Harley-Davidson’s supply in the United States Essay

This paper presents the analysis of the world known company Harley Davidson, including the history of its development, the company’s main achievement and successful business techniques and plans for future development.

Before considering in detail the history of the company, we are providing some general facts about the company. Harley Davidson this is a public company, which was founded in 1903. It is situated in Milwaukee, Wisconsin, USA; the main product of the company is motorcycles. The most important people for the company: James L. Ziemer, CEO, Thomas E. Bergmann, CFO

James A. McCaslin, Div. President & Div. COO, Donna F. Zarcone, Div. President & Div. COO.

There was another mass producer of motorcycles remained – Victory Motorcycles. The company is specialized on the heavy motorcycles, which were made for cruises and everybody knows about their distinctive noise. Usually the motorcycles of Harley Davidson were called simply Harleys. They design gave them advantages in comparison with other vehicles.

Harleys are considered to be the start for chopper – style of motorcycles. In the year 1998 Harley Davidson became the owner of Buell Motorcycle Company.

The motorcycle company managed to by successful and well known in the whole world thanks to the marketing ideas which are relevant and appropriate for practically any kind of business of any dimensions. “With an understanding of its customers, values, planning, courage and luck, Harley was able to capitalize on what most people thought were negative images and bring itself back from the edge of bankruptcy to become a true American icon” (John O’Dell, 15). Nowadays the vehicles from Harley Davidson are not only for outlaw motorcycle gangs, they are used by Wall Street brokers and families as well. The process of such kind of transformation was certainly not quick and not easy. There were times when these motorcycles were associated with American individualism and freedom, they owners were bad rebellious boys from America. The supervisor of the group of 200 manufactures in America was Harley. Afterwards the marking steps were taken and they brought serious changes for large and small companies that wanted to make great promotion of themselves without certain amounts on money necessary. Using the basic rules of radical marketing Harley Davidson managed to reinvent itself.

Concerning the planning for the future, company was called “forward- looking”. This is explained by the number of certain risks taken by the company, which could bring positive results but from the other side could cause some material problems. Company had a list of forward-looking statements, which was constantly adding new ones to the list, usually without public updating. To provide some examples of this list we could mention the following necessary elements for the company to be able to meet the goals and expectations:

–       good management of operating costs, like materials and labor

–       good management of production capacities and change of the products

–       good management of supply chains

–       ability to produce services and products that are needed and successful at the market

–       ability to invent and implement marketing plans in order to keep the existing and to attract new customers at the highly competitive market.

–       Strong and constant development of distributor and dealer networks

–       Ability to manage constantly changing environment of the market and so on.

In addition to all the mentioned issues there was always a chance of delays in the work of Company in cases of strikes, natural causes or other unexpected factors.

The purpose of the company was reflected in its missions, which is telling more about dreams than about motorcycles as the things people were concentrated upon. Thus, the mission is formulated in the following way: “We fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments.” (Gwyneth K. Shaw,115).

The promotion of the products for Harley Davidson means a combination of advertising and personal selling. For advertising they use about five commercials in television each year. The important point about these commercials is that they do not advertise the product but the company itself. Harley Davidson placed advertisement in such national magazines like

Road & Track, Popular Science, and Fortune. The company had about 595 dealers all over the United States and plus advertisement on radio and direct mail.

The main aim of mass media advertisements was to attract the attention of as many people as possible. This method is usually characterized by deep affectivity for reaching people. Such kind of advertisement is good for both for the existing customers and for those who would buy the product for the first time.

Promotional procedures of Harley Davidson were taking steps in order to make customers from ignorant viewers to aware buyers. The key point of their advertisements is that they don’t show the description of some specific models and do not compare them to other brands, they just provide the use of the product in some typical environment. Within many years the advertisement system of the company was so strong that thanks to the final results, nowadays there is practically no need in advertising the company, just informing the customers about the fact that the company still exists.

This was as short overview of Harley Davidson Company, of its products and ways of advertising and selling them, of its key concepts and results. Now we are going to concentrate more on some important details of historical development of the company from the very beginning.

The year of foundation of the company is considered to be 1903. But we could also mention the year 1901, when William Harley being 21 years old worked out some plans of small engine of 7.7 cubic meters with four-inch flywheels. This engine was supposed to be used for usual pedal bicycles. During the next two years Harley and his friend Arthur Davidson were working with their motor bicycles in the machine shop of another friend Henry Melk. At last it was finished in 1903. After checking it boys had to discover that their motorbike with such power-cycle was not able to run on the Milwaukee hills without help from pedals. After that Harley, his friend Arthur and his brother Walter considered this first motorbike as only a learning experiment. They started to work upon the new model for which they were going to consider all the weak points of their first model. The next motorcycle had an engine of 24.74 cubic meters with flywheels of 9-3/4 inch, the weight of it was 28 pounds. Ole Evinrude, who was motor pioneer, helped them.

Later appeared the new improved model that for the first time appeared in Milwaukee motorcycle race, this was the first time when Harley Davidson motorbike was shown to public.

At the beginning of the year 1905 small advertisements were to be found in “Automobile and Cycle Trade Journal”, telling about Harley-Davidson engines for do-it – yourself trade. In April of the same year a small party of motorcycles was launched in production. In shed of backyard in 1905 a dozen of motorbikes were produced. Later on this shed was taken to Juneau Avenue Factory, but it was accidentally destroyed in 1970 during cleaning of the factory yard.

Harley and Devidsons were able to build their first factory in 1906 on Chestnut Street. This was not big one story building, but in the same year it was the place of production of 50 motorcycles.

In 1907 William Harley got the mechanical engineering degree from the University of Wisconsin at Madison in 1907. In the same year the second floor and facing of yellow brick was added to the small factory. In this year they managed to produce about 150 motorcycles. The same year also was the start of the tradition, which is alive till nowadays – they sold motorbikes to police offices.

During the years 1905 and 1906 all the models were with single cylinders of 26.84 cubic inch. But in 1907 during the Chicago Automobile Show spectators could see the first 45 degree V – Twin engine. It was a good advertisement, however during the years 1907-1910 not many V-Twin models were produced in reality. These engines were of 53.68 cubic inches and provided twice more power for hill climbing in comparison with first single motors. The production developed from 450 to 1.149 motorbikes in 1908-1909. There appeared a great number of those who wanted to imitate Harley Davidson as their success was really growing. By the year 1911 about 150 producers of motorcycles appeared but the fact was that only half of them managed to survive in 1910s. In 1911 better model of V- Twin was developed, the size of it was smaller but the efficiency much better, as the result the models that appeared after 1913 were all with V Twin.

In the same 1913 new building with 5 stores was constructed. Although the competition was rather strong, Harley Davidson managed to be ahead of the competitors and the production of 1914 grew to 16.284 motorbikes.

When the World War 1 touched the United States in 1917, there was a huge demand for motorcycles. This was actually the first case when Harley Davidson motorcycles were used for military purposes. During the war period the factory provided about 20.000 machines for combat forces. The production went on developing and by the year 1920 Harley Davidson was the biggest producer of motorcycles in the world, with dealers in 67 countries and production of 28.189 pcs.

In 1921 Harley Davidson motorbike won the motorcycle racing with the speed of 160 km/hour.

In 1920s some changes were made like for example the new 74 cubic inch V-Twin and the gas tank.

During the years of Great Depression only two manufactures were able to survive and one of them was Harley Davidson. They still provided motorcycles for the Army of the USA during the Second World War their products were both appropriate for racers and private buyers. During the second World War Harley Davidson made a copy of BMW just converting metric measurements to inches and the results was shaft drive 750 cc 1942 Harley Davidson XA. They also borrowed some ideas of German motorcycles and created the “Hummer”.

“In 1952, following their application to the US Tariff Commission for a 40% tax on imported motorcycles, Harley-Davidson is charged with restrictive practices. In 1969, American Machinery and Foundry (AMF) bought the company, streamlined production, and slashed the workforce.” (Gwyneth K. Shaw, 195).

The result of such tactic was labor strikes and the quality of bikes was not so high any more. The produced during this time motorcycles were rather expensive but with poor performance and design in comparison with Japanese motorbikes. Sales went down and the company was on the edge of bankruptcy. The name “Harley Davidson” was transformed into “hardly Ableson”.

In 1981 a group of 13 investors with Vaughn Beals and Willie Davidson in the head bought the company from AMF. The produced the new model called “Sturgis”. Using the Just In Time system they were able to increase sales and quality. Their goal was no longer to match Japanese, they used the so-called “retro” style with some technical improvements.

In 1990 with the help of “Fat Boy” Harley managed to gain leadership among heavy motorbikes. The management of the company denies the fact of connection of this name with the names of the two bombs: Fat Man and Little Boy, thrown down on Nagasaki and Hiroshima.

“In 1999, Ford Motor Company added a Harley-Davidson edition to the Ford F-Series F-150 line, complete with the Harley-Davidson logo. This truck was an extended-cab for model year 1999. In 2000, Ford changed the truck to a crew cab and in 2002 added a super-charged engine (5.4L) which continued until 2003. In 2004, the Ford/Harley was changed to a Super-Duty, which continues through 2006. Ford will again produce a Harley-Davidson Edition F-150 for their 2006 model-year, as well” (Bach, Sharon and Ken Ostermann, 220).

The start of Harley Davidson Museum in the Menomonee Valley was on the 1^st of July in 2006. The museum is supposed to be opened in 2008 and is going to present the huge collection of motorcycles of the company, also a restaurant and meeting place.

Talking about heritage of Harley- Davidson we should mention the established Harley Owners Groups (H.O.G) in 1983. This was done according to the wish of Harley riders who wanted to have the possibility to show their passion and pride. Tow years later there were about 60.000 members. By the years 1990 and 1991 H.O.G became officially international, the first European rally was in Cheltenham in England. By this time there were about 151.600 members all over the world. In 1990s H.O.G was spreading to Asia and in 1999 the number of member increased to half of the million. Nowadays, H.O.G is considered to be one of the biggest worldwide organizations, sponsored by a factory. “H.O.G. benefits include organized group rides, exclusive products and product discounts, insurance premium discounts, and the Hog Tales newsletter.

Famous owners of Harley-Davidsons include singer Elvis Presley, comedian Jay Leno and professional wrestler The Undertaker.” (Wagner, Herbert, 228).

People love not only the products of the manufacturer, they also adore the logo of Harley. In 1988 they company sold products with logo for 20 million dollar. Later, this figure increased to 100 million dollar. This was certainly as well supporting the development of the company.

Overall, in this paper we tried to provide a short description of development, history, main models, ways of advertisement of the world known manufacturer of motor bicycles  – Harley – Davidson.  This was and is a great company, able to serve as business model example for others.