Executive Summary of Harley Davidson, Inc.
Harley Davidson's(HD) current strategy is to continuously improve their managerial and production processes in order to keep costs low, efficiencies high and create quality for their consumers. HD's two largest products are motorcycles and recreational vehicles.
In 1982 HD had a loss in net income of more than $20 million. However, in the years 1987-1989 HD's net income has been a positive $21 million, $24 million, and $33 million respectively. The increases in cash flow allow the company to have the funds to plan for any future investments or pay off debts. The latter was done in 1989 when the company decreased their debt/equity ratio from 55% to 40% by repurchasing over $37 million of debt.
Some of the strengths that have enabled HD to achieve certain levels of financial success are good senior management and brand loyalty. Some of management's accomplishments include the implementation of JIT and MAN systems.
These systems have resulted in such things as reducing inventory by 67% and decreasing defects per unit by 70%. HD's brand loyalty is an additional asset. While HD has always been a popular American brand name, in the past it was always associated with the rougher segment of American consumers. However, in the last decade HD has begun to make huge inroads with the more affluent members of society such as bankers, doctors, and engineers. In doing so they are now able to supplement their motorcycle sales with products ranging from clothing to household goods all stamped with the HD logo.
As far as internal weaknesses, Holiday Rambler is number one. Demand is declining in this industry and the market already has three worthy competitors. This company was acquired to diversify the risk of seasonal motorcycle sales. However, both RV's and motorcycles are dependent...