Case Study - Harley Davidson - Group 3 - 15122022.pptx

Case Studies about Harley Davidson

1. Case Analysis 3: Harley Davidson, Inc. in 2018 Sustainable Business Strategy (LEB8) BERNIE SOEBEKTI (2301977611) LUSYANA WIJAYA (2301976716) MICHAEL VALENSIUS MANEK (2301977504) TOMMY WIJAYA SUTANTO (2301978980) GROUP 3

2. C o n t e n t Theory Background/ Synopsis to the Case Study Main Issues Tools & Analysis Recommendation & Action Plan Conclusion Attachment

3. THEORY Sustainability A Filter for Selecting Development Paths A Compass in a Tornado A Strategic Ambition The Importance of Corporate Ambition & Culture for Sustainability The Importance of Customers The Principle of Market Focalization Nurturing Customer’s Loyalty Treasuring Selected Customers: The Secret for Sustainability

4. Background/ Synopsis to the Case Study Harley Davidson is the world's largest motorcycle manufacturing company, with a valuation of US$4.7 billion. In 2018, they will celebrate their 115 th anniversary and to celebrate they are holding an event involving 10 thousand Harley riders. Harley-Davidson experienced a financial crisis in 2008-2009 but was able to recover from its losses in 2014. In 2018, they experienced difficulties again due to trade wars and government regulations that increased import taxes by 25% which affected companies in procuring vehicle parts. The company continues to innovate and make improvements from 2008 until now, even with a different CEO.

5. Company History 1903 1917 1920 1965 1969 1981 1987 William Harley, Walter and Arthur Davidson created the first Harley Davidson Harley Davidson Supplied around 15.000 motorcycles to US military for World War I Emerged as the largest motorcycle manufacturer in the world The company filed for IPO and 53% stake was controlled by the owners Harley was acquired by AMF The company was bought by its management for $81,5 milion through leveraged buyout It was listed in the NYSE after going public in 1986 2008 Harley Davidson got crisis, but in 2009 their leadership chair was taken over by Keith Wandell with 3 main programs namely: Restructuring manufacturing operations; Expanding international sales; & Expanding the customer base. 2014 Harley Davidson made a good recovery from crisis, then in 2015, there was a change in CEO, Matt Levatich replaced Keith Wandell . 2018 Harley Davidson is again experiencing a period of crisis due to trade wars and government regulations that increase taxes on imported goods. This directly affects the procurement of Harley Davidson spare parts. 2020 Jochen Zeitz appointed President and CEO of Harley-Davidson

6. Main Issues Harley Davidson has production for 3 segments which are its competitiveness : Cruiser motorcycles: Is a cruiser motorcycle that has the advantage of riding low speed, long, and comfortable. It also works great for long distance touring, commuting and road riding. Touring motorcycles: Touring motorcycles generally feature large-capacity fairings and windshields that offer high levels of weather and wind protection, large-capacity fuel tanks for long distances between fills, an engine with lots of low-end horsepower, and a more relaxed, upright seating position than bicycles. sport. Performance motorcycles: Performance The motorcycle has an aggressive riding position with a low handlebar position. They have stable rear control, high performance, and are light (under 500 lbs/226.8 Kg). They have plastic bodies, 551cc and up, for road use only. Harley Davidson is the market winner for this segment, but the competitors coming from Japan are the main problem to deal with all the time. A. The Heavyweight Motorcycle Market Competition

7. B. Financial Crisis of 2008-2009 This problem occurs because the mortgage industry provides funds to borrowers who cannot actually pay. This resulted in an increase in bankruptcies which triggered the collapse of a number of lending institutions. Harley announced it was addressing the issues it faced with 3 namely investing in its brand, cutting costs, and obtaining funds to cover the annual costs of the finance division's approximately US$1 billion. The first two led to a variety of steps from closing factories to merging operations to laying off around 1,100 employees or 12 percent of its workforce. However, the crippled credit market made it difficult for the company to meet the third part of the plan. The company finally decided to borrow funds from its largest shareholder, Davis Selected Advisers, and Buffett's company, Berkshire Hathaway. Main Issues

8. C. Raw Material And Financial Crisis in 2018 The intercontinental trade war involving America and raw material supplier countries such as China has at least harmed companies in America itself. An example is Harley Davidson, which strongly objected to a government regulation that increased import taxes to 25% more expensive and caused the company to suffer financial losses due to being unable to carry out production. Main Issues

9. Tools & Analysis 1. A Compass in Tornado Whenever the Harley Davidson company is experiencing a crisis, they always find a way out of the crisis and continue developing their product. One way is to work with third parties who can help them out of the crisis, such as contacting Warren Buffet, the very rich conglomerate in America until now. In this case, they meant relying on a network of powerful people outside their company. A. The Importance of Corporate Ambition & Culture for Sustainability A Filter for Selecting Development Paths Apart from working with external parties to help solve their internal problems, Harley Davidson also continues to improve the company's performance during a crisis. This is evident from those who replaced the company's CEO with a new person who was considered to have good ability to overcome the crisis, namely Keith Wandell with 3 main strategies starting from improving production performance, expanding international markets and expanding the customer base. A Strategic Ambition Harley Davidson's strategic ambition is to pursue long-term profitable growth through focused efforts that expand and strengthen their brand, and drive value for all stakeholders. In this case, Harley Davidson started by raising its brand name through various community activities, with the other goal being to introduce itself to more people and potential customers. In addition, they also pay attention to the needs of their customers, for example regarding Harley Davidson accessories and procurement of 500 cc and 700 cc motorcycles.

10. Tools & Analysis

11. B. Treasuring Selected Customers: The Secret for Sustainability Nurturing Customer’s Loyalty To maintain customer comfort, Harley Davidson provides a good and interesting experience for its customers. For example, by making Harley Davidson motorbikes that can be personalized, or changed according to the wishes of its customers. 2. The Importance of Customers Harley Davidson realizes that customers are important people who must be served very well and wholeheartedly. For example, namely by presenting the best output products specifically for those who are in various countries. The hope is that customers will become good role models for others who still don't know Harley Davidson. 3. The Principle of Market Focalization The Harley Davidson company focuses on the target market in order to maximize their profits. In addition, they also have a consumer orientation, integrated local and international marketing, and take advantage of situations to gain profit. For example, by holding a group tour with tens of thousands of riders with the intention of testing and providing actual information regarding the performance of the Harley Davidson motorcycle itself. Tools & Analysis

12. Recommendation & Action Plan As proclaimed by Matt Levatich, Harley Davidson has a 10 year oriented plan to build a new generation of Harley Davidson globally with the following steps: 1. Building 2 million Harley Davidson bikers in America 2. Building international business with 50% annual volume (1 million Harley Davidson/annum) 3. Deliver superior returns on invested capital for HDMC 4. Build an environmentally friendly business. A. Stick To The HD Master Plan See Figure 1. about the 10 year plan of Harley Davidson launched by Matt Levatich.

13. Recommendation & Action Plan B. Customer Oriented Uniqueness is one of the things Harley Davidson has to offer its customers. If customers request special modifications to the motorbike parts they ordered, Harley Davidson's job is to fulfill their requests, without reducing the quality of the engine or its performance. Various consumers around the world are so fond of the Harley Davidson brand that they want to buy it. Many of the riders or non-riders also like Harley Davidson products besides the motorbikes they create, namely accessories, vehicle parts, general merchandise, and satisfying financial services. Therefore, it is very important for the Harley company to continue to improve the quality of their services. ( See: Figure 2. Harley-Davidson's Nonmotorcycle Sales)

14. Recommendation & Action Plan C. Start Developing HD Model Electric Motorcycles The world is currently experiencing an energy crisis, various needs for motorized vehicles such as fuel supplies are increasingly expensive and not environmentally friendly. Therefore, Harley Davidson should really consider creating electric motorbikes with their appearance or characteristics, namely; has a large body, handsome, strong, stable performance, and can be relied upon in various fields of travel. This project sounds very ambitious, but this project is believed to be able to penetrate the international market which has now begun to consider the use of electric motors. From the perspective of the consumer himself, electricity is one of the fuels that is easy to obtain but also has a lower cost in the long run.

15. Conclusion Based on the discussion that has been done, it can be seen that a company that is sustainable is a company that can always survive and get out of the crisis it is facing. If a crisis occurs, companies must be able to open themselves up with other parties who might be able to help them get out of the crisis without exacerbating the situation. In addition, companies must also be able to provide the best for their customers in order to get good feedback from them as well. With this feedback, the company will later gain a big name and influence in the local and international markets.

16. Attachments Figure 1. Harley-Davidson's 10-year strategy

17. Figure 2. Harley-Davidson's Nonmotorcycle Sales Attachments

18. Thank You