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Company Analysis
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“HARLEY-DAVIDSON”
Table of Contents
Sl.No Title
1. Introduction
2. Harley-Davidson: Company Profile
Financial Statement for Harley-Davidson Inc.
3.1 Annual Income Statement
3.2 Balance Sheet
3.3 Cash Flow Statement
3.
3.4 Additional Balance Sheet & Cash Flow Information
3.5 Inventories
3.6 Supplemental Cash Flow
3.7 Discontinued Operations
4. Stock: Harley-Davidson
5. Human Resource Management
6. Marketing
7. Corporate Governance Policy: Harley-Davidson
8. Product Line
9. Risk Management and Risk Factors
10. Investment Decision and Conclusion
11. Strategic Report for Harley Davidson
12. INCOME TAXES
13. COMMITMENTS AND CONTINGENCIES
14. BUSINESS SEGMENTS AND FOREIGN OPERATIONS
15. Global Ranking
16. HERITAGE HARLEY DAVIDSON
17. ADVERTISEMENTS
18. HARLEY AROUND THE GLOBE
EXTRA CURRICULAR ACTIVITIES OF HARLEY
19.
DAVIDSON
20. CONCLUSION
21. BIBILOGRAPHY
1. INTRODUCTION
Other aggregate measures less commonly used include sales revenue per employee, HR
cost per sales dollar and return on HR investment. These measures tend to be more
financially based and generally require more analytical skill to develop, use and interpret.
Likewise, program evaluation and benchmarking are not commonly used, although they
are powerful approaches to demonstrating HR's organizational contributions. External
wage and benefit surveys, a form of benchmarking, were used by all respondents,
however.
Several of the more specific measures (cost per employee training hour, cost per hire,
labor contract costing, and benefit cost ratios) are also based in cost accounting or
financial analysis. Again, many of these tended to be used less and were rated as less
important. One of the most frequently used and the most important measure was the
OSHA incident rate; this is the only measure on the list with a basis in federal regulation.
Efficiency vs. effectiveness. Many of the measures capture aspects of efficiency, but do
not necessarily provide much indication of effectiveness. For example, consider average
time to fill new and vacant positions: over a period of time, an HR department could
significantly reduce the cycle time to fill positions, but unless the right applicants are
chosen, HR may not be effective in staffing the organization.
Harley-Davidson, Inc. operates in two segments: the Motorcycles & Related Products
(Motorcycles) segment and the Financial Services segment. The Motorcycles segment
includes the group of companies doing business as Harley-Davidson Motor Company
(HDMC), Buell Motorcycle Company (Buell) and MV Agusta (MV). The Motorcycles
segment designs, manufactures and sells at wholesale primarily heavyweight (engine
displacement of 651+cubic centimeters) touring, custom and performance motorcycles,
as well as a line of motorcycle parts, accessories, general merchandise and related
services. The Financial Services segment includes the group of companies doing business
as Harley-Davidson Financial Services (HDFS). HDFS provides wholesale and retail
financing and, as an agent, provides insurance and insurance-related programs primarily
to Harley-Davidson and Buell dealers and their retail customers. HDFS conducts business
in the United States and Canada. In August 2008,it acquired MV Agusta Group.
BRIEF: For the three months ended 29 March 2009, Harley- Davidson, Inc.'s revenues
decreased 1% to $1.40B. Net income decreased 37% to $117.3M. Revenues reflect a
decrease in demand for motorcycles and lower financial services income. Net income
also reflects an increase in financial service expenses, higher Motorcycles segment
operating expenses, the presence of interest expense and lower net investment income.
2.2 History.
In 1901, William S Harley, age 21, drew up plans for a small engine with a displacement
of 7.07 cubic inches (116 cc) and four-inch (102 mm) flywheels. The engine was
designed for use in a regular pedal-bicycle frame.
Over the next two years Harley and his childhood friend Arthur Davidson labored on
their motor-bicycle using the north side Milwaukee machine shop at the home of their
friend, Henry Melk. It was finished in 1903 with the help of Arthur's brother, Walter
Davidson Upon completion the boys found their power-cycle unable to conquer
Milwaukee's modest hills without pedal assistance. Will Harley and the Davidson’s
quickly wrote off their first motor-bicycle as a valuable learning experiment.
Work immediately began on a new and improved second-generation machine. This first
"real" Harley-Davidson motorcycle had a bigger engine of 24.74 cubic inches (405 cc)
with 9.75 inches (25 cm) flywheels weighing 28 lb (13 kg). The machine's advanced
loop-frame pattern was similar to the 1903 Milwaukee Merkel motorcycle (designed by
Joseph Merkel, later of Flying Merkel fame.) The bigger engine and loop-frame design
took it out of the motorized-bicycle category and would help define what a modern
motorcycle should contain in the years to come. The boys also received help with their
bigger engine from outboard motor pioneer Ole Evinrude, who was then building gas
engines of his own design for automotive use on Milwaukee's Lake Street.
The prototype of the new loop-frame Harley-Davidson was assembled in a 10- by 15-foot
(3 by 5 meter) shed in the Davidson family backyard. Most of the major parts, however,
were made elsewhere, including some probably fabricated at the West Milwaukee
railshops where oldest brother William A. Davidson was then tool room foreman. This
prototype machine was functional by 8 September 1904 when it competed in a
Milwaukee motorcycle race held at State Fair Park. It was ridden by Edward Hildebrand
and placed fourth. This is the first documented appearance of a Harley-Davidson
motorcycle in the historical record.
In January 1905, small advertisements were placed in the "Automobile and Cycle Trade
Journal" that offered bare Harley-Davidson engines to the do-it-yourself trade. By April,
complete motorcycles were in production on a very limited basis. That year the first
Harley-Davidson dealer, Carl H. Lang of Chicago, sold three bikes from the dozen or so
built in the Davidson backyard shed. (Some years later the original shed was taken to the
Juneau Avenue factory where it would stand for many decades as a tribute to the Motor
Company's humble origins. Unfortunately, the first shed was accidentally destroyed by
contractors in the early 1970s during a clean-up of the factory yard.)
In 1906, Harley and the Davidson’s built their first factory on Chestnut Street (later
Juneau Avenue). This location remains the Motor Company's corporate headquarters
today. The first Juneau Avenue plant was a 40 by 60-foot (18 m) single-story wooden
structure. That year around 50 motorcycles were produced.
Production in 1905 and 1906 were all single-cylinder models with 26.84 cubic inch (440
cc) engines. In February 1907 a prototype model with a 45-degree V-Twin engine was
displayed at the Chicago Automobile Show. Although shown and advertised, very few V-
Twin models were built between 1907 and 1910. These first V-Twins displaced 53.68
cubic inches (880 cc) and produced about 7 horsepower (5 kW). This gave about double
the power of the first singles. Top speed was about 60 mph (97 km/h). Production jumped
from 450 motorcycles in 1908 to 1,149 machines in 1909
By 1911 some 150 makes of motorcycles had already been built in the United States –
although just a handful would survive the 1910s.In 1911, an improved V-Twin model
was introduced. The new engine had mechanically operated intake valves, as opposed to
the "automatic" intake valves used on earlier V-Twins that opened by engine vacuum.
With a displacement of 49.48 cubic inches (810 cc), the 1911 V-Twin was smaller than
earlier twins, but gave better performance. After 1913 the majority of bikes produced by
Harley-Davidson would be V-Twin models.
By 1913, the yellow brick factory had been demolished and on the site a new 5-story
structure of reinforced concrete and red brick had been built. Begun in 1910, the red brick
factory with its many additions would take up two blocks along Juneau Avenue and
around the corner on 38th Street. Despite the competition, Harley-Davidson was already
pulling ahead of Indian and would dominate motorcycle racing after 1914. Production
that year swelled to 16,284 machines.
In the mid-'30s, Alfred Rich Child opened a production line in Japan with the 74ci VL.
The Japanese license-holder severed its business relations with Harley-Davidson in 1936
and continued manufacturing the VL under the Rikuo name.
An 80 cubic inch flathead engine was added to the line in 1935, by which time the single-
cylinder motorcycles had been discontinued.
In 1936, the 61E and 61EL models with the "Knucklehead" OHV engines was
introduced. Valvetrain problems in early Knucklehead engines required a redesign
halfway through its first year of production and retrofitting of the new valvetrain on
earlier engines.
By 1937, all Harley-Davidson's flathead engines were equipped with dry-sump oil
recirculation systems similar to the one introduced in the "Knucklehead" OHV engine.
The revised 74 cubic inch V and VL models were renamed U and UL, the 80 cubic inch
VH and VLH to be renamed UH and ULH, and the 45 cubic inch R to be renamed W.
In 1941, the 74 cubic inch "Knucklehead" was introduced as the F and the FL. The 80
cubic inch flathead UH and ULH models were discontinued after 1941, while the 74" U
& UL flathead models were produced up to 1948
In 1952, following their application to the US Tariff Commission for a 40% tax on
imported motorcycles, Harley-Davidson was charged with restrictive practices.
Hollywood also damaged Harley's image with many outlaw biker gang films produced
from the 1950s through the 1970s, following the 1947 Hollister, CA biker riot on July 4.
"Harley-Davidson" for a long time was synonymous with the Hells Angels and other
outlaw motorcyclists.
In 1969, American Machinery and Foundry (AMF) bought the company, streamlined
production, and slashed the workforce. This tactic resulted in a labor strike and a lower
quality of bikes. The bikes were expensive and inferior in performance, handling, and
quality to Japanese motorcycles. Sales declined, quality plummeted, and the company
almost went bankrupt.[36] The "Harley-Davidson" name was mocked as "Hardly
Ableson", "Hardly Driveable," and "Hogly Ferguson",[37][38] and the nickname "Hog"
became pejorative.
In 1981, AMF sold the company to a group of thirteen investors led by Vaughn Beals and
Willie G. Davidson for $80 million. Inventory was strictly controlled using the Just In
Time system. In the early eighties, Harley-Davidson claimed that Japanese manufacturers
were importing motorcycles into the US in such volume as to harm or threaten to harm
domestic producers. After an investigation by the US International Trade Commission,
President Reagan imposed in 1983 a 45% tariff on imported bikes and bikes over 700 cc
engine capacity. Harley Davidson subsequently rejected offers of assistance from
Japanese motorcycle makers.
Rather than trying to match the Japanese, the new management deliberately exploited the
"retro" appeal of the machines, building motorcycles that deliberately adopted the look
and feel of their earlier machines and the subsequent customizations of owners of that
era. Many components such as brakes, forks, shocks, carburetors, electrics and wheels
were outsourced from foreign manufacturers and quality increased, technical
improvements were made, and buyers slowly returned. To remain profitable Harley
continues to increase the amount of overseas-made parts it uses, while being careful not
to harm its valuable "American Made" image.
The "Sturgis" model, boasting a dual belt-drive, was introduced. By 1990, with the
introduction of the "Fat Boy", Harley once again became the sales leader in the
heavyweight (over 750 cc) market. At the time of the Fat Boy model introduction a story
rapidly spread that its silver paint job and other features were inspired by the World War
II American B-29 bomber; and that the Fat Boy name was a combination of the names of
the atom bombs (Fat Man and Little Boy) that were dropped on Nagasaki and Hiroshima
respectively. However, the Urban Legend Reference Pages lists this story as an urban
legend.
1994 saw the replacement of the FXR frame with the Dyane, though it was revived
briefly in 1999 and 2000 for special limited editions. 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 a Super Cab for model year 1999. In 2000, Ford
changed the truck to a crew cab and in 2002 added a super-charged engine (5.4 L) which
continued until 2003. In 2004, the Ford/Harley was changed to a Super-Duty, which
continues through 2006. Ford again produced a Harley-Davidson Edition F-150 for their
2006 model-year, as well.
Harley Davidson Inc (NYSE:HOG) stock price (source: ZenoBank.com). During its
period of peak demand, during the late 1990s and early 2000s, Harley-Davidson
embarked on a program of expanding the number of dealerships throughout the country.
At the same time, its current dealers typically had waiting lists that extended up to a year
for some of the most popular models. Harley-Davidson, like the auto manufacturers,
records a sale not when a consumer buys their product, but rather when it is delivered to a
dealer. Therefore, it is possible for the manufacturer to inflate sales numbers by requiring
dealers to accept more inventory than desired in a practice called channel stuffing. When
demand softened following the unique 2003 model year, this news lead to a dramatic
decline in the stock price. In April 2004 alone, the price of HOG shares dropped from
over $60 to under $40. Immediately prior to this decline, retiring CEO Jeffrey Bluestein
profited $42 million on the exercise of employee stock options. Harley-Davidson was
named as a defendant in numerous class action suits filed by investors who claimed they
were intentionally defrauded by Harley-Davidson's management and directors. By
January 2007, the price of Harley-Davidson shares reached $70.
On February 2, 2007, upon the expiration of their union contract, about 2,700 employees
at Harley-Davidson Inc.'s largest manufacturing plant in York, PA went on strike after
failing to agree on wages and health benefits. During the tendency of the strike, the
company refused to pay for any portion of the striking employees' health care. The day
before the strike, after the union voted against the proposed contract and to authorize the
strike, the company shut down all production at the plant. The York facility employs
more than 3,200 workers, both union and non-union.
Harley-Davidson announced on February 16, 2007, that it had reached a labor agreement
with union workers at its largest manufacturing plant, a breakthrough in the two-week-
old strike. The strike disrupted Harley-Davidson’s national production and had ripple
effects as far away as Wisconsin, where 440 employees were laid off, and many Harley
suppliers also laid off workers because of the strike.
FINANCIAL ANALYSIS
2007 2004
2008 2006 2005
In Millions of U.S. Dollars 2007-12-31 2004-12-31
2008-12- 2006-12- 2005-12-
(except for per share items) Reclassified Reclassified
31 31 31
2008-12-31 2005-12-31
Cash -- -- -- -- --
Cash & Equivalents 593.6 402.9 238.4 141.0 275.2
Short Term Investments 0.0 2.5 658.1 905.2 1,336.9
Cash and Short Term
593.6 405.3 896.5 1,046.2 1,612.1
Investments
Accounts Receivable - Trade,
4,118.7 2,537.8 2,244.4 1,763.9 1,745.4
Net
Notes Receivable - Short Term -- -- -- -- --
Receivables – Other -- -- -- -- --
Total Receivables, Net 4,118.7 2,537.8 2,244.4 1,763.9 1,745.4
Total Inventory 400.9 349.7 287.8 221.4 226.9
Prepaid Expenses 141.4 71.2 48.5 52.5 38.3
Other Current Assets, Total 123.3 103.3 73.4 61.3 60.5
Total Current Assets 5,377.9 3,467.3 3,550.6 3,145.2 3,683.2
Property/Plant/Equipment, Total
3,032.0 2,757.9 2,532.5 2,334.1 2,193.4
– Gross
Accumulated Depreciation, Total (1,937.5) (1,697.4) (1,508.0) (1,322.5) (1,168.7)
Property/Plant/Equipment, Total
1,094.5 1,060.6 1,024.5 1,011.6 1,024.7
– Net
Goodwill, Net 138.6 61.4 58.8 56.6 59.5
Intangibles, Net -- -- -- -- --
Long Term Investments -- -- -- -- --
Note Receivable - Long Term 817.1 845.0 726.0 600.8 488.3
Other Long Term Assets, Total 400.6 222.3 172.3 441.0 227.7
Other Assets, Total -- -- -- -- --
Total Assets 7,828.6 5,656.6 5,532.1 5,255.2 5,483.3
Accounts Payable 323.7 300.2 283.5 270.6 244.2
Payable/Accrued -- -- -- -- --
Accrued Expenses 490.7 431.0 295.5 234.6 267.9
Notes Payable/Short Term Debt 1,762.2 756.9 0.0 0.0 0.0
Current Port. of LT Debt/Capital
0.0 397.5 832.5 205.0 495.4
Leases
Other Current liabilities, Total 27.2 19.5 184.2 162.9 165.2
Total Current Liabilities 2,603.8 1,905.1 1,595.7 873.1 1,172.7
Long Term Debt 2,176.2 980.0 870.0 1,000.0 800.0
Capital Lease Obligations -- -- -- -- --
Total Long Term Debt 2,176.2 980.0 870.0 1,000.0 800.0
Total Debt 3,938.4 2,134.4 1,702.5 1,205.0 1,295.4
Deferred Income Tax -- -- 0.0 155.2 51.4
Minority Interest -- -- -- -- --
Other Liabilities, Total 933.0 396.0 309.7 143.3 240.7
Total Liabilities 5,713.0 3,281.1 2,775.4 2,171.6 2,264.8
Redeemable Preferred Stock,
-- -- -- -- --
Total
Preferred Stock - Non
-- -- -- -- --
Redeemable, Net
Common Stock, Total 3.4 3.4 3.3 3.3 3.3
Additional Paid-In Capital 846.8 812.2 766.4 596.2 533.1
Retained Earnings (Accumulated
6,458.8 6,117.6 5,460.6 4,630.4 3,844.6
Deficit)
Treasury Stock – Common (4,670.8) (4,420.4) (3,267.0) (2,205.0) (1,150.4)
ESOP Debt Guarantee -- -- -- -- --
Unrealized Gain (Loss) (10.4) (3.2) -- -- --
Other Equity, Total (512.2) (134.1) (206.7) 58.7 (12.1)
Total Equity 2,115.6 2,375.5 2,756.7 3,083.6 3,218.5
Total Liabilities & Shareholders'
7,828.6 5,656.6 5,532.1 5,255.2 5,483.3
Equity
Shares Outs - Common Stock
232.76 238.49 258.05 274.00 294.31
Primary Issue
Shares Outstanding - Common
-- -- -- -- --
Issue 2
Shares Outstanding - Common
-- -- -- -- --
Issue 3
Shares Outstanding - Common
-- -- -- -- --
Issue 4
Total Common Shares
232.76 238.49 258.05 274.00 294.31
Outstanding
Total Preferred Shares
-- -- -- -- --
Outstanding
3.5 Inventories
3.6 Supplemental cash flow
Of the interest paid in 1997 and 1996, approximately $3.5 million and $2.1 million was
capitalized, respectively. Interest paid includes the interest payments of Eaglemark for
which the related expense is classified as part of operating income from financial
services.
Market Capitalization
Market Cap ($ Millions) 4,100.60
Shares Outstanding 234.45
Float 232.10
Valuation Ratios
Price/Earnings 7.00
Price/Sales 0.69
Price/Book 1.92
Price/Cash Flow 4.67
Profitability Ratios (%)
Gross Margin 33.36
Operating Margin 16.26
Net Profit Margin 9.80
Financial Strength
Quick Ratio 1.91
Current Ratio 2.07
LT Debt/Equity 102.87
Total Debt/Equity 186.16
Dividend Information
Dividend Yield (%) 2.29
Dividend Per Share ($ USD) 1.09
Payout Ratio 46.17
INTERNAL ANALYSIS
FINANCIAL RATIOS:-
LIQUIDITY RATIOS
Current Ratio = Current Assets / Current Liabilities
= 2729/956
= 2.85
Quick Ratio = (Current Assets – Inventory) / Current Liabilities
= (2729-208)/956
= 2521/956 = 2.63
LEVERAGE RATIOS
Debt to Total Assets Ratio = Total Debt / Total Assets
=994/4923
=0.20
Debt to Equity Ratio = Total debt / Total stock holders equity
=994/2958
=0.34
Long Term Debt Equity Ratio = Long term Debt / Total stock holders equity
=670/2958
= 0.23
Times Interest Earned Ratio = Profits before interests and taxes / Total Interest charges
=1149/0
ACTIVITY RATIOS
Inventory Turnover = Sales / Inventory of finished goods
=4624/208
=22.23
PROFITABILITY RATIOS
Gross Profit Margin = (Sales – COGS) / Sales
= (4624-3070)/4624
=1554/4624=0.34
Operating Profit Margin = EBIT / Sales
=1149/4624
=0.25
Net Profit Margin = Net Income / Sales
=761/4624
= 0.16
Return on Total Assets (ROA) = Net Income / Total Assets
= 761 / 4923
= 0.15
Return on Equity (ROE) = Net income / Total Stock holders equity
= 761 / 2958
= 0.26
Earnings Per share (EPS) = Net income / Total stock holders equity
= 761 / 302
= 2.519
Price Earning ratio=Market price per share/Earning per share
=39.11/2.519
=15.526
Growth ratio Sales=Annual % growth in total sales
= (4624-4091)*100/4091=13.029
Net income =Annual % growth in profits
= (760-580)*100/580=31.034
On January 22, 1996, the Company announced its strategic decision to discontinue the
operations of the Transportation Vehicles segment in order to concentrate its financial
and human resources on its core motorcycle business. The Transportation Vehicles
segment was comprised of the Recreational Vehicles division, the Commercial Vehicles
division and B & B Molders, a manufacturer of custom or standard tooling and injection
molded plastic pieces. During 1996, the Company completed the sale of the
Transportation Vehicles segment for an aggregate sales price of approximately $105
million; approximately $100 million in cash and $5 million in notes and preferred stock.
It is the Company’s policy to allocate interest on debt (to be assumed by the buyer) to
discontinued operations, which was approximately $.7 million and $2.5 million for 1996
and 1995, respectively.
4. STOCK
Options on stocks and stock indexes are derivative instruments. Stock investors
may use stock options to hedge against a price decline, to lock in a future purchase price,
or to speculate on the future price of a stock. Employees may also receive stock options
through an employee compensation plan. For employees, stock options represent the
potential for growth in value and the possibility that the increase in value will be taxed at
a favorable capital-gains tax rate.
A stock option is essentially a contract that gives one party the right to purchase
or sell a stated number of shares of a stock at a specified price. The price at which the
shares may be purchased or sold is known as the strike or exercise price. The right to
exercise lasts for a stated period of time, which may be months or years, until
the expiration date. If not exercised on or before the expiration date, the option expires.
Options come in two forms: calls and puts. A call option gives the option purchaser the
right to buy the underlying stock. A put option gives the option purchaser the right to
sell the underlying stock.
A call option is valuable to the extent that the exercise price is below the market
value of the underlying stock. For example, if a stock is trading at $100 per share and you
hold a call option entitling you to buy the stock at $72 per share, your option has an
immediate value to you of $100 – $72 = $28, before taking into account any tax
consequences or transaction fees.
A put option is the mirror image of a call option. A put option becomes more
valuable as the price of the stock moves below the exercise price. For example, if you
have purchased a put option with a strike price of $90 and the stock price moves to $80,
you may choose to exercise the option and sell the underlying stock at $90 for an
immediate unrealized per share gain of $90 – $80 = $10.
With both calls and puts, the purchaser of the option has the right to exercise,
while the option seller is obligated to respond if the option is exercised. The option
purchaser pays an upfront fee known as the premium to the option seller in return for the
right of exercise. The option buyer has a known investment risk — if the option expires
unexercised, the purchaser of the option recognizes the premium paid as a loss.
Conversely, the option seller undertakes potentially unlimited market risk in return for
the premium received.
Option contracts are traded on regulated markets, and their values may fluctuate
throughout the trading day. The price of an option at any given time is based on several
factors, including the current price of the underlying stock, the price volatility of the
underlying stock, the time to maturity, and interest rates.
Intrinsic value — the intrinsic value of the option is the difference between the exercise
price and the price of the underlying security. An option is "in the money" when the
intrinsic value is positive.
Volatility — part of an option’s value reflects the volatility of the underlying security. If
a stock price is highly volatile, there is a relatively greater chance that the option will be
"in the money" at expiration, and therefore, the option will carry a higher premium than
an option on a less a volatile stock.
Time value — the more time remaining until the expiration date of the option, the greater
the potential for a significant change to occur in the price of the underlying security and
the greater the value of the option. Time value diminishes as the expiration date of the
option approaches.
Interest rates — the option premium is a cash payment that can be invested by the
option seller to generate interest income. Higher interest rates present opportunities for
potentially greater earnings on the option premium.
Intrinsic value, volatility, and time value can significantly affect an option’s market
value. An option with an exercise price above the current market value of the underlying
security may still have considerable potential value.
For example, if you hold a call option with an exercise price of $72 and the
current share price is $65; your option would generate a loss if it were exercised today.
However, as stated above, option contracts typically are valid for months or years, until
the stated expiration date. The time value of the call option is the potential that the share
price will rise over time and eventually exceed the option exercise price.
An incentive stock option (ISO) must meet a number of criteria to qualify for
favorable tax treatment. As long as the shares acquired through an ISO are held for at
least one year following exercise and are not disposed of until at least two years after the
option is granted, the difference between the option price and the sale price is taxed as a
long-term gain. The tax is applied at the sale of the stock. If you don’t meet the one-year
holding-period requirement, the transaction is considered a "disqualifying disposition"
and your gains are taxed as ordinary income.
A nonqualified stock option (NSO) is an option that doesn’t meet the ISO
criteria. Gains on NSOs are taxed as ordinary income at the time of exercise.
4.5 Stock Quote of Harley Davidson:
HOG - NYSE
4:12 PM ET - Jul 13
2009
$ 16.58
$ 0.40
3,919,200
18,532
$ 15.76
$ 16.60
$ 7.99
$ 48.05
Harley Davidson’s stock has been relatively flat over the last 12 months as a
whole, underperforming the S&P 500, indicating the market sentiment that Harley
Davidson will not be able to maintain its current growth trend which has yielded record
revenues, profits, and earnings per share each year for the past 19 years. The 12 month
stock prices can be seen in Figure 1, along with returns on the S&P 500. The stock has
been quite volatile over that period indicating that the market as an institution may be
having a hard time making up its mind about the prospects for Harley Davidson. In April
2005 Harley Davidson share prices dropped by nearly 1/3 when the company announced
that it was lowering its guidance on motorcycle shipment growth due to 16 increasingly
clogged retail channels and building inventories. A two year record of Harley Davidson
share prices can be seen in Figure 2. In the wake of that announcement many analysts
began to predict doom for the company, especially for its fourth quarter. Citigroup
analysts even predicted growth of less than 1% for Harley’s motorcycle shipments in the
fourth quarter, even though guidance from the company’s management predicted growth
between 4 and 6 percent. Harley Davidson’s actual shipment growth was within its
guidance range, a much better result than many analysts had predicted.
Harley Davidson’s stock has recently been trading at a slight premium to the
stock of Honda. Harley Davidson’s recent price to earnings ratio has been 15.51 versus
15.16 for Honda. Comparable P/E ratios and share prices were not available for Suzuki or
Yamaha due to the fact that neither company is traded in US stock exchanges.
As a value investing shop, we are interested in seeing how HOG's revenues measure up
against past performances. One easily understandable way of doing that is to compare
Price to Sales per share levels over a given time frame. Assuming it is available, Ockham
prefers to look at ten years of history (for this stock there are 10 years of history
available) and we weigh recent years more heavily. This allows us to find weighted
average historical high and low Price to Sales ratios, which give us a better idea of the
stock's current underlying value. Using this method, we have established a high range for
Price to Sales of 3.12x and the low end of the range at 1.89x.
With respect to these historically rational metrics, notice that the current Price to Sales
per share ratio for HOG of 0.68x is well below its normal historic Price to Sales levels.
At a price of $16.18, HOG is 73% below where we would expect to see it. Clearly, this
stock looks undervalued compared to historical levels, at least on a Price to Sales basis.
This will positively affect our analysis because it is rare to find a stock this far below
historical norms, and we would expect some price appreciation to bring this metric back
towards a more normal range.
Cash Earnings is always one of the most important factors to review for a company and,
more importantly, an investment in a stock. HOG is significantly below their historical
average multiples of Cash Earnings, as calculated by our proprietary analysis. It is
incredibly important to understand that for HOG, the current level of Cash Earnings
compared to its historical levels helps identify where HOG is in relation to what the
investing community was willing to pay for this level of Cash Earnings in the past. With
a historical high Cash Earnings per share ratio of 16.04 and a historical low Cash
Earnings per share ratio of 9.50, an investor can relate where value becomes optimal.
So what does "significantly below" mean when we talk about Price to Cash Earnings
numbers for HOG? From the Ockham perspective, we are looking specifically at HOG to
see if the market is recognizing the huge disparity between HOG's past stock price to
Cash Earnings ratio to today's levels. At a difference of 65% below the average historical
Price to Cash Earnings ratio, our view would be quite positive at this point. However, as
with all metrics, we need to also take other factors into account when looking at HOG.
While we view better Cash Earnings metrics as very important, if the market is slow to
identify this value, or if Cash Earnings were to fall from these levels, we would become
more neutral in our stance.
HOG DIVIDENDS
When determining a company's future prospects for success, Ockham Research sees
analysis of dividend payments as a key additional factor. Even though it isn't imperative
for HOG to shell out a dividend in order to receive a positive rating, it can be helpful to
further our analysis.
The estimated annual dividend for HOG is $0.40 producing a current dividend yield of
2.47%. Much like our evaluation of Sales and Cash Earnings per share, we review
dividend yields from HOG against the historic high and low levels over all available
dividend history. Because dividends are a decision made exclusively by management, we
view a healthy and rising dividend as a sign of confidence and strength. The highest
dividend yield from HOG over previous years was 11.28% while the lowest dividend
yield was 0.20%. It is never a good sign for a company to pay significantly lower
dividends, in this case 56.97% below the median yield. Although, dividends are a
relatively small portion of our analysis framework, we still see this as
The HRM function and HRD profession have undergone tremendous change over
the past 20-30 years. Many years ago, large organizations looked to the "Personnel
Department," mostly to manage the paperwork around hiring and paying people. More
recently, organizations consider the "HR Department" as playing a major role in staffing,
training and helping to manage people so that people and the organization are performing
at maximum capability in a highly fulfilling manner.
Abstract:
The case discusses the human resource initiatives adopted by Harley-Davidson Motor
Company (H-D), the leading manufacturer of heavy-weight motorcycles in the US,
to encourage greater employee participation and collaboration.
In 1992, H-D adopted circle based organization structure in its efforts to foster teamwork
among the employees and do away with the command-and-control leadership style
of management. The case also discusses another major HR initiative that H-D
implemented in 2004; the deployment of 'Accenture Human Capital Development
Framework' (HCDF).
This initiative was undertaken by the company in order to bring about major
improvements in its human resource functions, and thereby attain improved business
performance. The case describes the HCDF in detail and the benefits reaped by H-D after
its implementation
Introduction
This initiative was undertaken by H-D in order to bring about improvements in its
human resource (HR) functions, and thereby attain improved business performance.
This was the second time that the HCDF framework was being implemented in the
company, the first time being in 2004.
Another major HR initiative that H-D adopted to encourage greater employee
participation and collaboration in 1992 was the circle organization. The rationale behind
creating such circles was to come out of the command-and-control leadership style of
management and foster teamwork among the employees. H-D took these initiatives after
the company's new management realized that in order to survive in a highly competitive
market in the long run, it was essential to make the company a continuous learning and
improving organization where there was free and open communication between all levels
of the employees.
Each and every employee, it felt, should be able to comprehend their roles in the
company and the consequence of their roles to the company.
• Management, with the help of its words and actions, must reveal that continuous
improvement of quality and efficiency is a way of life, and not merely another program.
• Management must be firmly committed to the people-building philosophy, which
implied the belief that employees are thinking, rational human beings and hence they
should be encouraged to develop and grow.
• Management must be strictly committed to the Employee Involvement program and
should display that commitment cultivates a mutual trust between the employees and the
management.
• Employees should be comprehensively trained in specific problem-solving and methods
of quality control...
The Company has several noncontributory defined benefit pension plans covering
substantially all employees of the Motorcycles segment. Benefits are based primarily on
years of service and, for certain plans, levels of compensation. The Company’s policy
with respect to the pension plans is to fund pension benefits to the extent contributions
are deductible for tax purposes.
The following data is provided for the pension plans for the years indicated:
The assumptions used in determining pension expense (for the following year)
and funded status information shown above were as follows:
Included in plan assets are 453,096 shares of the Company’s common stock at
December 31, 1997 and 1996. The market value of these shares at December 31, 1997
and 1996 was $12.3 million and $10.6 million, respectively. Dividends paid on these
shares were approximately $61,000 and $47,000 during 1997 and 1996, respectively.
Certain of the Company’s plans relating to hourly and salaried employees have
been amended to increase the scheduled benefits. During 1996, the Company accrued
approximately $2.0 million related to early retirement benefits offered to some hourly
employees.
The Company has various defined contribution benefit plans which in total cover
substantially all full-time employees. Employees can make voluntary contributions in
accordance with the provisions of their respective plan, which includes a 401(k) tax
deferral option. The Company accrued $2.9 million, $2.0 million and $1.5 million for
matching contributions during 1997, 1996 and 1995, respectively.
The Company also has unfunded supplemental executive retirement plan (SERP)
agreements with certain executive officers. The plan was instituted to replace benefits
lost under the Tax Revenue Reconciliation Act of 1993. The Company has recorded a net
liability of $4.8 million and $4.1 million for the SERP at December 31, 1997 and 1996,
respectively.
The Company has several postretirement health care benefit plans covering
substantially all employees of the Motorcycles segment. Employees are eligible to
receive benefits upon attaining age 55 after rendering at least 10 years of service to the
Company.
The Company’s postretirement health care plans are currently funded as claims
are submitted ($2.5 million in 1997 and $2.3 million in 1996). Some of the plans require
employee contributions to offset benefit costs. The status of the plans was as follows:
The weighted average health care cost trend rate used in determining the
accumulated postretirement benefit obligation of the health care plans was 8% in 1997.
The per capita health care cost trend rate is assumed to decrease gradually to 6% for 1999
and remain at that level thereafter. This assumption can have a significant effect on the
amounts reported. If the weighted average health care cost trend rate were to increase by
1%, the accumulated postretirement benefit obligation as of September 30, 1997 and the
aggregate of service and interest cost components of net periodic postretirement benefit
cost for the year ended December 31, 1998 would increase by $5.4 million and $.8
million, respectively. The weighted average discount rate used to determine the
accumulated postretirement benefit obligation of the health care plans as of September
30, 1997 and 1996 was 8.25%.For purposes of pro forma disclosures under SFAS No.
123, the estimated fair value of the options is amortized to expense over the options’
vesting period. The Company’s pro forma information follows:
In determining the effect of SFAS No. 123, the Black-Scholes option pricing
model was used with the following weighted-average assumptions for 1997 and 1996:
risk-free interest rate of approximately 6% and 5%, respectively; dividend yield of .5%;
expected common stock market volatility factor of .4; and a weighted-average expected
life of the options of two years from the vesting date. Forfeitures are recognized as they
occur. These pro forma calculations only include the effects of 1997, 1996 and 1995
grants.
MARKETING
Case Details:
Case Code : MKTG174
Case Length : 19 Pages
Period : 1995-2007
Pub Date : 2007
Teaching Note : Not Available
Organization : Harley-Davidson
Industry : Automobile - Motorcycle
Countries : US
Abstract
The case discusses the marketing strategies of the US-based motorcycle manufacturer
Harley-Davidson Motor Company (H-D). It details the marketing mix elements of
H-D including product, price, distribution and promotion strategies of the company.
Notwithstanding the success of H-D's marketing strategies, some critics were of the
opinion that H-D was not focusing on its core competency, i.e. motorcycles, and
said that by putting its logo on several products, the company was diluting its
brand. Analysts also criticized H-D's dealers, saying they still had a long way to go
in maintaining good relationships with the company's customers.
6.1 Issues
Keywords:
6.2 Introduction
However, despite the success that H-D had achieved over the decades, it came in
for quite a bit of criticism from analysts. Some critics were of the opinion that H-D was
moving from its core competency, i.e. motorcycles, and diluting its brand image. They
also criticized H-D dealers, saying they still had a long way to go in maintaining good
relationships with the company's customers.
Background Note
In the year 1969, H-D was taken over by the American Machine and Foundry
(AMF). During this period, the production of motorcycles increased by more than 300
percent to 14,000 motorcycles per annum. However, the quality of the motorcycles was
one aspect which was totally ignored. Adding to H-D's problems, Japanese manufacturers
began flooding the market with high-quality, low-priced light to medium-weight
motorcycles in the 1970s at a time when H-D was manufacturing mainly heavy-weight
motorcycles. The company earned a bad name for poor quality products. Coupled with
the competition from the Japanese companies brought H-D to the verge of collapse.
Pricing
H-D realized that it would not be possible for it to compete with the Japanese
manufacturers on the pricing front. This was because manufacturers like Honda not only
manufactured a low-priced high-quality product, but also spent heavily on advertising
their products.
Distribution
H-D started selling its motorcycles through its dealers in 1904. The company's first
dealer was CH Lang of Chicago, Illinois (Refer to Exhibit IV for the number of H-D's
full-line dealer outlets in the US). All the dealers were independent individuals with a
business orientation...
Promotion
Over the decades, H-D had adopted several strategies to promote its motorcycle brand.
The products of H-D were sold to retail customers mainly through dealer promotions,
customer events, and advertising through national television, print, radio, direct mailings,
and through advertising on the Internet.
Though H-D was able to successfully overcome the crisis which had confronted the
company during the early 1980s, it came in for plenty of criticism in the process.
Industry experts criticized the company's move to license several of its products.
They opined that H-D should focus on its core competency i.e. motorcycles and said that
by putting its logo on several products, the company was selling out and diluting its
brand.
H-D had four major marketing objectives. First, it wanted to expand its potential
customer base to include both enthusiast and non-enthusiast affluent males in the 35-44
age group. This was partly accomplished by introducing the V-ROD model to the
younger demographic.
Second, H-D wanted to enhance its market share by targeting the first time buyers of
motorcycles. Third, it wanted to set the appropriate pricing strategy, which appealed to
the target customers, through market research.
When H-D was formed, it only offered one color of motorcycle - gray and three basic
styles. Later, the company began to offer a variety of models, including Sportsters, Super
Glides, Low Riders, Softails, Sport Glides, Tour Glides and Electra Glides, in numerous
vivid colors. Many of these models were developed when H-D realized its customers
were customizing the bikes but these additional revenues were not coming to the
company.
In 1999, H-D introduced the Custom Vehicle Operations (CVO) program, which
offered a limited quantity of H-D motorcycles, which had been uniquely customized at
the factory with H-D accessories. The limited edition motorcycles were produced at the
York, Pennsylvania facility on a separate, low volume assembly line that was formerly
used for military contract production.
6.7 Advertising & Promotion
H-D's marketing communications mix had evolved over time. In the early 1990s, dealer
promotions, customer events, magazine and direct mail advertising, public relations and
cooperative programs drove H-D's marketing efforts. The company started advertising in
magazines targeted at the general public. Fashions and Collectible catalogs were
produced with various H-D merchandise twice a year. Clothes sold in stores such as
Bloomingdale and J.C. Penny exposed H-D to people who might not have thought about
visiting a dealership.
H-D believed its key strength lay in its brand image rather than technology. It had built
its brand image by expressing the emotional bonding of American Youth.
"The bike represents to America, the adventurous pioneer spirit, the wild west, having
your own horse, and going where you want to go - the motorcycle takes on some
attributes of the iron horse. It suggests personal freedom and independence. Brand
loyalty for H-D is emotional.
The H-D's symbol is based on a pattern of association that includes the American flag
and the eagle; reflective of the passion for freedom Americans enjoyed."
H-D measured brand loyalty by the percentage of men and women who tattooed the
company's logo on their body. By that measure, H-D had the highest loyalty of any brand
in the world. The most popular tattoo in the US was the H-D shield. Many H-D owners,
even those who did not have tattoos, saw H-D a
The experience of riding an H-D, or even an association that came from wearing H-D
clothing, was a way for some to express their individuality.
H-D had a vigorous global program of trademark registration and enforcement...s an
important part of their identity.
H-D's ambitious vision was to more than double its production for the company's 100th
anniversary.
The company had decided on a 9.6 percent annual increase in motorcycle production to
289,000 in 2003...
As many enthusiasts may describe it, the pride of owning a Harley-Davidson is the pride
of owning an 'American Icon'. Harley-Davidson's (HD) positioning strategy can best be
defined by its mission statement: "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." Now in
its 100th year, however, the ideal of owning an 'American Icon' has slowly dwindled out
of the public's mind, due mostly to the competition from Japanese manufacturers like
Honda and Yamaha. HD's strength's of its powerful brand image, maintaining good
customer relationships, strong financial position, and superiority of technology and
design are hindered by its weaknesses related to product capacity and unfulfilled demand
for their products2.
During the 1970's, HD was facing a decline in market share due to increased competition
with Japanese companies. By phasing out weak models, becoming more selective, and
limiting sales and promotions, HD was able to carve out a niche in the marketplace which
it enjoys today3. Now again faced with a period of decline, HD is relying on its newly
adopted marketing objectives. First, HD needs to expand its potential customer base to
include enthusiasts and non-enthusiasts males in the 35-44 age group. (INSERT
MEDIAMARK DATA HERE) This is accomplished through the introduction of the V-
Rod and positioning it in the market to a younger demographic. Secondly, HD needs to
position the V-Rod to also appeal to first time buyers of motorcycles. HD's strong brand
identity can help pull in new clients. Third, HD has to set an appropriate marketing mix
that will help attract a younger consumer base. By using the low-end approach, which
involves attracting a young audience to a brand name product with a low price tag
(similar to what Jaguar and BMW have done), HD can expand its popularity to the
domestic and international market.
The product strategy is any decision that helps the company continue to develop new
products around its signature American image and positions the company in the market
as such. The main reason for the introduction of the V-Rod was the need to create a bike
that would appeal to a younger demographic and attain a greater market share for the
company. By using the low-end targeting method (as discussed previously) with the
introduction of the V-Rod, this can be considered HD's first step toward implementing its
strategic and marketing objectives.
As for the pricing strategy, HD must be careful to implement a pricing decision based on
the low-end targeting method. Priced at $17,000 MSRP, HD's V-Rod has the second
highest price tag in the performance cruiser market. Although HD does have a 22% share
of the total market, HD's pricing strategy has three main factors that have influenced how
it has priced the V-Rod: 1) the used motorcycle market, 2) lower priced motorcycles, and
3) HD's inability to keep up with demand4. In order for HD to attain a greater market
share, the company must examine how these three factors will continually play a role in
pricing and adjust accordingly.
The Harley-Davidson Corporation has found multiple ways to implement its promotion
strategy. HD's primary promotional tool since 1983 has been the HOG. The company's
advertisements and commercials are focused around female images. Since 93% of bikers
are males, the HOG advertising campaign has been successful for decades5. HD also uses
another strong promotional campaign through its cafes, located in most dealerships. HD
has also developed an interactive website (www.harley-davidson.com). The website gives
the company the chance to expand its operations online. Finally, HD's most important
promotional tool is the brand image of a truly American product. Such a tool appeals to
the domestic market, and owning a Harley-Davidson bike fits well into supporting the
national feelings of pride for America.
HD's distribution strategy can best be described by its creed found on its website:
"Harley-Davidson's dealer's are the company's life-line to our customers, with a wide
variety of product offerings, dealer's provide knowledge, service, and information to
riders out on the road." The networks of dealers established by HD are placed in areas
that provide access to the largest concentration of potential customers. These dealerships
are used to distribute products, accessories, and merchandise. HD also promotes its
motorcycles through dealerships with marketing programs, shows, and public relation
programs. Demo bikes are also made available at events like Daytona and Sturgis. HD
also has a non-dealer network of mid to high-end department stores like Costco's and
BJ's. These outlets are meant to appeal to the non-enthusiast.
Before the marketing plan and strategy for HD can be introduced, an analysis of the
timing at which the plan is to be implemented, the cost and return of the plan and the
feedback involved in continually improving the product must be done.
The most strategic timing for the plan is at peak buying seasons such as around bike
demo events and seasonal shopping. It is at these times that people are most interested in
new products like the V-Rod and more likely to have the assets to purchase the product.
The cost of implementing the marketing plan is going to be related to the assets involved
in the development and research, as well as the production of the V-Rod and the
promotion/advertising involved in making the V-Rod known to motorcyclists and non-
enthusiasts.
The optimal return that is desired from the implementation of the marketing plan is a
sizeable and profitable share in the performance cruiser market. A substantial share in the
market would be attributed to HD's strategic plan of attracting new 'low-end' buyers. This
group of buyers is a younger demographic compared to HD's traditional consumer base.
Attaining such a group would most certainly guarantee HD future business by attempting
to gain brand loyalty.
The most important aspect of understanding the functionality of the marketing plan is the
feedback involved from the consumer. To comprehend why or why not a certain aspect
of the marketing mix is working, consumers of the product must be allowed to give their
input. Continual and efficient uptake of data from the customer, whether through surveys
or questionnaires or any other technique is critical in order to see whether the marketing
plan implemented is working accordingly as planned.
6.12 process data model of market segmentation
7. CORPORATE GOVERNANCE POLICY- HARLEY DAVIDSON INC
The Company has an investment which is accounted for using the equity method.
Accordingly, the Company’s share of the net earnings (losses) of this entity is included in
consolidated net income.
Eaglemark enters into interest rate cap and swap agreements to reduce the impact of
fluctuations in interest rates on its floating rate debt. Eaglemark’s credit risk is the
amount of uncollected interest related to these agreements. The differential to be paid or
received under these agreements is recognized as an adjustment to interest expense. The
unamortized cost of the interest rate cap agreements is included in other assets. The fair
values of interest rate cap agreements and forward foreign currency contracts are
discussed in Note 12.
RESEARCH AND DEVELOPMENT EXPENSES Research and development
expenses were approximately $53.3 million, $37.7 million, and $27.2 million for 1997,
1996 and 1995, respectively.
EARNINGS PER SHARE In 1997, the Financial Accounting Standards Board issued
SFAS No. 128, “Earnings per Share,” which replaced the calculation of primary and fully
diluted earnings per share with basic and diluted earnings per share. Unlike primary
earnings per share, basic earnings per share exclude any nonvested stock. Diluted
earnings per share are very similar to the previously defined fully diluted earnings per
share. During 1996 and 1995, stock options were not materially dilutive; therefore, the
Company was not required to disclose fully diluted earnings per share. Earnings per share
amounts for all periods presented have been restated to conform to the Statement 128
requirements.
NOTES PAYABLE
As of December 31, 1997, the Company had unsecured lines of credit totaling
approximately $42.7 million, of which approximately $40.8 million remained available
after consideration of outstanding letters of credit. As of December 31, 1996, $2.6 million
of notes payable was included in accrued and other liabilities. There were no outstanding
notes payables at December 31, 1997.
8. PRODUCT LINE
1900’s
1901 William S. Harley, age 21, completes a blueprint drawing
of an engine designed to fit into a bicycle.
190 The six-year-old Harley-Davidson Motor Company introduces its first V-twin
9 powered motorcycle. With a displacement of 49.5 cubic inches, the bike produces
seven horsepower. The image of two cylinders in a 45-degree configuration would
fast become one of the most enduring icons of Harley-Davidson history. Also
available for the first time from the Motor Company are spare parts for motorcycles.
1910’s
1910 The famed "Bar & Shield" logo is used for the first time. It
is trademarked at the U.S. Patent office one year later.
At least seven different first place finishes are captured at
races, endurance contests and hill climbs across America.
All seven winners are riding Harley-Davidson®
motorcycles.
191 The 37 cubic inch opposed twin cylinder Sport model is introduced and gains great
9 popularity overseas. Unique not only for the cylinder configuration, which was
directly opposed and flat, the Sport quickly earns a reputation for being uncommonly
quiet.
1920’s
1920 By 1920, Harley-Davidson is the largest motorcycle
manufacturer in the world. New Harley-Davidson®
motorcycles can be purchased from over 2,000 dealers in 67
countries worldwide.
Leslie "Red" Parkhurst breaks 23 speed records on a
Harley-Davidson 61 cubic inch racing motorcycle. Also, the
"hog" association starts when the racing team's mascot, a
pig, is carried on a victory lap after each race won by the
team.
1925 Gas tanks on all models now have a distinct teardrop shape.
This basic appearance is set for all subsequent Harley-
Davidson motorcycles.
Joe Petrali begins racing for Harley-Davidson. He would
become one of the most successful dirt-track racers for
Harley-Davidson, and one of the most successful racers of
all time.
192 The 45 cubic inch V-twin engine (later to be known as the "flathead") is introduced on
9 the D model. The engine proves to be so reliable that variations of it are available on
Harley-Davidson motorcycles as late as 1973.
1930’s
1930 Bill Davidson, Jr. wins the Jack Pine endurance contest with
997 points of 1,000. All individual class winners are riding
Harley-Davidson® motorcycles.
1937 The first WL models are produced. Joe Petrali sets a new
land speed record of 136.183 mph on a modified Harley-
Davidson 61 cubic inch overhead valve-driven motorcycle. .
The same day, he also breaks the record for 45 cubic inch
engine motorcycles.
1938The Jack Pine Gypsies Motorcycle Club holds the first Black Hills Rally in
Sturgis, SD.
On the 3.2 mile beach course at Daytona, FL, Ben Campanale wins the first
of two consecutive victories at the Daytona 200 on a Harley-Davidson
WLDR.
1940’s
1940 Babe Tancrede is the winner at the Daytona 200, riding a
WLDR model.
1949 Hydraulic front forks first appear on the new Hydra-Glide models.
1950’s
1950 Larry Headrick wins the AMA Grand National
Championship for Harley-Davidson in dirt track racing.
Harley-Davidson riders win 18 of 24 National
Championships and set six new racing records.
1954 Dirt track racer Joe Leonard wins the AMA Grand National
Championship. Over the next eight years, the Grand
National Championship will be won by Harley-Davidson
racers.
1956 The new young star Elvis Presley poses for the cover of the
MayEnthusiast sitting on a 1956 model KH.
1958 The first rear brakes and hydraulic rear suspensions appear on the
Duo-Glide.
Racer Carroll Resweber wins the first of four AMA Grand National
Championships.
1960’s
1963 Ralph White resumes the winning of the Daytona 200 for
Harley-Davidson, again on a 750 KR motorcycle.
1970’s
1970 In consideration of new AMA rules for Class C racing, a
new Sportster®-based motorcycle, the XR-750 racer is
introduced.
On the Bonneville salt flats near Wendover, Utah, racer Cal
Rayborn breaks the world record for land speed set by a
motorcycle. The vehicle is a sixteen foot streamliner
powered by a single Sportster engine, and averages just over
265 mph.
1971 In response to the customizing craze, Harley-Davidson
introduces the FX 1200 Super Glide®, which combined a
sporty front end (similar to that of the XL series) with the
frame and powertrain of the FL series. A new class of
motorcycle, the cruiser, is born.
First year of Harley-Davidson snowmobile production.
1972 The new, more powerful, more reliable aluminum alloy XR-
750 debuts. It becomes the dominant dirt track racer through
the next three decades. Dirt track racer Mark Brelsford wins
the AMA Grand National Championship on the XR-750 this
year.
1980’s
980 Harley-Davidson debuts the FLT with its vibration
dampening, rubber-isolated drivetrain and unique trailing
front fork. The FLT also debutes an engine and five-speed
transmission that are hard bolted together.
A Kevlar belt replaces the chain as the final drive. The belt
is cleaner running, and needs less adjustments and
maintenance. It isn't long before belt final drive is standard
on all Harley-Davidson® motorcycles.
The AMA Grand National Championship in dirt track
racing goes to yet another Harley-Davidson racer, Randy
Goss.
In honor of the historic Sturgis motorcycle rally, Harley-
Davidson releases the FXB Sturgis model, employing belt
drive, black chrome appointments and 80 cubic inch engine.
The FXWG Wide Glide is introduced for the 1980 model
year.
1988The springer front end returns in the FXSTS Springer® Softail®. Also
introduced is the Sportster 1200. Harley-Davidson celebrates its 85th
Anniversary with a Homecoming in Milwaukee, attended by over 60,000
enthusiasts.
The Harley-Davidson Traveling Museum hits the road, displaying
memorabilia, classic Harley-Davidson motorcycles and the rich history of
the Harley-Davidson rider.
Scott Parker wins the first of his nine AMA Grand National Championships.
His total domination is unprecedented in the history of the sport of dirt track
motorcycle racing.
1990’s
1999 The Touring and Dyna motorcycle families receive the new Twin Cam 88®
engine.
2000’s
2004 For the 2004 model year, the Sportster® family models
receive rubber engine mounting, a new frame, and a wider
rear tire. Some Sportster® models receive a redesigned gas
tank.
The FLHRSI Road King® Custom is introduced. With its
low rear suspension and wide handlebars, the FLHRSI
brings a beach look to a classic Harley-Davidson
motorcycle.
Andrew Hines of the Screamin' Eagle®/Vance & Hines
Harley-Davidson drag racing team clinches his first NHRA
Powerade Pro Stock Motorcycle Championship at age 21,
the youngest champion in NHRA history.
2006The first of the 6-speed transmissions are made available on 2006 model
year Dyna™ motorcycles. Also joining the Dyna™ family is the FXDB/I
Street Bob™.
The 2006 model year includes the all-new FLHX/I Street Glide™, a
lower profile touring motorcycle.
Harley-Davidson unveils plans for an all-new museum in Milwaukee,
scheduled for opening in 2008.
Harley-Davidson appoints Beijing Feng Huo Lun (FHL) as the first
authorized Harley-Davidson dealer on mainland China.
9. Risk Management and Risk Factors
Harley-Davidson Inc. is subject to various types of risks that directly affect the growth
and operations of the companies in this sector. The following talks about some major
risks areas in the company.
9.1Currency Risk:
The Company sells its products internationally and in certain markets, it denominates
those sales in the local currency of the foreign country. The Company’s most significant
foreign denominated sales are in the Euro. The Euros exchange rate to the U.S dollars
went up by 18% in 2002. As a result, the Company’s earnings are affected by fluctuations
in the value of the U.S. dollar relative to certain foreign currencies. The Company utilizes
foreign currency contracts to mitigate the effect of these fluctuations on earnings.
The outlook for interest rates has important implications for Harley-Davidson
Financial Services’ earnings. Interest rates influence how much money the HDFS can
make. For this reason, the HDFS is concerned with Federal Reserve policy and its
influence on interest rates. In June 2003, the Fed has cut the federal funds target rate 13
times since January 2001 by a total of 5.5 percentage points to the lowest level in more
than 40 years. HDFS utilizes interest rate swaps to reduce the impact of fluctuations in
interest rates.
9.3Legal Risk:
9.4Economic Risk:
• Unemployment Rate
High unemployment will cause a slowdown in consumer spending, so consumer are less
likely to buy a new motorcycle.
• Consumer Confidence
The confidence report has indicated that there is still a relatively low consumer sentiment,
which may be proof that there is a delay in the up start of consumer and commercial
spending.
9.5Other Risks:
• Terrorism Risk: The September 11, 2001 terrorist attack impacted the company’s retail
activates slowdown in areas around New York City and Washington D.C.
• Operation Risk: Company could experience delays in the operation of manufacturing
facilities as a result of work stoppages, difficulty with suppliers.
• Production Risk: Company could increase the productivity in its facilities to meet the
customer demand or company could sell all of the Harley-Davidson motorcycles it plans
to product.
• Credit Risk: HDFS is engaged in the business of financing and servicing wholesale
inventory receivables and consumer retail installment sales contracts. It would suffer
some loan will default on repayments linked to the obligation.
• Natural causes: A natural disaster (earthquake, hurricane, etc.) which could impact the
company’s factory and retail stores.
10. Investment Decision and Conclusion
However, we believe the stock has some upside potential and is good long-term
investment. No stock in the Graduate Fund is significantly correlated with Harley-
Davison.
11. Strategic Report for Harley Davidson
Although the company actually produced results that were in the upper bound of
its guidance and within the guidance from before April the stock price has yet to recover
to its earlier levels. It seems that Harley Davidson management’s strategy of under
promising and over-delivering has backfired, especially because analysts remain wary of
the company’s prospects despite Harley exceeding their expectations. Another reason for
analysts’ pessimism about Harley Davidson is that recently the company seems to be
resting on its laurels, content with its current market position and doing little to attract
new, younger customers or to offer new motorcycle designs to appeal to previous
customers. One sign of this is that Harley Davidson’s dollar amount spent on advertising
and research and development has actually been decreasing over 4 the past couple of
years. To some it might seem that management is sacrificing the future of the company
by not attracting new riders in order to boost financial performance today.
These bikes are more of a luxury item than a necessity for traveling from point A to point
B. Even though motorcycles may be better through traffic and use less gasoline than a car
a consumer purchasing a motorcycle for these reasons would be more inclined to
purchase a lighter motorcycle, which would be more maneuverable and fuel-efficient
than a heavyweight bike. The most obvious complement for heavyweight motorcycles is
gasoline. If the price of fuel is high then consumers will be less likely to purchase a
heavyweight bike due to the fact that most trips taken on such a motorcycle is largely
discretionary and taken for pleasure rather than through a need for transportation.
However, if consumers are willing to pay between $8 thousand and $25 thousand for a
luxury item like a heavyweight motorcycle then they are probably not troubled by paying
a slightly higher price for gasoline.
Harley Davidson operates nearly every stage of the production of a motorcycle, taking
raw materials such as steel and basic electrical components and shipping completed
motorcycles to its extensive independent dealership network. Because there are many
suppliers of all inputs that Harley Davidson requires for its manufacturing operations
there is very little that any single supplier can do the exact rents from Harley.If one
supplier attempted to increase its profits by charging Harley a higher price it would not
be difficult for Harley to switch suppliers without a significant disruption in production.
Harley-Davidson, also known as HD, has been around for over 100 years, beginning in
1903 in Milwaukee, Wisconsin between two friends. Though William and Walter
Davidson, Arthur Davidson's brothers, would join the project, the original prototype was
conceived by William Harley and Arthur Davidson. Together, their working relationship
founded the HD Company, later this company would grow enough to deserve to be
incorporated, with the help of Walter's skills as a mechanic and William Davidson's
abilities to make tools.
During 1903 Harley-Davidson turned out a grand total of 3 motorcycles, all were bought
and paid for before completion. Gray was the standard color of the first motorcycles,
which were often referred to as the? Silent Gray Fellows?. By 1905, the Company had
grown at such a rate that they were now selling motorcycle motors, marine motors,
reversible propellers, and float feed carburetors along with the standard motorcycles.
The Harley-Davidson company only continued to prosper through the next decade.
Among the biggest fans of the company was the United States Postal service, who in
1914 used 4,800 of the company's bikes but nine departments in total used the company's
products in the federal government in that year. By 1916, the military was in on the act
and they began outfitting their HD's with machine guns in skirmishes with Panch Villa.
The federal government did not ease up on their use of HD during the first World War,
on the contrary, the government purchased fifty percent of all of the HD motorcycles
during this period and shipped them overseas for the military to use.
The sport of racing was the way that HD thrived and prospered in the post-war years of
the 1920s. Unlike many companies during the 1930s, the effects of the Great Depression
were not strong enough to press Harley-Davidson out of business, they continued to
prosper. Repeating their government service in the 1940s, the HD bikes were a valuable
tool during the Second World War.
In the decade of the 1950s, the company began employing more aggressive marketing
strategies and saw increased growth. Once again war broke out, this time in Korea but
unfortunately motorcycles were replaced in popularity with the military with the Jeep.
Harley-Davidson was free to concentrate on its civilian consumers.
The 1960s were a decade of change for the company, as well as the rest of the United
States. Change can be seen through the company's decision to produce the 3-wheeled
golfing cart. By the end of the decade these carts cornered about one third of the United
States market, and were even used oversees. In according to the change theme,
motorcycle accessories became part of the Harley-Davidson family during the 1960s too.
Racing once again became a focus during the 1970s, as Harley-Davidson motorcycles
received advances in technology that allowed them to make great strides in the sport. The
1980s were a decade of great financial change for many companies, and for the HD
Company, this was especially true when they became a private ownership again as the
result of a buyback. The company seemed to show a renewed interest in building better
machines so much so that they won the contract with the California Highway Patrol in
1984, 1985, 1987, 1988 and 1989.
Customized factory motorcycles took center stage during the 1990s, when Harley-
Davidson introduced the FLSTF Fat Boy. The goal of the new bike was to invoke the feel
of past bikes while keeping up to date. The Twenty first century has come and the
company remains strong. The basic line of the company is composed of the Sporster, the
Dyna, the Softail, the VRSC, and a Touring line, each line then diverges into different
models.
12. INCOME TAXES
The provision for income taxes differs from the amount which would be provided by
applying the statutory U.S. corporate income tax rate due to the following items:
Deferred income taxes result from temporary differences between the recognition of
revenues and expenses for financial statements and income tax returns. The principal
components of the Company¹s deferred tax assets and liabilities include the following:
13. COMMITMENTS AND CONTINGENCIES
Since June, 1996, the Company self-insures its product liability losses in the United
States up to $2.5 million ($3.0 million between June, 1995 and June, 1996). Catastrophic
coverage is maintained for individual claims in excess of $2.5 million ($3.0 million
between June, 1995 and June, 1996) up to $25 million. Prior to June, 1995, the Company
was self-insured for all product liability losses in the United States. Outside the United
States, the Company is insured for product liability up to $25 million per individual claim
and in the aggregate. The Company accrues for claim exposures which are probable of
occurrence and can be reasonably estimated.
14. BUSINESS SEGMENTS AND FOREIGN OPERATIONS
The Motorcycles and Related Products (“Motorcycles”) segment consists primarily of the
Company’s wholly-owned subsidiary, H-D Michigan, Inc., and its wholly-owned
subsidiary, Harley-Davidson Motor Company. The Motorcycles segment designs,
manufactures and sells primarily heavyweight (engine displacement of 651+cc) touring
and custom motorcycles and a broad range of related products which include motorcycle
parts and accessories and riding apparel. The Company, which is the only major
American motorcycle manufacturer, has held the largest share of the United States
heavyweight motorcycle market since 1986. The Company holds a smaller market share
in the European market, which is a larger market than the United States, and in the
Japanese market, which is a smaller market than the United States.
The Company early adopted SFAS No. 131, “Disclosures about Segments of an
Enterprise and Related Information,” effective December 31, 1997. Adoption of the
Statement required the Company to change the disclosure of geographic information but
did not require significant changes in the way segments were disclosed.
(1) The results of operations for the majority-owned financial services subsidiary are
included as Operating income from financial services in the statements of operations.
(2) The results of operations for the Transportation Vehicles segment are classified as
discontinued operations in the statements of operations.
(B) GEOGRAPHIC INFORMATION
Included in the consolidated financial statements are the following amounts relating to
geographic locations:
(2) Long-lived assets include all long-term assets except those specifically excluded
under SFAS No. 131 such as deferred income taxes and financial instruments, including
finance receivables
15. Global Ranking
Harley-Davidson
Rank: 380 (Previous rank: 368)
Get quote: HDI
LET'S RIDE!
H-D opened our doors in October of 1982; that makes it the oldest Harley-Davidson
dealer in New Hampshire! H-D’S are also the last second generation local family owned
AND operated Harley-Davidson dealer in New Hampshire. Come and see how local
ownership can make a difference to you.
H-D has the best Customer Satisfaction ratings in the region, and is willing to PROVE it.
It has a full team of PHD & Factory-Trained Technicians, all of whom have graduated
from advanced, off site factory schools within the last year.
16.1 Mission:
CUSTOMERS YES
PRODUCTS & SERVICES YES
MARKETS YES
CONCERN FOR SURVIVAL YES
TECHNOLOGY NO
PHILOSOPHY YES
SELF CONCEPT YES
CONCERN FOR PUBLIC IMAGE YES
CONCERN FOR EMPLOYEES NO
PROPOSED MISSION
To be branded as the best motorcycle available in the world
PROPOSED VISION
The best quality motorcycle, motorcycle products and financial services
will be provided world wide is the commitment of Harley-Davidson. Customer
satisfaction is our motto and the Harley-Davidson customers can experience the taste
of reality of motorcycle dreams by relaying their satisfaction on us. Harley-Davidson
is dedicated to use the advanced technology to produce the most superior motorcycle
in domestic and international markets. Stay competitive and continue growth
worldwide remain profitable and survive is our philosophy. Employees of Harley-
Davidson are the foundation of the company and they are the driving force behind the
Harley-Davidson name. The total team effort of Harley-Davidson employees is
devoted to fulfilling dreams of customers and we believe that there is not a
motorcycle riding experience like a Harley-Davidson’s. Excellence is our push
though our Harley-Davidson bar and shield logo that says superior quality. Honesty
and customer loyalty and these morals are the heartbeat of Harley-Davidson
organization. Harley-Davidson do our part in supporting all environmental laws in
every country we do business. Determination and commitment is the place where
Harley-Davidson intends to stay.
16.2 Vision:
17. ADVERTISEMENTS
Harley-Davidson uses advertising and personnel selling for their promotional mix. The
advertising that Harley-Davidson utilizes nationally are four to five television
commercials a year. These commercials are institutional because they are advertising the
company and not a specific product. They also have institutional advertisements in
national magazines such as Road & Track, Popular Science, and Fortune as well as
specific motorcycle magazines as Easy Rider. Locally, individual Harley-Davidson
dealers advertise on the radio and through direct mail. Harley-Davidson uses personnel
through their 595 dealerships located throughout the United States. A customer has to go
to a dealership in order to purchase a motorcycle. While they are there they are attended
to by sales people that answer any questions they have and help them pick out the
motorcycle they want.
However, they also employ personal selling because it is cost effective to send a
sales rep to the institutional buyer's headquarters due to the possibility of generating
multiple sales at one time.
These print ads were created for Harley Davidson by their advertising agency,
Carmichael Lynch, who also do spectacular work for companies like Porsche, A.G.
Edwards and Northwest Airlines.
The 193 Countries the motorcycle has visited plus some other entities in brackets
Afghanistan , Albania , Algeria , (American Samoa) , Andorra , Angola , Antigua &
Barbuda ,Argentina , Armenia , Australia , Austria , Azerbaijan ,
Oman ,
Qatar ,
(Reunion Island) , Romania , Russia , Rwanda , Samoa , San Marino , Sao Tome &
Principe ,
Uganda ,
Ukraine ,United Arab Emirates , United Kingdom , United States Of
America , Uruguay , Uzbekistan ,
Five Forces
Internal Rivalry.
• Four major competitors are mainly concentrated on these heavyweight motorcycle
segments: in addition to Harley-Davidson the other three are Yamaha, Suzuki,
Honda all are Japanese companies.
• Some of the major competitors of Harley-Davidson have larger financial and
marketing resources and are more diversified (Example: Yamaha, half of its
revenue is only from motorcycles).
• Polaris (American snowmobile/ATV manufacturer) producer of “Victory”
motorcycles priced its motorcycles below the Harley-Davidson motorcycles.
• Strategic alliance between Suzuki and Kawazaki in the areas of product
development, design, engineering, and manufacturing of motorcycles, this
alliance strengthened both companies’ global motorcycle businesses.
• Honda, the main competitor of Harley-Davidson in U.S eat up some market share
of Harley-Davidson.
Potential entrants
• Entry barrier is very high is this segment, because this segment needs a lot of
capital investment and the industry is on a maturity stage, so that there is only
four main competitors.
• The economies of scale are low in this segment, which is the reason why there are
only four major players.
• There is some small scale producers, who are making these custom made motor
cycles but the amount of their production is not at all a threat for Harley-
Davidson, and they are increasing the interest of motorcycles among the general
public.
Substitute products
• Harley-Davidson motorcycles are a luxury vehicle, so that there is only a few
close substitutes for heavy weight motorcycles that could seriously affect the
market.
• Passenger cars, sports bikes, scooter bikes are the main substitutes of Harley-
Davidson motorcycles.
• The people who are thinking of buying a heavy weight motorcycle are not
seriously considering one of these options, scooter, sports bike.
• In India Enfield can pose as a small substitute.
Power of suppliers
• Steel, basic electrical equipments and shipping of final motorcycles are the main
things Harley-Davidson seeks from suppliers.
• Harley-Davidson has a wide span of suppliers, so that if one supplier attempted to
increase the price, they can easily switch to the alternate suppliers without any
problem in production..
Power of Customers
• Consumers of Harley-Davidson motorcycles are individual customers, so that
they can’t seriously affect Harley’s financial position.
• The numbers of dealers around the globe are also less and they are also dependent
to the individual customers, that can’t affect Harley-Davidson’s financial position.
OPPORTUNITIES
The European demand for Harley Davidson is the highest in the international
market and represents the single largest motorcycle market in the world.
Women and younger riders are increasing becoming interested in bikes
The international heavy weight market is growing and is now larger than the U. S.
heavyweight market
Market share increasing in Europe and Asia for the last two years
Increasing demand in US markets for bikes
Customers value quality parts
STRENGTHS
Net income of 2003 was $760mn, its more than 30% as compared to the previous
year 2002.
The standard and performance segments of Harley Davidson make up 70% of the
European heavy weight motorcycle market
Harley-Davidson operates in two segments: Harley-Davidson motorcycles &
related products and HDFS (Harley-Davidson Financial Services).
Harley-Davidson is the only major American heavyweight motorcycle
manufacturer.
Strong brand name.
The HOG (Harley Owners Group), which have a 7,50,000 members world wide is
the industry’s largest company sponsored motorcycle enthusiast organization.
Buell Riders Adventure Group (BRAG) was also formed recent
Customization of the bikes, this is Harley-Davidson’s major revenue maker.
Harley-Davidson have a good marketing division and its divided as dealer
promotions, customer events, magazine and direct-mail advertising, and public
relations.
WEAKNESS
High price
Harley-Davidson has problems in gaining more market share in some European
countries (That’s one of the main markets for Heavyweight motorcycles outside
U.S).
They didn’t yet start its sales in India, one of the biggest markets.
Required production is not met, analyzing the future of Heavyweight motorcycle
market
IFE MATRIX
WEIGHTED
KEY EXTERNAL FACTORS WEIGHT RATING SCORE
STRENGTHS
Net income of 2003 was $760mn, its more than 30%
as compared to the previous year 2002 0.15 3 0.45
The standard and performance segments of Harley
Davidson make up 70% of the European heavy weight
motorcycle market 0.09 3 0.27
Harley-Davidson operates in two segments: Harley-
Davidson motorcycles & related products and HDFS
(Harley-Davidson Financial Services) 0.025 4 0.1
Harley-Davidson is the only major American
heavyweight motorcycle manufacturer 0.1 4 0.4
Strong brand name 0.15 4 0.6
The HOG (Harley Owners Group), which have a
7,50,000 members world wide is the industry’s largest
company sponsored motorcycle enthusiast
organization 0.05 2 0.1
Buell Riders Adventure Group (BRAG) was also
formed recent 0.025 2 0.05
Customization of the bikes, this is Harley-Davidson’s
major revenue maker 0.025 3 0.075
Harley-Davidson have a good marketing division and
its divided as dealer promotions, customer events,
magazine and direct-mail advertising, and public
relations 0.025 2 0.05
WEAKNESS
High price 0.15 2 0.3
Harley-Davidson has problems in gaining more
market share in some European countries (That’s one
of the main markets for Heavyweight motorcycles
outside U.S). 0.06 3 0.18
They didn’t yet start its sales in India, one of the
biggest markets 0.1 3 0.3
Required production is not met, analyzing the future
of Heavyweight motorcycle market 0.05 4 0.2
TOTAL 1 3.075
SPACE Matrix
Environmental
Financial Strength (FS) Stability (ES)
Return on Investment 2 Technological changes -2
Leverage 3 Rate of Inflation -3
Liquidity 4 Demand variability -6
2 Price range of
Working Capital competing products -2
5 Barriers to entry into
Cash Flow market -6
Inventory Turnover 3 Competitive pressure -4
3 Ease of exit from
Earnings per Share market -3
2 Price elasticity of
Price Earnings Ratio demand -2
Risk involved in
business -2
Total 24 Total -30
Competitive Advantage Industry Strength
(CA) (IS)
Market share -1 Growth potential 3
Product quality -1 Financial stability 3
-3 Technological know
Product life cycle how 5
Customer Loyalty -1 Resource utilization 4
Competition's capacity -4 Ease of entry into
utilization market 6
-1 Productivity, capacity
Technological know-how utilization 4
Control over suppliers & -2
distributors
Total -13 Total 25
Average value for FS = 3
Average value for CA = -1.85
Average value for IS = 4.17
Average value for ES = -3.33
Strategies:
STRATEGY: BACKWARD INTEGRATION, FORWARD INTEGRATION,
HORIZONTAL INTEGRATION, MARKET PENETRATION, MARKET
DEVELOPMENT, PRODUCT DEVELOPMENT.
RECOMMENDATION
Expand European and Asian market.
Increase the sales of Buell sport bike and Harley-Davidson to younger customers
and females.
Horizontal diversification: acquires or develops new products that could appeal to
its current customer groups even though those new products may be
technologically unrelated to the existing product lines.
Concentric diversification: Bring in new recreational vehicles.
EVALUATION
REVIEW UNDERLYING BASES OF STRATEGY
Once again prepare all the internal and external analysis (eg: EFE & IFE)
Compare the already prepared analysis with the one which will be prepared after
the new strategy implementation.
MEASURING ORGANIZATION PREFERENCES
Analyze all financial ratios (current and the future).
If any advantage, then implement the new strategy, otherwise continue with the
present one.
19. EXTRA CURRICULAR ACTIVITIES OF HARLEY DAVIDSON
20 Culminations
Harley-Davidson, Inc. operates in two segments: the Motorcycles & Related Products
segment and the Financial Services segment. The Motorcycles & Related Products
(Motorcycles) segment includes the group of companies doing business as Harley-
Davidson Motor Company (Motor Company) and the group of companies doing business
as Buell Motorcycle Company (Buell).
21. References
• Bach, Sharon, & Ostermann, Ken, eds. 1993. The Legend Begins: Harley-
Davidson Motorcycles, 1903–1969 (Harley-Davidson, Inc.)
• Strategic Management Concepts and Cases; Fred R. David, 10th & 12th Edition.
• Mitchel, D. (1997). Harley-Davidson Chronicle - An American Original.
Publications International Limited. ISBN 0-7853-2514-X.
• Wagner, Herbert, 2003. At the Creation: Myth, Reality, and the Origin of the
Harley-Davidson Motorcycle, 1901–1909 (Wisconsin Historical Society Press)
• Wilson, H. "The Encyclopedia of the Motorcycle" Dorling-Kindersley Limited,
1995 ISBN 0 7513 0206 6
• www.harley-davidson.com
• harley-davidson.com/wcm/Content/Pages/2009_Motorcycles/...
• en.wikipedia.org/wiki/Harley_Davidson
• www.motorcycle.com/specs/harley-davidson
• www.harley-davidson-jakarta.com/events/upcoming.php?dt=1225126800
• www.yogeshsarkar.com/blog/2009/06/17/harley-davidson-purse
• www.cubiccapacity.com/harley-davidson-launches-two-new-bikes-for-2009
• money.cnn.com/magazines/fortune/fortune500/2009/snapshots/894.html
• www.harleydavidsonofoceancounty.com
• www.salemharley.com
• www.metacafe.com/watch/1544940/the_2009_harley_davidson_motorcycles
• www.eaglesnestharleydavidson.com/eshoplist_start.htm
• www.evisor.tv/tv/hersteller/harley/filme-15.htm
External links