Harley Davidson Inc The History and General Situation
Harley-Davidson, Inc.: History and General Situation
Arthur’s brothers, William Harley and Walter, started Harley-Davidson Motor Company in 1903. They first started the business in the Davidson family’s backyard in Milwaukee, Wisconsin. In 1904, the company then moved into an office. The company was acquired by AMF Inc, which favored short-term profits instead of investing in research and development and retooling. Harley focused solely on sales, while competitors were continuously improving the quality of their motorcycles. This resulted in a downturn of the company with weak profits. In 1981, a new management team joins to buyout the company.
Harley-Davidson Inc. acquired the Buell Motorcycle Company during 1993. This investment offers Harley-Davidson the possibility of gradual entry into the sport and performance motorcycles market.
In 1995, the company acquired Eaglemark. As a financial service company, Eaglemark provides financial services to leisure product manufacturers and their dealers and customers in the United States and Canada. At the same time, Eaglemark provides motorcycle floor planning to participate North American dealers of the Motor Company because it is a majority-owned subsidiary. They also offer retail-financing to the Motor Company’s domestic customers, and provide insurance for motorcycles as well as service contracts extensions. Eaglemark works complementary for the Motor Company.
Harley-Davidson Inc. operates in two business segments: Motorcycles and Related Products and Financial Services. These two segments offer different products and services, and they are managed separately. However, the financial service works as a complementary for the Motor Company.
Industry Essentials
The motorcycle industry is a consolidated industry. The U.S. and international heavyweight motorcycle markets are highly competitive. The major players, such as Yamaha, Suzuki, and Honda, generally have financial and marketing resources that are substantially greater than the non-major players. Competitions in the heavyweight motorcycle market are based on several factors; price, quality, reliability, styling, product features, customer preference, and warranties.
Harley’s first segment is the motorcycle and related products business. It included designing, manufacturing, and selling primarily heavyweight touring and custom motorcycles and offering a broad range of related products that included motorcycle parts and accessories and riding apparel. The custom products charge a higher price because of its features, styling, and high resale value. Their target market is mainly in US. By the end of 1997, they have an approximate 48.3% share in the US market, 6.1% share in European, and 16.5% share in Asia/Pacific. ...