Harley Davidson Business Case Study

Introduction Harley Davidson is an American company that has been around for more than a century. In order for a company to survive so long, it must overcome many obstacles, whether foreseeable or not. Globally, the company faced new qualification for international trade and tariffs, and the way that social media was a growing factored into the operations of business. However, Harley Davidson CEO Matthew Levatich was fairly new to his role and thus able to bring new insight and ideas to the company. Domestically, Harley Davidson has faced mounting new competition and, it was forced to focus on expanding the target market. Ethics affect business through operations as well as helping maintain order across the board. Market Summery Harley Davidson is trade on the New York Stock Exchange. This is an American iconic company that has been untouchable for many years. Since Harley Davidson has been around for more than a century they have a competitive advantage over other companies. Harley Davidson is known for high quality products at a reasonable price. Loyal customers know that this company well-known for the motto “Plan our work, and work our plan” () meaning whatever happens there is always a plan to flourish ahead. For example, in 2016, net income was down by eight percent and gross margin by 1.7 points. However, Levatich ensure customer than the company will thrive once again. For instance, they increased dividends by 13% along with opened 40 new international dealerships to increase sales and awareness. Harley Davidson is always analyzing statistic to know what customer enjoy. Currently the Financial status of this company is on an upward trend. Over the last year the stock has fluctuated around 31 to 47. In 2018 the stock shifted up and down many times. In beginning of October that Harley Davidson stock took the largest drop of the year. It was not until 2019 that the growth rate of stock price started to level out. Opportunities and Challenges Harley Davidson Harley Davidson is a company that has faced many challenges throughout its existence. However, it has also achieved many accomplishments. One trial the company faced was in 2016, when President Trump pulled out of the Trans-Pacific Partnership (TPP). This was a major issue for the company because leaving the TPP would result in a rise in tariffs on many metals important to the production of Harley Davidson commodities (https://www.csis.org/analysis/goodbye-harley-davidson-and-wto). A rise in tariff would cause decrease in sales. Also, when the U.S. pulled out of the partnership, many new trade barriers were put into effect. When domestic companies started to see Harley Davidson struggle internationally, they perceived an opportunity to make inroads on the U.S. motorcycle market. For example, one company that tried to capitalize on the opportunity was Polaris Industries, which sold motorcycles “under its Indian brand” (Case Study). Polaris Industries mainly focused on off-road vehicles, whereas Harley Davidson’s focus on street motorcycles has largely prevented Polaris from ever being able to completely take over the domestic American market. Ultimately, realizing social media is an important and growing tool, Harley Davidson began rethinking its strategic marketing. Business and people almost instantly engage with whatever is posted to social media, and this influences what people and potential consumers will think and feel. Not only this, but the Harley Davidson company realized President Donald J. Trump’s twitter account posed a challenge. CEO Levatich knew that, relative to the President’s tweets, he would need to “carefully assess the implications of any international expansion plans” (Case Study). One question Levatich faced was, “Could an announcement that Harley-Davidson was building a new plant overseas in an attempt to avoid high tariffs cost him his job” (Case Study). If the world were to know that the company was planning to move overseas sales, stock prices might rapidly decrease. Furthermore, historically, Harley Davidson is seen as an American iconic company. So, when people see the company as all-American, they want jobs associated with the manufacture of their Harley Davidson products to be performed by hard-working Americans. When a new company undergoes new leadership, it faces an uncertain future: either it will thrive or decline. In the Harley Davidson case in question, it is plain to see the company thrived. Moreover, new leadership was specifically one opportunity the company capitalized on in order to ensure a thriving future. The expansion into new foreign and domestic markets was yet another opportunity the company navigated well and benefitted from. Finally, a fresh perspective and engagement with social media helped in improving the overall quality of the company and its products. One objective that Harley Davidson accomplished was establishing a wider customer base. This is a critically important factor in the company’s success because, for many years leading up to 2009, “the company’s traditional customer base was white males, 45 years old” (case study). When a company is still thriving on the same customer base for long periods of time, if they do not expand their brand, they risk eventually becoming obsolete or unknown. For example, Harley Davidson’s main demographic was individuals born in the “Baby Boom era,” and this era of people has steadily declined over time. By expanding their target market, the company capitalizes on new opportunities to reach younger generations, as well as women. Harley Davidson began its wider expansion into international markets only recently. In 2016, the rate of sales was higher in the international market for the first time in the company’s history. “This trend was clearly confirmed between 2006 and 2016 in terms of domestic motorcycle shipments decreasing from 273,212 to 170,688, whereas international motorcycle shipments increased from 75,984 to 95,694 for the same period” (Case Study). In 2016, Canada and EMEA had the largest change in retail sales for the company. Ethics and Political Pressure Foreign policy is set in place in order to determine guidelines between countries. Without foreign policy, there would be no diplomats for negotiation. Negotiating policy helps imports and exports to run smoothly and benefit many parties. Political pressure on business has existed for centuries. In my opinion, businesses that agree with the policies put into place by Congress tend to thrive more during the years in which that policy takes effect. I believe that it is ethical for a country to want business to align with the current political state of affairs. If every business was able to run however it felt with no regulatory guidelines to follow, markets could not function properly, and the country would have no order. Recommendations If I was consulting for this company I would say yes move production overseas. There are a few reasons for this one being it will save money. In order to continue growing sales I would say the company should keep pushing for a more diverse client base. Harley Davidson should increase sales to women as well as internationally to the younger generation. I believe that focusing on broadening the market to the younger generation is a big part of securing the company’s future. Another way that Harley Davidson can increase growth of sales is through material. Using high quality but low-price material to help lower production cost in order however maintaining a high profit number on sales. This will help when competition lowers their product cost Harley Davidson will continue to be able to have the flexibility to lower motorcycle cost if needed and still make a wide profit of each bike. One recommendation I have to help raise stock prices is introduce a new product. When a company introduces a new product, it draws investors to become interested in the company. Conclusion In conclusion, Harley Davidson is a world renown company. In 2017 the United States withdrew from the Trans-Pacific Partnership this caused Harley Davidson to obtain resources from new producers. When they faced international trade obstacles the domestic motorcycle company tried to take over the market. Which forced an expansion in Harley Davidson’s consumer markets. Another, challenge that the company faced was the growing use of social media and its effect on the world opinion. Moreover, the new leadership of Levatich lead to an expansion of customer base as well as international markets to increase sales. In my point of view, it is ethical for companies to guide business to fallow the political point of view, in order to keep order among business. Harley Davison is a well-known American association.