Created By:

SHUBHAM
GUPTA
11/16/09 ® Tony Gauvin, UMFK, 2005 1
BBA II SEM
nd
 Brief History of HD
• 1903
– 21-year old William S. Harley and 20-year old Arthur Davidson make available to
the public the first production Harley-Davidson® motorcycle.
 Brief History of HD
• 1918
– Almost half of all Harley-Davidson motorcycles produced are
sold for use by the U.S. military in World War I. At War's end, it
is estimated that the Army used some 20,000 motorcycles in
their efforts, most of which were Harley-Davidsons.
 Brief History of HD
• 1928
– The first Harley-Davidson two cam engine is made available to the public on the
JD series motorcycles. The bike is capable of top speeds between 85 - 100 mph.
 Brief History of HD
• 1941
– America is entered into World War II. Production of civilian motorcycles is almost
entirely suspended in favor of military production. The Service School is
converted back to the Quartermasters School for the training of military
mechanics.
• 1945
– World War II ends, and Harley-Davidson has produced almost 90,000 WLA
models for military use. Wasting no time, production of civilian motorcycles
resumes in November.
 Brief History of HD

• 1969
– Harley-Davidson merges with the American Machine
and Foundry Company (AMF).
 Brief History of HD
• 1986
– The Motor Company is listed on the American Stock Exchange, the first time Harley-
Davidson is publicly traded since 1969, the year of the AMF merger.
• 1987
– Harley-Davidson is listed on the New York Stock Exchange.
 SWOT Analysis
• Strengths
– Net income in 2003 was $760 million, which was 31 percent higher than in 2002.
– The standard and performance segments of Harley Davidson make up 70% of
the European heavy weight motorcycle market.
– Harley Davidson operates in two principal business segments: Motorcycles and
Related Products, and Financial Services.
– Harley Davidson is the only major American motorcycle manufacturer.
– Strong brand name.
– The Harley Owners Group (HOG) is the industry’s largest company sponsored
motorcycle enthusiast organization, which currently has approximately 430,000
members worldwide.
 SWOT Analysis
• Weaknesses
– Harley Davidson does not emphasize price in its product.
– Registrations for the Asia/Pacific market are decreasing.
– Facing ongoing capacity constraints.
– The top Board of Directors for Harley-Davidson are all men.
– Difficult to attract and retain talented employee.
 SWOT Analysis
• Opportunities
– The international heavy weight market is growing and is now larger than
the U. S. heavyweight market
– The European demand for Harley Davidson is the highest in the
international market and represents the single largest motorcycle
market in the world.
– Women and younger riders are increasing becoming interested in bikes.
– Increasing demand in US markets for bikes.
– Customers value quality parts.
 SWOT Analysis
• Threats
– Harleys average buying age is 42 years old and increasing.
– Some competitors of Harley Davidson have larger financial and
marketing resources and they are more diversified.
– Shifts in buyers needs and tastes.
– Costs could become expensive from international importing.
– The Buell division needs to continue to produce a quality
motorcycle under Harley’s brand name.
 Net Worth Analysis
Net Worth Analysis (year-end 2003 in millions)

1. Stockholders’ Equity $2,957 $ 2,957

2. Net income x 5 = $760 x 5 $ 3,800
3. Share price = $45 /EPS = $2.51 x Net Income $760 $ 13,625
4. Number of Shares Outstanding X Share Price = 302 x $45 $ 13,590
Method Average $ 8,493
5 Year Stock Perfromance
 Projected Financials
Current Projected
2004 2005 2006 2007
Domestic Sales $4,106.00 $4,516.60 $4,968.26 $5,465.09
International Sales $909.20 $1,354.98 $1,987.30 $2,732.54
Total $5,015.20 $5,871.58 $6,955.56 $8,197.63

Gross Profit $1,899.50 $2,223.85 $2,634.41 $3,104.84

Operating Expense $710.00 $831.24 $984.70 $1,160.54
G&A $16.60 $19.43 $23.02 $27.13
Financial Service Oper. income $188.60 $220.80 $261.57 $308.28
Operating Income $1,361.50 $1,593.99 $1,888.26 $2,225.45
Other exp -$5.10 -$5.97 -$7.07 -$8.34
EBIT $1,356.40 $1,588.01 $1,881.19 $2,217.11
Interest $23.10 $27.04 $32.04 $37.76
Pretax Income $1,379.50 $1,615.06 $1,913.22 $2,254.87
Net Income $889.80 $1,041.74 $1,234.06 $1,454.43

EPS $3.00 $3.51 $4.16 $4.90

 BIKES OF HD

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 BIKES OF HD

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LOGO OF HD
 HD Today
• Harley-Davidson, manufactures heavyweight custom and touring
motorcycles and related products.
• Also owns Buell Motorcycle (sport and performance motorcycles) and Eagle
mark Financial, a wholesale and retail finance unit.
• Harley is the only major American manufacturer of heavyweight
motorcycles.
– Polaris Victory Motorcycles claims different
• Foreign business is about 18% of sales; R&D, 3.2%.
• Officers & directors own 1.5% of stock.
• Harley-Davidson recorded its 19th consecutive year of record earnings in
2004.
THAN
KYOU