Family and Community at Harley-Davidson
- By Kyle James
Harley-Davidson has a storied history and this can be proven by the fact that they survived the Great Depression, two World Wars, the rise of the Japanese motorcycle and near bankruptcy in 1985. Their history dates back to 1903 when Arthur Davidson and William Harley, both in their early 20’s, started building a motorcycle in Davidson’s small backyard shed. After much trial and error the young men succeeded in building a small two horsepower motorcycle that they rode around their hometown of Milwaukee, Wisconsin at speeds up to 25 miles per hour.
The residents of Milwaukee were so fascinated by the machine that Harley and Davidson quickly built and sold three new motorcycles. By 1905, the two young men were establishing a name for themselves by entering and often winning motorcycle races in the Midwest. As time went on they developed into a company building quite powerful motorcycles, and by World War I they had developed and sold 17,000 bikes to the U.S. military.
After World War II, the recreational motorcycle became very popular among ex-GIs. This popularity carried over into the 1950’s with the release of the very popular models like the Hydra-Glide, Sportster, and Duo-Glide. After a bad stint of ownership under American Machine and Foundry Company (AMF) in the 1970s and near bankruptcy in the mid 1980s, Harley-Davidson was able to recover by going back to the basics and creating bikes that met and exceeded their customer’s expectations.
The current successful growth rate that Harley-Davidson is enjoying is due in large part to the company’s position and promotion of the ‘Harley Experience’ and a strong sense of family and community. This is evident by the enormous success of the Harley Owners’ Group which in 1983 had 33,000 registered members and today boosts over 793,000 members.
Market Size and Growth Rate
The motorcycle industry as a whole is currently enjoying twelve straight years of growth. Perhaps an even more incredible number is that 24% more motorcycles were sold in the past four years than were sold in the entire decade of the 1990’s. In 2003, robust demand was reflected in strong new unit sales which topped 996,000, up from 936,000 units in 2002. Overall, revenues in 2004 exceeded $20 billion in consumer sales, including $7.5 billion in retail sales of new units.
This growth trend should continue as the industry is expected to grow by approximately 5% per year through 2007. An increasing income level in emerging markets like China and Southeast Asia are the primary reason for expected industry growth.
Scope of Competitive Rivalry/Number of Rivals
The majority of motorcycle manufacturers are competing on a global scale. The major rivals include Harley-Davidson, Honda, Yamaha, Polaris, Kawasaki, and Suzuki. Rivalry among these companies is built around motorcycle performance, styling, image, reputation, quality service, and price. All of these companies compete globally in Europe, The United States, and Asia.
As economies like China grow and develop, having a presence in these foreign markets is becoming vitally important to companies long term competitive success.
Buyers Needs & Requirements
Harley-Davidson buyers above all want a high quality motorcycle. In the 1970’s, when Harley-Davidson was owned by AMF, their quality had sunk to an all time low. Quality got so bad that loyal Harley owners refused to call the new motorcycles Harleys, instead labeling them AMFs. After a leveraged buyout in 1981, and the removal of AMF executives, new management attended every possible motorcycle event to try and re-establish relationships with their most loyal riders.
At first they were met with disdain, and it was not until they started implementing the loyal Harley owners ideas were they looked upon with favor. Harley management needs to use history and learn from history to make current decisions. In other words, if listening to your loyal buyer’s needs and requirements worked in the past it will continue to work in the future.
True success is then measured by taking your loyal riders ideas and requirements and using them as guidelines, then going one step beyond in order to exceed customer’s expectations. It is obvious when attending a HOG rally that the sense of family and community among Harley owners will win in the end.
Check out the Harley-Davidson website.
© 2005, Kyle James
