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MACRO – Socio-Cultural. Europe The population growth in Europe has been increasing since 1999 through 2002. MACRO – Socio-Cultural. The market for motorcycles or two-wheeled vehicles has stabilized just under 25,000 after a spike in 1997. MACRO – Socio-Cultural.

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MACRO – Socio-Cultural

  • Europe

    • The population growth in Europe has been increasing since 1999 through 2002

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MACRO – Socio-Cultural

  • The market for motorcycles or two-wheeled vehicles has stabilized just under 25,000 after a spike in 1997.

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MACRO – Socio-Cultural

  • Registration of vehicles increased for passenger vehicles, but a decrease for two wheelers.

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MACRO – Socio-Cultural

  • Japan

    • The population has been steadily increasing for the past 10 years, along with the density and also the mean age of the population.

    • Currently the mean age of the population is 41.43 years

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MACRO – Socio-Cultural

  • The population aged 20-24 has been steadily decreasing since 1996

  • The population aged 35-39 has been steadily increasing since 1997

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MACRO – Socio-Cultural

  • High population density in Japan of 349.62 people per square km

  • A huge surge of car ownership of 64% in just over twenty years

  • Japan has an extremely strained road network.

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MACRO – Socio-Cultural

  • United States

    • There was significant population growth in the warmer climate states such as California, Florida, Texas and Nevada.

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MACRO – Socio-Cultural

  • Currently there are 5.5 million motorcycle owners in the U.S. but only 3.9 million are registered

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MACRO – Political-Legal

  • Europe

    • Transportation regulations are set out by governments and agencies of the individual countries within the European Union

    • Legislation has been set forth to control emissions and braking systems.

    • Other laws regulate the use of motorcycles such as licensing, safety regulations, and equipment requirements.

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MACRO – Political / Legal

  • Japan

    • There is currently a new proposal for emission standards for Japan

    • The legal minimum age to drive a lightweight is 16 and 18 for heavyweights

    • Japan has responded to many American requests regarding laws for motorcycles and motorcycle riders.

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MACRO – Political/Legal

  • United States

    • All 50 states require motorcycle riders to obtain a special license to operate a motorcycle

    • Currently under the Motorcycle Helmet Act, states have different stipulations regarding mandatory use of helmets

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Industry Overview

  • The primary NAICS code is 336991

    • Motorcycle & arts Manufacturing.

  • The annual industry sales were reportedly worth $19.2 Billion in 2003

    • 12.7% increase from 2002 revenue totals.

  • The annual growth rate of the motorcycle industry over the span of three years is 4.11%.

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Industry Overview

  • The 2003 industry return rates are above average when compared to other industries and are listed as follows:

    • Return on Assets (ROA) is 10.2%,

    • Return on Equity (ROE) is 22.7%

    • Return on Investment (ROI) is 37.9%.

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Industry Overview

  • There are 17,151 people employed in the U.S. motorcycle industry alone.

  • Currently under the NAICS code 336991 there are 22 firms that operate solely in the motorcycle and parts manufacturing industry.

  • Some examples include BMW, Suzuki, Honda and Polaris Industries.

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INDUSTRY – Strategic Group Map







Rough & Tough

Perceived Image




Quality of Product

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Value Chain Analysis

Corporate HQ/ Executive

3 Year sales increase

  • 28 % U.S,15 % Europe, 17% Japan.

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Corporate HQ/ Executive

  • The return ratio’s are significantly higher than the competition’s

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Market Capitalization

  • The market is confident that Harley-Davidson is going to remain a long term market leader.

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Corporate StrategyVertical Integration

  • Harley-Davidson is a mid-stream company with its main focus on manufacturing motorcycles.

  • It would not be beneficial for Harley-Davidson to backwards integrate.

  • It would not be beneficial for Harley-Davidson to forward integrate

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Vertical Integration

Potential Problems and Recommendations

  • The dealer/Supplier relationships is the foundation of its successful supply chain management

  • Harley-Davidson should continue to build positive relationships to retain the competitive advantage

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Corporate Strategy Horizontal Diversification

  • Harley-Davidson is not horizontally diversified

  • Harley only has one NAICS code 336991

  • The industry of manufacturing motorcycles, bicycles and parts.

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Horizontal Diversification

  • Harley-Davidson products and services include:

    • Harley Gear –clothing

    • Harley accessories

    • Harley-Davidson Financial Services

  • The merchandise and financial services act as catalysts to the sale of Harley-Davidson motorcycles and to the image of the Harley way of life.

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Horizontal Diversification

  • Potential Problems and Recommendations

    • Harley-Davidson is dominating the motorcycle manufacturing industry.

    • Harley-Davidson has such a loyal customer base, strong brand name and image

    • it would be detrimental if they diversify into markets unrelated to motorcycles.

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Corporate StrategyGeographic Diversification

  • Harley-Davidson currently operates in three main global regions:

    • North America,

    • Europe

    • Asia.

  • Harley-Davidson operates under a global strategy

  • It offers standardized products across global markets

  • Competitive strategy is centralized

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Geographic Diversification

  • International revenue accounted for approximately 18%, of net revenue

  • Harley-Davidson 2003 Market Share

    • 50% United States

    • 8% Europe

    • 26% Asia

  • Harley-Davidson outpaced the industry in sales in each region in 2003

  • It is recommended that Harley-Davidson remains in the European, Japanese markets

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Geographic Diversification

Potential Problems and Recommendations

  • The company has expressed interest in other markets

    • South America, Africa and Southeast Asia.

  • Recommend that Harley-Davidson enters the Chinese market through a strategic alliance with Zongshen Motorcycle Group.

  • Not recommended entry into South American or African markets at this time