Harley-Davidson's Business Transformation

This assignment analyzes Harley-Davidson's successful business transformation in the 1980s. It explores their strategies using tools like SWOT, PESTLE, and Porter's Five Forces to overcome challenges from Japanese competition and financial difficulties. The company's focus on improved production methods, new models, employee relationships, and benchmarking led to their resurgence.

Running Head: MANAGEMENT DECISION MAKING 1
Management Decision Making
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Management Decision Making 2
Introduction
Harley-Davidson Company is a firm that deals with the production of motorcycles, spare
parts, and sale of riding costumes as well as licensing the use of its name and trademark by other
companies such as those manufacturing clothes which include L’Oreal’s line of Harley-Davidson
cologne.
Transformation
Harley’s change came to effect after a drop in its market for the motorcycles. This was
brought about by competition from the Japanese companies as well as accumulated debts which
were included in the company’s balance sheet. However, in the 1980s, the company was reborn
and became successful due to; cutting down stock and costs hence enhancing quality control.
There were improved production methods and co-operation between workers and the
management. Additionally, investment in new models and machinery led to a broader market for
its motorcycles. Harley’s managers conducted a benchmarking to several Japanese car plants on
the Just-In-Time system, whereby they later converted their operations to JIt. They came up with
a production-scheduling program known as Materials-As-Needed.
Tools and Techniques
SWOT analysis explores a company’s strengths, weaknesses, opportunities, and threats.
Harley’s weakness was that he lagged behind when it came to improving his technology.
However, the company too had some strengths that did outdo his competitors, he ventured in
new products and came up with new models, attractive painting designs, and improving his
engineering techniques. Harley identified opportunities such as selling spare parts and riding

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costumes for both genders (Brannen, Miller, & Ibrahim, 2012). He also licensed the use of his
name and trademark to other companies who manufactured clothes, jewelry, and other products.
Nonetheless, Harley faced threats from his competitors such as Honda and BMW who
manufactured both motorcycles and cars, unlike him who manufactured motorcycles only.
PESTLE analysis considers factors affecting Harley which are Political, economic,
social, technological, legal, and environmental aspects. Harley took a long time to adopt new
technologies in the manufacture of motorcycles. He chooses the traditional designs thus his bikes
looked old-fashioned. In a social perspective, Harley built better employee-employer relationship
thus leading to job satisfaction and employee commitment. In an economic point of view, models
developed by Harley were expensive thus the customers opted for cheaper products from other
companies.
Porter’s analysis focuses mainly on the competitors. Harley faced competitive rivalry
from Honda and BMW who produced both cars and motorcycles making him loose some clients.
(Schoenberg, Collier, & Bowman, 2013). To improve his supplying power, Harley improved his
distribution network and incorporated pre- and after-sales services to his clients, which he
believed would increase demand for the motorcycles.
Harley Principle Resources and Capabilities
Principle resources determine the capacity of a firm. First, financial resources; Harley had
his sales largely financed by loans from its financial services which was later retained on its
balance sheet. Second, physical; the firm worked hard in improving its equipment painting
designs and sale of spare parts. Thirdly, technology; Harley had less know-how of technology

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whereby he developed old-styled motorcycles. Fourthly, reputation; the firm’s primary
customers were aging and bought new bikes less often. Lastly, human resources; the
management buyout in Harley enhanced employee relationship, and workers became more
committed.
Recommendations
Harley was left behind in adopting the new technology. He would have been in a position
to cope with the rising competition if he adopted new technology. Secondly, he would come up
with other substitutes of motorcycles as his competitors had done, allowing him to maintain his
customers who would have opted for alternatives from the firm. Thirdly, he would have
regulated the prices of his products to compete with those of his competitors.
Conclusion
Analyzing the firm’s strengths, weaknesses, opportunities, and threats are essential in
determining the areas to be improved for it to be successful and achieve its required goals. A
PESTLE analysis is necessary to identify all the external factors that would influence the
performance of Harley. All these factors are major for the achievement of the goals of a firm and
should not be assumed.

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References
Brannen, D. E., Miller, J. R., & Ibrahim, N. A. (2012). HARLEY-DAVIDSON, INC.
Schoenberg, R., Collier, N., & Bowman, C. (2013). Strategies for business turnaround and
recovery: a review and synthesis. European Business Review, 25(3), 243-262.