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Review the initial scenario and the Strategic Business Plan presented in Module 1 to make sure that the requirements of the Board and the Part II Strategic Plan are met. In order to meet the requirements of the Board, you will prepare the final Strategic Business Plan—Part II—Strategic Plan to the Executive Board. Ensure your strategic plan is thorough, succinct, and complete.
Your written report should include a title page, table of contents, executive summary, and each of the following sections in an 8- to 12-page report:
Part I: Global Economy & Factors Affecting H-D
Identify H-D’s Motivations &
Motivations for Expansion
Risks in Expansion
How the Internet adds value
Internet Business Models
Competitive Strategies
Leverage E-Business Capabilities
Part II: Corporate Leadership
Develop the following: Current Direction Setting
- Organizational Culture: In addition, evaluate the culture at Harley-Davidson (H-D) and define what attributes you think team members should possess in reaching the business goals set forth by the organization. If you were part of the management team at H-D, what motivational techniques would you implement to make these teams successful?
- Organizational Design: As you have been completing the Strategic Business
Plan, the management at Harley-Davidson has decided to take a team-oriented approach in various departments rather than the traditional, functional structure. Based on your knowledge of different types of teams and their focus, suggest what kinds of team strategies should be applied to each department. Be sure to explain your recommendations in detail. - Leadership Traits
- Ethical Organization Characteristics
Identify elements
Identify missing elements - Learning Organization Characteristics
Identify elements
Identify missing elements
Part III: Strategic Plan Summary
- Conclusions
- Recommendations
- Implementation
Discuss how you will implement your strategic plans, including how teams should be implemented in each department
Develop a brief roadmap for implementation
Identify the primary benchmarks to assess success or failure
Risks
Part IV: Self-Reflection Summary
Self-reflection is the key to good leadership and good management. Reflect on what you have learned in this class and on what you gained from your Bachelor of Science program. Based on your reflections, discuss the following:
- Five or six key “lessons” learned from the textbook and the content that will help you in your career.
- Consider what you have learned throughout this program. Discuss career opportunities that interest you in business.
- Include what you have learned about yourself.
Evaluate how your personal biases and assumptions have affected your work in the past and how you plan to manage them in the future. The final product will be in an MS Word document approximately 8–10 pages in length and utilizing approximately 4–5 scholarly/professional sources. Your document should be written in a clear, concise, and organized manner; demonstrate ethical scholarship in accurate representation and attribution of sources; and display accurate spelling, grammar, and punctuation.
Assignment 1 Grading Criteria Maximum Points Assignment Components -Explain the current global economy, the motivational/risk factors affecting H-D, and their competitive advantage.
-Determine and explain entry strategies for global expansion and recommend Internet approaches for H-D..
-Explain H-D’s current directional setting, organizational culture, and design. -Recommend and explain team strategies for each department.
-Explain H-D’s leadership traits, ethical characteristics, and its learning environment.
-Provide a Strategic Plan Summary to include your conclusions, recommendations, implementation, and risks.
-Identify and explain 5–6 key lessons learned and how they will help you in your current and future career.
-Include an evaluation of your own personal biases and assumptions and how you plan to manage them in the future.
Dess, G., Lumpkin, G., Eisner, A., McNamara, G. (09/2013). Strategic Management: Text and Cases, 7th Edition.
Business Overview
John E. Lasky
Argosy University
Professor deborah shearer
bus499 – M1A3
11 January 2018
VISION AND OVERVIEW PERFORMANCE
“Harley-Davidson, Inc. is an action-oriented, international company, a leader in its commitment to continuously improve our mutually beneficial relationships with stakeholders (customers, suppliers, employees, shareholders, government, and society). Harley-Davidson believes the key to success is to balance stakeholders’ interests through the empowerment of all employees to focus on value-added activities (Johnson, (2003).”
“Harley-Davidson, Inc. is an action-oriented, international company, a leader in its commitment to continuously improve our mutually beneficial relationships with stakeholders (customers, suppliers, employees, shareholders, government, and society). Harley-Davidson believes the key to success is to balance stakeholders’ interests through the empowerment of all employees to focus on value-added activities (Johnson, (2003).”
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ORGANIZATIONAL STRUCTURE AND MANAGEMENT TEAM
Cross-functional teams
Decentralized Decision-Making
Included workers = Happy Workers
”Buy in”
Management team
Matthew S. Levatich: CEO
James A. McCaskin: Vice President
Enrico D’Onofrio: Managing Director
Cross-functional teams brings specialists from multiple skillsets together so they can directly cooperate with one another while simultaneously making design and manufacturing decisions (Bishop, 1999).
Cross-functional teams build every Harley-Davidson motorcycle produced beginning with its conception and design of the motorcycles to their assembly and product launch. The different teams of buyers, suppliers, manufacturing engineers and further still can make their opinion known. The ideal way to achieve this goal of building a great motorcycle is to involve everyone that is responsible for building motorcycles (Brunelli, 1999).
With cross-functional teams, decision-making is decentralized through the use of lateral decision methods, which accelerates the decision-making process because it can cut out the lines of bureaucracy and functional authority, therefore letting more people from all of the affected departments “buy-in” to the end product (Brunelli, 1999).
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BRANDS, PRODUCTS, AND SERVICES
Motorcycles
Seven different models including the trike
Prototype Electric Motorbike “Livewire”
Parts and Accessories
General merchandise
Figure 1 (Chakravarty, 2014)
Products and services offered by the organization revolve around the sale of motor cycles. Below are the various products and services:
Motorcycle sales average around 78% of the company’s sales. Manufactures seven different models of motor cycles which is what they are known for. Many different variations are available from each model such as the street bike, soft tail, sportster, touring, CVO and the trike.
Parts and accessories are also available for modification, upgrading or repairing of motorcycles.
General Merchandise is a big money maker for the company as millions buy t-shirts, key rings, and other collectibles although they may not own a machine themselves.
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CORPORATE GOALS AND OBJECTIVES
long-term strategy through 2027 focuses on five objectives:
Build two million new Harley-Davidson riders in the U.S.;
Grow international business to 50 percent of annual volume;
Launch 100 new, high-impact motorcycles;
Deliver superior return on invested capital for Harley-Davidson Motor Company (S&P 500 top 25%); and
Grow the business without growing its environmental impact (Anderson, 2018).
As stated by CEO Matthew S. Levatich Harley Davidson plans to increase the number of riders globally. Believing that a focused strategy with their dominant brand and commitment to excellence will put the company in position to grow the demand for their products while cultivating the sport (Anderson, 2018).
The company’s long-term strategy through 2027 is focused on five objectives to:
Build two million new Harley-Davidson riders in the U.S.;
Grow international business to 50 percent of annual volume;
Launch 100 new, high-impact motorcycles;
Deliver superior return on invested capital for Harley-Davidson Motor Company (S&P 500 top 25%); and
Grow the business without growing its environmental impact.
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TOTAL REVENUE AND NET PROFIT 2016
Total Revenue 2016 – $5,996,458
Net Income – $692,164
The organization registered a drop in revenues and profits in 2009.
The revenues added up to $4.29 billion compared to $5.58 in 2008 and the net profit was $70.6 million compared to $684.2 million in 2008(Briel & Hall, 2010).
This is 23% drop in revenue and a 90% drop in profits which is drastic.
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REFERENCES
Anderson, Adam. (2018). Harley Davidson Inc., Retrieved from http://subscriber.hoovers.com.libproxy.edmc.edu/H/company360/overview.html?companyId=10706000000000&newsCompanyDuns=102224623
Bishop, S. K. (1999). Cross-functional project teams in functionally aligned organizations. Project Management Journal, 30(3), 6–12.
Brunelli, M. A. (1999). How Harley-Davidson uses cross-functional teams. Purchasing, 127(7), 144-148. Retrieved from https://login.libproxy.edmc.edu/login?url=https://search-proquest-com.libproxy.edmc.edu/docview/214447607?accountid=34899
Chakravarty, M. A. (1999). Image 1 (image file) An electric Harley Davidson Motorcycle is here and its named Project Livewire. Retrieved from http://luxurylaunches.com/transport/harley-davidson-electric-motorcycle-project-livewire.php
Johnson, M. (2003, Aug 24). Even corporate CEOS buy into Harley-Davidson mystique. Knight Ridder Tribune Business News Retrieved from https://login.libproxy.edmc.edu/login?url=https://search-proquest-com.libproxy.edmc.edu/docview/461465335?accountid=34899
SEC, US. (2017, April 18). Form 8-K, Harley Davidson, Inc.. Project Management Journal, 30(3), 6–12.
Brunelli, M. A. (1999). How harley-davidson uses cross-functional teams. Purchasing, 127(7), 144-148. Retrieved from https://login.libproxy.edmc.edu/login?url=https://search-proquest-com.libproxy.edmc.edu/docview/214447607?accountid=34899
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Running head: Harley-Davidson: External and Internal Analysis 1
Harley-Davidson: External and Internal Analysis 2
[Title Here, up to 12 Words, on One to Two Lines]
John E. Lasky
Argosy University
Deborah Shearer
BUS499 – M5A1
19 January, 2018
[Title Here, up to 12 Words, on One to Two Lines]
Table of Content
Executive Summary……………………………………………….……………………….3
Analysis of the External Environment (PART ONE) …………….….………………..…3
Results from Scanning…………………………………….………………………3
Results from Monitoring………………………….………………………………5
Competitive Environment………………………….………………………………5
Strategic Challenges/ Issues facing the Industry………………………………….6
Internal Environment Analysis (PART TWO) ……………………………………………6
SWOT Analysis……………………………………………………………………6
Value Chain Analysis………………………………………………………………8
Strategic Plan Summary……………………………………..……………………………9
Conclusions…………………………………….……………………….….…….10
Recommendations……………………………….……………………….………10
Implementation………………………………………………………….……….10
Risks……………………………………….…………………………….……….10
References………………………………………………………………………..11
Executive Summary
There are several challenges that face business ventures which may be labelled as being generated from an internal or external environment. The motorcycle industry along with Harley-Davidson is not immune from in this paradigm. Firms need to adjust accordingly to these environmental changes for them to continue surviving and thriving. Some of these major external and macro-environmental challenges include technology, demographics, and the economic, socio-cultural, political and legal environments. This paper will look at the company’s external and internal environment.
External Environment Analysis
Results from Scanning
As mentioned above, the motorcycle industry and Harley-Davidson are not exempt. Firms need to adjust accordingly to these environmental changes for them to continue to survive and thrive into the future (Schembri, 2009). Some of these major external and macro-environmental challenges include technology, demographics, and the economic, socio-cultural, political and legal environments.
Results from Monitoring
From a monitoring perspective, the economic system and structure that is prevailing around an organization need to be comprehended for the business to put in place necessary measures aimed at achieving compliance (Schembri, 2009). For instance, the conditions of a boom or recession within the economic systems which may be socialist, capitalist or a mixture of the two.
Competitive Environment
Porter’s Five Forces Model
Porter’s five forces competition model that shape competition include competitive rivalry, bargaining power of suppliers, bargaining power of customers, the threat of new entrants and threat of substitute products and services in the market (Arline, 2015). Competitive rivalry examines and assesses the intensity of rivalry in the market. It is assessed by the number of competitors in business and their strength. Besides competitive rivalry, bargaining power of suppliers is another competitive force. The force determines how much strength and power a business supplier wields over its competitors and encompassing how much control it has over prices (Schembri, 2009). In addition to the bargaining power of suppliers, the bargaining power of consumers is another force which pushes the power of the consumer towards influencing prices and quality of goods and services. Fewer customers wield more power in the market with more sellers as opposed to many customers with few sellers. On top of the bargaining power of customers, the threat of new entrants into the marketplace is another competitive force. It tends to determine the accessibility of the market by new entrants who intend to join the competition. The easier it is for a new entrant to join the market, the greater is the risk of depleting market share and profitability (Arline, 2015). Also consider that the threats of budding substitute goods and services are equally another significant force. This force is assessed as having the possibility of prospective consumers switching loyalty from the current product or service to that of the upcoming competitor. The threat of substitute products and services is gauged by either long term or short-term costs alongside customers leaning towards the change.
Value Net Analysis
H-D’s value net analysis provides strategic insights which have been at the forefront of the company growth. The company has based its strategy on low production based on the demands of the clients. By so doing, H-D has been able to establish itself as a company that produces high-quality products and one that is not controlled by the market forces like its competitors Honda (Schembri, 2009). The company has also based its value on the traditional V-Twin American bikes which have become the darling of most bikers. The strategic move to concentrate on sports motorbikes has also added value to the company.
Dynamics of Competition/ Competitor Analysis
Competition In the industry is very high, and it is based on the technological environment which is a crucial element in the motorcycle industry. The nature of technology applied during production process matter a lot and contributed to success or failure of an organization. Improved latest technology if adopted by a firm raises productivity and minimizes the unit cost of output (Sheth, 1992). Thus, a competitive advantage over its rivals. The H-D Company tried this during the world war period with remarkable results realized. Obsolete technology should be discarded. The demographic trends and patterns contribute immensely to the sale of products in the market. The population size and growth rate and the level of education, affect supply and demand of goods and services.
Strategic Challenges/ Issues Facing the Industry
There are several challenges that face motorcycle industry which can be explained by the PESTEL analysis. The socio-cultural aspect of the external environment also comes in as a major factor to be looked into. Members of the society in an organization’s people and their cultural and social beliefs and practices ought to be put into account so that the business does not violate them (Sheth, 1992). The possible social and cultural implication the business has on the local nationals is very vital. Social responsibility should be a major concern for the organization. In addition to socio-cultural, the political and legal environment also matters. The political philosophies and ideologies in which a business operates contribute to the shaping of its overall operations. The private sector business activities are both controlled by national and international politics and governance (Dyer et al., 2007). For instance, the H-D motorcycle industry capitalized on the uncertain prevailing political environment during world wars to enhance the sale of its motorbikes to the American government. It turned this global calamity into a cash cow.
Internal Environment Analysis (PART TWO)
SWOT Analysis
Strength
Harley Davidson is the current innovation leader in the motorcycle industry.
Strong brand equity and customer loyalty.
Strong and reliable financial position and manufacture high-quality products.
Use of social media to conduct its advertisements which have popularized the company.
Variety of motorbikes offered by the company.
Weaknesses
Strong competition from other motorcycle manufacturing companies which has resulted in limited market share.
Pollution of the environment has become an issue that has to affect the company productions.
Lack of diversification strategy which has reduced company productivity.
Opportunities
The company has an opportunity o invest I emerging markets globally.
The company has a chance given its huge capital to diversify to services and expand its market.
It should embrace a strategy that expands its demographics as a way of expanding area of coverage.
Threats
High level of competition in the industry from other manufacturers of motorbikes.
Government policies that impact the company revenue through taxation.
Low pricing policy by the company competitors
Availability of substitute goods from competitors at low price
Value Chain Analysis
Primary Activities
The company has ventured heavily into the manufacture of high-quality products throughout its different ventures (Dyer et al., 2007). The company’s primary activity is the manufacture of motorbikes and bike parts.
Secondary Activities
Harley Davidson provides services to its estimate customers as its secondary activities. It also provides consultation services and offers financial services to its valued customers.
Resource-Based Analysis
Internal
The company enjoys the high level of internal resources that include financial and human resource. The company has been able to employ highly qualified technicians who manufacture the company products (Dyer et al., 2007). The human resource at the company is highly qualified, and this has been possible because of its high capital and revenue that it realizes from its sales.
External
The company relies on its reliable suppliers and its chain of supply to meet the market demands. The company also has established distributors who ensure that its products are available globally.
Achieving Sustainable Competitive Advantage
Financial Ratio Analysis/ Five-year period
The financial ratio of the company has been steady for the last five years starting from the full financial report released in 2011 to 2016. The table below shows the financial ratio of the company for the last five years.
Strategic Plan Summary
Conclusions
Harley Davidson has been able to achieve its current competitive advantage because f its strategic business plans. The company has employed internationalization policy which has seen the company open different factories in different regions throughout the world. Innovation has also been at the heart of the company which has helped the company to earn competitive advantage and became the industry leader.
Recommendations
From the company analysis, it is recommended that the company embark on the globalization of its manufacturing plants to increase its market share and cement its place in the motorbike industry.
Implementation
The company will be able to implement its strategy in phases since finance is required here to effectively implement its strategic plan of expanding to other regions (Dyer et al., 2007). Globalization is the only strategies that will help the company maintain its place in the motorbike industry. Therefore, the company should implement the globalization strategy in phases to allow time for monitoring and assessment.
Risks
The risks associated with the strategy include over-manufacturing which may result in overstocking (Dyer et al., 2007). The other risk is the political environment of different countries which may affect the company operations.
REFERENCES:
Arline, K. (2015). Porter’s Five Forces: Analyzing the Competition. Retrieved October 16, 2015.
Dyer, Jeff, Paul Godfrey, Robert Jensen, and David Bryce. “Strategic management.” (2007).
Schembri, S. (2009). Reframing brand experience: The experiential meaning of Harley–Davidson. Journal of Business Research, 62(12), 1299-1310.
Sheth, J. N. (1992). Emerging marketing strategies in a changing macroeconomic environment: a commentary. International Marketing Review, 9(1).
