0.166 0.12 High cost of production Yet baby-boomer generation is reducing, lowered customer numbers. Restrictions that can interfere with smooth business operations. Increased competition Increased expenditure Reduced funding possible. Total Scores 1.00 2.49 Source: Ryan & Wheelen, (2008). IV. Internal Environment: Strengths and Weaknesses (IFAS) A. Corporate Structure Harley-Davidson’s decision-making procedure is decentralized according to the appropriateness of a department to address certain issues or make specific decisions (Harley-Davidson, Inc). The business compartmentalization of the company includes motorcycles and accessories, and Financial services (Ryan & Wheelen, 2008). B. Corporate Culture Harley-Davidson’s culture creates an organizational environment of deep emotional binding, which is shared with its customers via the company’s goods, services, and experiences (Harley-Davidson, Inc). The organizational culture promotes stronger bonding between the top-management and the non-management workers by implementing the FISH philosophy throughout the entire organization (Harley-Davidson Inc. HOG). The company enhances fairness, accountability, and financial transparency, to all its stakeholders (Ryan & Wheelen, 2008). C. Corporate Resources Marketing Harley-Davidson’s marketing is categorized into several different areas that are common for most of the companies (Ryan & Wheelen, 2008). These include Customer Events, Dealer Promotions, Direct Mail Advertising, Magazines, TV commercials, Public Relations, and Cooperative Programs with Harley/Buell. HD’s promotions are often seen at many popular sporting events such as the racing sports, and UFC. Finance The company has grown from depending on lender-funding to now funding itself. In 1985, HD was very close to shutting down when Citicorp, which was then Harley’s main lender, denied them money and it was difficult to find another lending company (Mitchel, 1997). Four hours to shut down, HD made a deal with Heller Financial and at least the company was saved from shutting down. Currently, HD is funded by the HD Financial Services which is the main lending company for HD motorcycles among other several assistance factors, thus the company is able to fund itself (Mitchel, 1997). Research and Development (R&D) HD is of the view that R&D of their custom and touring motorcycles is a large part of the process of competing against its rivals; hence it provides a competitive edge. In 2005, HD spent $178.5 million, in 2006, $177.7 million, and in 2007, $185.5 million in researching in areas such as style, manufacturing, and purchasing (Ryan & Wheelen, 2008). Operations and Logistics In the U.S alone, HD has 684 dealerships in the United States of which 307 of them were also Buell dealers. In addition, there are 107 secondary retail locations (SRLs) sixty-eight alternate retail outlets (ARO’s), and twelve seasonal retail outlets (SROs). This makes the U.S to be the largest sales supplier of HD’s motorcycles (Ryan & Wheelen, 2008). About twenty two percent of the company’s sales came from foreign operations in Middle East, Europe and Africa at 370 dealers with 323 being synchronized with Buell, Asia-Pacific 130 dealers with fifty seven selling both brands, Latin America with 57 selling both brands of motorcycles (Ryan & Wheelen, 2008). Human Resources The company has employees possessing unique skills and share in the organizational culture (Harley-Davidson Inc). About 50 percent of the manufacturing employees of Harley-Davidson’s own their own Harleys and buy from dealerships so they can experience first-hand what they are contributing as a workforce. HD has roughly 9,000 employees (Wheelen & Ryan, 2008). Information Systems Integrated technological resources where HD can use information systems to ensure the smooth flow of production (Mitchel, 1997). Table 4: International Factors Analysis Summary Table (IFAS Matrix) Key Internal Factors Weight Rating Weighted Score Comments Strengths Self-reliable financially Great marketing tactics Products are economic friendly. Acquiring Buell 0.15 0.1 0.05 0.2 5 4 3 5 0.75 0.4 0.15 1 Likelihood for lenders to step in if the ability to self-finance fails. Commonly used ways in the market. Save gas and space. Drives sales up with more options. Weaknesses Baby boomer era is coming to an end Intensified competition from several Japanese firms Few distributors in foreign operations. Fluctuating seasons 0.15 0.15 0.1 0.1 2 2 2 4 0.3 0.3 0.2 0.4 It drove sales since most retirees owned a Harley. Costs more to own and repair. This has an impact of low sales in overseas Creates sales spikes but then drops Total Scores 1 3.5 Source: (Ryan and Wheelen, 2008) V. Analysis of Strategic Factors (SWOT & SFAS) A. Key Internal and External Strategic Factors SWOT analysis highlights the strengths, weaknesses, opportunities, and threats that the company faces while the SFAS shows the weight of these components and what they mean for the company (Chapman, 2006). The key strengths that Harley-Davidson has include acquiring Buell, and being self-reliable financially. The main weaknesses are competition with several Japanese companies such as Honda, Suzuli, and Yamaha. The baby boomer era especially in the U.S is coming to an end yet these were the major customers for HD products. Seasons also affect the sales of the business, as there are periods of high sales followed by sharp drops in sales (Ryan & Wheelen, 2008). The main opportunities for the company include increased growth in international markets especially the emerging markets of Asia. The addition of Buell line of motorcycles has contributed to the opportunity of the company having more products hence the number of customers that are targeted has increased (Ryan & Wheelen, 2008). The main threats for the company include global economic recession, and the escalating fuel prices. Being a manufacturing company, it depends a lot on fuel and the escalating prices of fuel will definitely affect the company’s costs and expenses (Ryan & Wheelen, 2008). Table 5: SFAS Matrix Duration Comments Strategic Factors Weight Rating Weighted Score Short Intermediate Long S4 Acquiring Buell 0.2 5 1 X Drives sales up with more options. S1 Self Reliable Financially 0.15 5 0.75 X X Seems to be possible to end but lenders would step in. W4 Seasons 0.1 4 0.4 X Creates sales spikes and drops. W1 Baby Boomer era ending 0.15 2 0.3 X Drove sales O3 Addition of Buell motorcycle line 0.2 5 1 X X Soaring profits from adding the Buell line to HD dealers O2 Double digit growth in international market 0.1 4 0.4 X Doubled growth in the international dealer network for 2007. T2 Economic recession 0.2 2 0.4 X X Consumers may keep aging motorcycles or wait to purchase T1 Rising fuel prices 0.3 1 0.03 X Steady sharp rise in fuel prices since 9/11 Source: Ryan & Wheelen (2008). B. Review of Mission and Objectives Harley-Davidson’s mission and objectives concentrate on the customers and its action of acquiring Buell falls within this mission (Ryan & Wheelen, 2008). The current mission and objectives are still relevant for Harley-Davidson and the company should seek ways that can help it to capitalize on the international market. VI. Alternatives and Recommendations A. Alternatives-Pros and Cons a. Growth strategy Growth strategy includes horizontal growth strategy through concentric diversification, joint ventures, and strategic alliance. This can be done through target new market segments by developing products and services for other demographics for example, females and younger bikers in various cultures internationally (Harley-Davidson Inc. HOG). Pros of the growth strategy Identifying new markets will help to expand the customer base, increase brand loyalty, and increase the profit margins (Wheelen & Hunger, 2006). Cons of the growth strategy New market segments may not be able to afford the products and services offered, or appreciate them as the old market segments. Also strategic alliances and joint ventures may lead to loss of control over operations, conflicts, higher risks, and dilute the identity of the firm (Kotler, 1997). b. Stability Strategy Stability strategy is especially helpful in periods of unpredicted business environment volatility such as the global economic recession (Ryan & Wheelen, 2008). It is necessary for the organization to reflect and analyze on the effects of recession on the company and react accordingly. Pros of the stability strategy It is easier to acknowledge areas that are weak and require improvement with this strategy. This is better than the profit strategy which often masks issues which escalate when least expected (Kotler, 1997). Cons of the stability strategy c. It does not resolve the intensified competition from competitors that are larger, more established, and more diversified (Kotler, 1997). Retrenchment Strategy This involves turnaround activities, liquidating unprofitable foreign plants and consolidating operations (Wheelen & Hunger, 2006). Pros of retrenchment strategy Allows for focus on business segments and plants that are profitable and prevents further losses (Wheelen & Hunger, 2006). Cons of Retrenchment Strategy The strategy limits growth (Wheelen & Hunger, 2006). B. Recommended Strategy (Growth strategy) The recommend alternative is growth strategy which emphasizes on growth for Harley-Davidson. Even though the majority of customers consist of baby-boomers that are fading, a market of young bikers is coming up because of lifestyle changes in the current era (Mitchel, 1997). Harley-Davidson should capitalize into such newer markets that are emerging, and can benefit from recruiting these younger customers to build lifetime customer loyalty with them and passed to later generations. The number of women riders is also rising throughout the world and this is another segment that Harley-Davidson can tap into (Harley-Davidson Inc, HOG). Strategic alliances, concentric diversifications and joint ventures may also enable entry into foreign markets, for example, China, where entry can be a little bit challenging. Knowledge of local conditions, costs sharing, and sharing of resources and assets can help reduce cost of production (Kotler, 1997). VII. Implementation Implementation of the above strategy involves the investment of time and steadfastness so as to operate successfully in the new markets especially, Asian countries where potential of growth is very high (MILWAUKEE, 2012). The company can also establish country-based leadership teams that have resolved to undertake discreet cultural decisions including the demographic and socio-cultural factors worth targeting (Wagner, 2003). The company should also involve more with governments abroad through Office of Trade of the U.S. It should also take part extensively in activities involving the World Trade Organization. VIII. Evaluation and Control The company can use its HOG marketing strategy as the primary promotional tool and use ads and commercials that target women and young bikers, for example, by using female images. The solid evaluation is via Harley-Davidson’s creed which states that Harley-Davidson is the dealer of life-line products to its customers, offering a wide array of products, dealer-knowledge, service, and information to users out there on the road (Harley-Davidson Inc). References Chapman, A. (2006). SWOT analysis method and examples, with free SWOT template. Global Data. (2012). Harley-Davidson, Inc: Financial and strategic analysis review. Retrieved on May 25, 2013 from http://callisto.ggsrv.com/imgsrv/Fetch?banner=4d609cd7&digest=27b6b6d33026b58 ef227e0025dda7d42&contentSet=SWOT&recordID=47405_GDAUT29887FSA Harley-Davidson Inc. Company Overview. Retrieved on May 25, 2013 from http://investor.harley- davidson.com/phoenix.zhtml?c=87981&p=irol-homeprofile Harley-Davidson Inc. HOG: New York: Bloomberg Business Week. Retrieved May 25, 2013 from http://investing.businessweek.com/research/stocks/people/board.asp?ticker=HOG Hutchison, K. (2006, October 2). "2007 Buell XBRR first ride". MotorcycleUSA.com. Kotler, P. (1997). Marketing Management. New York: Prentice-Hall, Inc. 1997. MILWAUKEE. (2012, August 20). Harley-Davidson welcomes thousands for annual dealer meeting. Reuters Press Release, Retrieved May 26, 2013, from http://www.reuters.com/article/2012/08/20/idUS146846+20-Aug- 2012+PRN20120820 Mitchel, D. (1997). Harley-Davidson Chronicle: An American Original. Wisconsin: Publications International Limited Porter, M.E. (2008) “The five competitive forces that shape strategy” Harvard business Review. Ryan, P. & Wheelen, T. (2008). Harley Davidson Inc. Case 16 The Harley-Davidson Foundation. Retrieved on May 26, 2013 from http://www.harley- davidson.com/en_US/Content/Pages/Foundation/foundation.html Wagner, H. (2003). At the creation: Myth, reality, and the origin of the Harley-Davidson Motorcycle, 1901–1909. Wisconsin: Wisconsin Historical Society Press Wheelen, T.L & Hunger, J.D. (2006). Strategic management and business policy. New Jersey: Pearson Prentice Hall. Read More