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Harley-Davidson

After the World War II, America, Germany, Spain and France had a great increased necessity for motor cycles. Veterans who were involved in the war started to purchase their personal motorcycles after resuming civilian's lives. Groups and allies were formed where motorcycle races and rallies were initiated. In 2003, over 950,000 motorcycles had already been sold in America, while more than twenty-eight million? operated internationally. Motorcycle industry was growing rapidly and was expected to rise by five percent by 2007. India, China and Asia had a positive growth which raised the international demand for motor cycles. Demand for larger motorcycles increased year after year. In 2002, there was a noticeable demand in heavy weight motorcycles internationally. The United States recorded seventeen percent growth, while the entire industry recorded ten percent.

The motorcycle industry is divided into various categories depending on vehicle style and engine size. Scooters, mopeds and other small motorcycles had small engines. They were mostly used in urban areas as packaging, and streets are limited. Similarly, developing countries used these motorbikes as their capital was limited. Heavy weight motorcycles in the 651+cc category were subdivided into four groups. Standard motorcycles in this category had fewer accessories as compared to other categories. They were mainly used for cheap transportation. Performance motorcycles were designed for rapid acceleration and responsive handling. Custom motorcycles had classic accessories for personal luxury. Choppers had the best imagination with high handle bars (Detroit Free Press August 28, 2003).

In motorcycle industry, rivalry was based on reputation, price, after-sale-services, image, product line and performance. Reputation, styling and performance were generally good. The main difference occurred in price, quality services and varieties offered. Most cyclists value after-sale-services, workmanship and spare parts. Japan defeated America and Europe in this industry as far as prices were concerned. In fact, their retail prices were incomparable with Europe and American made motorcycles. Japanese manufacturers produced the cheapest high-quality motorcycles internationally. Therefore, they achieved exceptional reputation and performance from cyclists.

Harley-Davidson emerged in 1981. The company was bought from AMF. It started with thirteen managers who agreed to buy it and started working immediately. Initially, the management focused on maintaining employees, but they later dropped the idea for better results. The original company was making the loss with its market share falling below three percent in America. This was caused by unreliable products, poor performance and higher prices compared to Japanese (B.B.C., August 14, 2000).

Managers of the new motorcycles decided to conduct a field study. They noticed that customers hated to be associated with the original company. They were claiming that they were cheated, and the company did not care for the customers. The managers had to portray a new image to gain customers trust back. They started attending each and every function which cyclists organized. They mixed with them and sold their new ideas which were to be implemented soon. They promised to make quality products and offer after-sale services to all customers. They also built a showroom which had attractive clothes like boots, jackets, T-shirts as well as new high-quality motorcycles. Customers were allowed to widow-shop and purchase products at their pleasure. The company moved a new step ahead when they started making clothes, accessories and other important elements related to motorcycles.

When Harley-Davidson resolved a product problem, the company started new strategies to gain reputation. The first step was to form Harley Owners Group in every dealer. This meant that in every city, HWO was formed to make all stakeholders feel as real part and parcel of the company. Customers and cyclists become members of Harley-Davidson's community. The management believed that this step would bring more buyers, thereby increasing profit. Every buyer was rewarded with free membership to HWO. The group conducted races, charities and important discussions which attracted more members. It started with thirty-three thousand members, and within a few months, the number had grown to seventy-nine thousand members (Harley-Davidson Inc. 2003).

Suzuki, Kawasaki, Yamaha and Honda are the main competitors in America. Considering the impressive growth rate of Harley-Davidson Company, these competitors were threatened. They all introduced close replicas to what Harley was producing. Some Japanese producers copied the company signature in their effort to copy the engine. Their efforts bore no fruits since Harley-Davidson had gained the unlimited reputation. They tried to lower their prices by fifty percent, but it did not make a difference. Harley-Davidson co-developed with Buell and later purchased it. This was done to appeal to American young stars who did not like the traditional Hells Angels and Easy Rider. The management believed that Buell would make it more reputable in Europe (Global News Wire August 27, 2003).

In 2003, more than six hundred and forty-four dealers were selling Harley-Davidson motorcycles in America. Additionally, over three hundred and forty-six of these dealers were also selling Buell motorcycles. The company was also selling merchandise and apparel in more than fifty retail shops in America. There were seventy-six independent dealers in Canada, one hundred and sixty-one in Japan, fifty-three in Australia and seven in Asia. The distribution division based in the UK served Africa, Middle East and Europe.

The company aimed at raising production units to four hundred thousand units by the year 2007. However, this goal was not achieved. Market analysts advised that the company was approaching its apex since the original baby boomer group was aging. Therefore, very few customers will be interested in riding as their ages do not allow them. This affected the company adversely and the sales reduced. The young generation was not interested in the old fashioned motorcycles, which attracted their old parents who could ride no more. Additionally, the Easy Ride was about attractive, but its price kept young people away. Buell motorcycles cannot make it with their poor performance, and this affected the entire company (Harley-Davidson Inc. 2003).

In conclusion, Harley-Davidson has done well in the motorcycle industry. This is an attractive industry, especially with the growing demand for motorcycles in developing countries. The company has applied successful strategies in the past and has emerged as winners. Therefore, shareholders can invest in this company considering their attractive past. The company requires making modern motorcycles which will fit in the modern generation. It should increase distributors in all parts of the world for better services.