Paper on a Publicly Traded Company (Harley-Davidson, Inc)


The Harley-Davidson Inc is a manufacturing company with its operating headquarters based in Milwaukee, Wisconsin in the United States. It is a recreational facilities manufacturer but it specializes in motor cycles especially for highway cruising or leisure. It is one of the two remaining mass producers of motor cycles in the United States, the other being victory. It produces a variety of motor cycles depending on horse power and the use intended for the cycles. Some of the earlier versions created have been phased out although they are available at the company headquarters gallery. [1] The company has many production plants within the United States as well as around the globe.


The company’s history dates back to 1901 when 21 year old William S. Harley introduced a plan for the manufacture of a small engine that could displace 7.07 cubic inches (116 cc) with four-inch flywheels that could operate on the pedal-bicycle frame. By 1903 the cycle was completed with the help of the Davidson brothers although the cycle did not meet the best standards to undo competition.

The two friends never lost hope and soon after Work begun on a new and improved machine. This first "real" Harley-Davidson motorcycle had a bigger engine of 24.74 cubic inches (405 cc) with 9-3/4 inch flywheels weighing 28 pounds. The machine also had an advanced loop-frame. It was similar to the 1903 Milwaukee Merkel motorcycle. The friends also got help with their new engine from motor engineer Ole Evinrude. Elder brother of Arthur Davidson also lent a hand. By September 1904 the cycle was operational. 1n 1906 the Harley-Davidson built their first production plant where today the company headquarters are located. [2]

Paper on a Publicly Traded Company (Harley-Davidson, Inc)

Company analysis: products

The Harley-Davidson company products are mainly motorcycles. Since the company prefers to reserve its image as American made, it does outsourcing but the final product is assembled in the United States. The products are usually durable consumer goods, although they produce both normal and luxury goods. Normal goods produced include some series that are specifically made for general policing and military expeditions while luxury goods are special bikes made for fun purposes like track racing.

Since inception the company has produced many types of motor cycles but its most protected rights are those of engine types which depend on size and power of the cycle. These have included the light engines, one cylinder engines, two cylinder engines, big twin engines, sport engines and water cooled engines. The classic Harley-Davidson engines are two-cylinder, V-twin engines with the pistons mounted in a 45° "V". The crankshaft has a single pin, and both pistons are connected to this pin through their connecting rods. [3]

The Revolution, Jointly designed and developed with Porsche in Germany and based on the VR1000 Harley-Davidson Super Bike engine, 2002-present, 69 cubic inches (1,131 cc), 60 degree V-twin, liquid cooled is the most current of the above series. [4]

Paper on a Publicly Traded Company (Harley-Davidson, Inc)

Current models:

The current models within the company line or the Modern Harley-branded motorcycles fall into one of five model families: Touring, Softail, Dyna, Sportster and VRSC. Model families are distinguished by the frame, engine, suspension, and other characteristics.

The Sportster: these are predominantly racing motor cycles. They were conceived in 1957 and they are the longest running model family in the company’s lineup. [5]

Dyna: these models utilize the big-twin engine (F), small-diameter telescopic forks similar to those used on the Sportster (X), and the Dyna chassis (D). Therefore, all Dyna models have designations that begin with FXD, e.g. FXDWG (Wide Glide) and FXDL (Low Rider).

Softail: Softail models utilize the big-twin engine (F) and the Softail chassis (ST). [6]

Touring: touring models use Big-Twin engines and large-diameter telescopic forks. The touring family, also known as "dressers", includes three Road King models, and five Glide models offered in various trim. The Road Kings have a "retro cruiser" appearance and most models are equipped with a large clear windshield.

Paper on a Publicly Traded Company (Harley-Davidson, Inc)

VRSC or Revolution: these were introduced in 2001 and they are meant to compete with American and Japanese muscle bikes. These models have set history in the Harley-Davidson family since for the first time in Harley history they incorporate fuel injection, overhead cams, and liquid cooling. [7]

Elasticity of goods and market share:

The responsiveness of consumers to a price change is measured by the product’s price elasticity of demand. Some products are highly responsive to price changes. Modest price changes cause very large changes in the quantity purchased. Economists say that the demand for such products if relatively elastic or simply elastic. For other products Substantial price changes caused only small changes in the amount purchased. The demand for such products is relatively inelastic or simply inelastic. (p. 356)

Harley-Davidson’s products are relatively price elastic. This is due to the fact that there exist a relatively competitive market with close substitutes from companies like Honda and Suzuki. Harley-Davidson has an overall market share of around 22 %( 2002 estimates) but the American market share is as follows:

1. Harley-Davidson 34.8%

2. Honda 23.7%

3. Suzuki 14.6%

4. Kawasaki 13.6%

5. Yamaha 10.0%

6. BMW 2.3%

7. Ducati .9%

8. Moto Guzzi .1%

Paper on a Publicly Traded Company (Harley-Davidson, Inc)

The pie chart below represents this information.

Historically neither Harley nor its Japanese competitors disclose horsepower of their engines or sales figures, however, an industry consultant says the American cruiser market grew nine percent in 1995 and sixteen percent in 1996 to just over 119,000. A new plant was developed in 1998, in Kansas City, Missouri raising capacity to 210,000 motorcycles produced a year by the year 2003. [8]

Marketing strategies:

To improve on market share every company uses its own strategy. But in any industry there are four core elements of marketing strategy. These four elements are strategies that involve the product, pricing, promotion, and distribution. In all these areas the Harley-Davidson has formulated the best mix that suits their company.

This has included large investments in their dealers, moderate pricing, the use of female images to advertise in order to lure in many more female riders since only 7%of riders are females.

Paper on a Publicly Traded Company (Harley-Davidson, Inc)

Labor issues:

Just like in any other industry or market the treatment of workers and worker rights are very crucial. Although the Harley-Davidsons’ have had a good workers profile they have had intermittent negative profiles with their unionisable workers and their unions. The most significant dispute was in early this year where a workers strike led to a two-week disruption of national production.

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. [9] During the period of the strike, the company refused to pay for any portion of the striking employees’ health care.


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. [11 ]

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.

"Like many other unionized manufacturers, Harley-Davidson’s prior labor-management relations can be characterized as usually cordial, but generally adversarial. We made several attempts in the late 1970s and throughout the ’80s to turn this around. But the normal stress of business, coupled with wariness on both sides, always seemed to conspire to upset our initiatives. In the mid-1990s, however, the senior management of Harley-Davidson and the presidents of the two

Paper on a Publicly Traded Company (Harley-Davidson, Inc)

internationals, the IAM and PACE, go together for discussions on how to make a sea change in our relations. The outcome of these important discussions was a formal partnering agreement between Harley-Davidson management and our union leaders, which outlined a way of working together that is mutually beneficial. Partnering has fundamentally changed the way we do business. It’s made Harley-Davidson a better place to work and, in the process, it’s made our business more successful than ever". These were Remarks by Jeffrey Bleustein, Chairman and CEO Harley-Davidson Inc, delivered to the Summit on the 21st Century Workforce, June 20, 2001 MCI Center, Washington, DC.


The Harley –Davidson is a publicly traded at the New York stock exchange. As such the company has defied great odds like surviving the great depression of 1929-1935 as well as stiff competition from Japanese competition. This has however prompted the company to outsource the production of smaller parts to countries like china in order to reduce operational costs.

However since the Harley-Davidson prefers to be labeled the American icon it has reserved the final assembly to be done on American soil.


The official Harley-Davidson Inc website retrieved on 21st May 2007. Available at:

Wagner, Herbert (2003). At the Creation: Myth, Reality, and the Origin of the Harley-Davidson Motorcycle, 1901-1909, Wisconsin Historical Society Press, Wisconsin.

Paper on a Publicly Traded Company (Harley-Davidson, Inc) . _US

[3] .

[4] .

[6] www.wikipeia.orgSoftail :Harley-Davidson_motorcycles

[9] Strike shuts down Harley-Davidson plant, Company suspends production of motorcycles amid contract dispute," U.S. Business, (Associated Press, Feb. 2, 2007)

Paper on a Publicly Traded Company (Harley-Davidson, Inc)

[10] Striking Harley workers take hits in the pocketbook," The York Dispatch (Feb. 12, 2007).

[11] Deal ends Harley-Davidson strike," The Wall Street Journal (2007 The Associated Press)