Harley-Davidson is a US-based company engaged in manufacturing motorbikes. Over the past years, the revenue for the company has declined and the company is finding it hard to remain committed to building its brand of manufacturing expensive bikes. This case study looks into the factors which influence the decline in sales of Harley-Davidson motorbikes.
Paul W. Farris and Eric A. Gregg
Harvard Business Review (UV3984-PDF-ENG)
July 21, 2004
Case questions answered:
- Current Situation
- Corporate Governance
- External Environment
- Internal Environment
- Analysis of Strategic Factors
- Strategic Alternative and Recommended Strategy
- Evaluation and Control
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Case answers for Harley-Davidson: Building a Brand Through Consumer Engagement
I. Describe the current situation of Harley-Davidson Inc.
Harley-Davidson is a motorbike firm in the United States. The company’s sales continue to struggle due to declining interest in motorbikes in the U.S. Consumer reports has been reporting weak sales for the company dating back from 2010. The bikes are expensive, and many people find them unaffordable.
The decline of motorbike sales is a sign that buyers want cheaper motorcycles. The new rider demographic of female, urban, and young riders want affordable bikes. However, Harley-Davidson remains committed to producing expensive motorcycles. The U.S market is characterized by intense competition.
The decline of sales can be attributed to the fact that its motorcycle’s riders are aging. Most of the company’s customers are baby boomers. Indeed, the core customer base of Harley-Davidson is baby boomers and the population is aging. That is a huge threat to the brand’s existence. Although in recent times the company has targeted the young generation, it seems that it has not employed the best strategies.
II. Corporate Governance at Harley-Davidson Inc.
Board of Directors
The board of directors consists of 9 leaders:
- Michael Cave
- John Anderson
- Donald James
- Mathews Levatich
- Sara Levinson
- Thomas Linebarger
- George Miles, Jr.
- James Norling
- Jochen Zeitz
The Board of Directors and leadership of Harley-Davidson believe that the organization, in the interest of its shareholders, must accept corporate governance practices. The policies of corporate governance of the organization should correspond to its business practice.
The Nominating and Corporate Governance Committee of the Board are authorized by its charter to continue reviewing corporate governance practices of the organization and create approvals to the Board to warranty its leadership. The Nominating and Corporate Governance Committee report its verdicts and adoptions to the Board for action.
To continue its management in the area of corporate governance, the corporation would uphold the following policies:
- Board independence: most of the board members comprise of autonomous directors. Such directors should satisfy the impartiality and other necessities of NYSE as well as pertinent rules and regulations.
- Committee Independence: the nominating and corporate governance committee, the human resource committee, and the audit and finance committee should consist of autonomous directors. All directors should satisfy the impartiality and other necessities of the NYSE and pertinent rules and regulations.
- Committee Structure: the board comprises of four committees; sustainability committee, audit, and finance committee, human resources committee, and nominating and corporate governance committee. The board is obliged to preserve a written charter for every team. The charter would state the responsibilities of each committee.
III. EXTERNAL ENVIRONMENT
A. Societal-Overall Socio-cultural Geo-Political-Legal
Society’s culture and way of doing things influence the culture of a company. Common attitudes and beliefs of the population play a significant role in how marketers at Harley-Davidson understand their clients. Harley-Davidson has relied on baby boomers to purchase its products.
However, the culture of depending on the aging population should change. The company should develop a culture that is adored by the younger generation. Checking social patterns would enable the company to reposition its administrations or items to meet the changing needs and desires of consumers. Cultural patterns have an impact on work trends and are directly related to consumer behaviors. Social models have a direct effect on buyer inclinations and tastes.
Political and legal factors can influence Harley-Davidson Inc. Political factors, such as…