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 "America's Bike: Harley-Davidson"

Topics: Strategic Leadership -- Willingness to Empower; Stakeholders; Vision Statement; Product Life Cycle; and TQM

Company: Harley-Davidson

Length: 9:30

Chapters: 1, 2, 3, and 5 (See "Key Concept Integration" section for details)

Case: 24 "Transformation at Harley-Davidson"

Teaching Objectives:

  1. To demonstrate how empowering employees can help a firm achieve profitability.
  2. To discuss the concept of stakeholders in an applied setting.
  3. To discuss the appropriateness of Harley's vision statement.
  4. To compare and contrast the stages of the industry life cycle (covered in the text) and the product life cycle (covered in the video).
  5. To discuss TQM as it applies to Harley-Davidson.

Key Concept Integration: 

Key Concept: Chapter

Strategic Leadership

Stakeholders 2

Vision Statement 2

Life Cycle Model 3

TQM 5 

Content:

One of the many decisions manufacturers face is what to do when sales of a product are flat or declining. This video begins by showing the "Product Life Cycle" as applied to motorcycles. It explains that faced with declining sales, Harley-Davidson decided to meet their problem head on . . . and then goes on to show how the firm did so.

Founded in 1903, the company produced only 3 bikes in its first year. By 1993, this sole remaining American manufacturer of motorcycles was producing over 80,000 bikes in its plants in Wisconsin and Pennsylvania. The video shows that this success has come with "bumps in the road." For example, in the late 1960s, Harley merged with AMF and the founding families lost much of their control. The result was a decline in the quality of Harley-Davidson bikes. At the same time, the Japanese motorcycle industry was producing more reliable, easier-to-maintain motorcycles at ½ the price.

In 1981, thirteen managers bought the firm and applied for heavy tariffs against the Japanese bikes. These tariffs were granted. The company then brought about a renewed expansion of the product line and a renewed commitment to quality with an emphasis on teamwork and employee empowerment.

The new vision statement says:

Harley-Davidson is an action-oriented, international company. A leader in its commitment to continuously improve the quality of profitable relationships with all of its stakeholders. Harley-Davidson believes the key to its success is to balance stakeholder interest through the empowerment of its employees to focus on value-added activities.

The video shows details of how the firm implements continuous improvement -- in this case through the reduction of machine set-up time as related to the Harley Sportster. A manager is shown discussing how Harley seeks to create customer satisfaction through innovation and quality control. He also talks about a marketing goal: " . . . becoming the most respected brand in the world." He clearly differentiates most "respected" from most "recognized" brand.

Introductory Exercise:

  1. Prior to showing the video, you might begin by asking students, "Which motorcycle is the most respected brand in the world?" Then ask them, "Which is the most recognized?" Finally, ask them to distinguish between these two terms.
  2. Alternatively, you might ask them for an update on Harley's U.S. and overseas market share as well as other sales and financial data. They can find this on Harley's WWW site (see the "WWW Connection" section at the end of this segment).  

Discussion Questions:

  1. What evidence do you see in the video that Harley-Davidson profited by empowering its employees?
  2. Who are the stakeholders of Harley-Davidson?
  3. Do you believe Harley-Davidson's vision statement is appropriate as it moves toward the next century? What, if any, changes would you make in the statement?
  4. Compare and contrast the stages of the industry life cycle (covered in the text) and the product life cycle (covered in the video). Note: The product life cycle should be familiar to your students from their first course in marketing -- a prerequisite course for most using this text.
  5. How has Harley implemented TQM concepts into its operations?

WWW Connection: 

For many the use of the WWW with this video exercise will provide an interesting dimension. Especially for those who find the allure of a Harley intriguing, a good exercise would be to ask them to research the firm on the Web. Using the Web, ask them to find out more about the company and issues related to the video. One good place for general company information is the Harley-Davidson Web page (http://www.harley-davidson.com/home).

You might ask students to determine 1996 unit sales (118,771) and their 1997 target (130,000 units). The Web site contains a wealth of other financial and company information that would add interest to the class discussion of this video.

The site has additional information about issues related to the video including branches titled: "The Products," "The Experience," and "The Company." At the time this video guide was written, a special section entitled "This Month at Harley-Davidson" included branches to "Check out the 1998 motorcycle line-up -- including the new custom touring Road Glide, the nostalgic Road King Classic and the performance-enhanced Sportster Sport," "The 95th Anniversary Celebration on June 13, 1998," and "Not sure where to ride? We've planned your entire year in the Harley-Davidson Events Section."

Whether you provide students with the above address is a matter of choice. A good compromise might be to suggest that they use a search engine (i.e., Yahoo, Excite, or Infoseek) within their Web browser to search for information about the company.

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