In 2007, Harley Davidson was the world’s most profitable motorcycle company. They had just released great earnings and committed to achieve earnings per share growth of 11-17% for each of the next three years. Their CEO of 37 years, James Ziemer, knew this would be an extremely difficult task seeing Harley’s domestic market share recently top off at just under 50%. The domestic market was where Harley’s achieved the most growth over the past 20 years and with it leveling off, where was Harley going to get the 11-17% was the million dollar question. Harley Davidson has built a brand that is more than just the spread eagle on a load rumbling motorcycle, but for those who purchase a Harley they are …show more content…
For each of the preceding problems, there are a few potential solutions to help Harley be successful in its goal of 11-17% earnings per share growth, for the next three years. Potential solutions for problem number 1 include: • Run promotions through Harley’s Financing arm for reduced interest rate financing. • Cut Harley’s profit margins in an attempt to better compete with the lower priced imports. • Advertise the great cost saving advantages of a fuel efficient motorcycle.
Potential solutions for problem number 2 include: • Create a motorcycle which possesses the performance appearance the European riders wants, coupled with a high-end suspension kit for the desired ride. • Remove the Harley name on the motorcycle and make it something more European. • Advertise the European built Harley, specifically for the European rider, in an attempt to remove the American stigma.
Potential solutions for problem number 3 include: • Scale back the number of manufacturing plants. • Create a joint venture with Ford or GM. • Identify some of the key components where the vendor to the company is very profitable and purchase their company (reverse integration).
In generating a decision on which potential solution to implement, the main criteria used in the decision