Can Jochen Zeitz Engineer a Turnaround at Harley-Davidson?

Can Jochen Zeitz Engineer a Turnaround at Harley-Davidson?
Case Code: BSTR635
Case Length: 19 Pages
Period: 2020-21
Pub Date: 2022
Teaching Note: Available
Price: Rs.300
Organization : Harley-Davidson
Industry : Automotive
Countries : United States
Themes: Business Level Strategies, Leadership and Change Management
Can Jochen Zeitz Engineer a Turnaround at Harley-Davidson?
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case is about the restructuring strategy adopted by Jochen Zeitz (Zeitz), CEO of the American motorcycle company Harley Davidson (Harley), to revive the motorcycle brand. Harley was founded in 1903 by William S. Harley and the three Davidson brothers Arthur, Walter, and William. Harley operated in two segments – motorcycle and related products and financial services. The motorcycle segment was responsible for manufacturing and selling Harley motorcycles, motorcycle parts, accessories, and related services. The financial services segment provided retail and wholesale financing, insurance, and other programs to Harley dealers and their retail customers.

Harley continued to grow over the years and it constantly introduced new features and designs keeping in mind the ever-growing demand for its motorcycles. It became a market leader in motorcycles and continued to occupy a dominant market share in the US heavyweight motorcycle market. Harley became popular among the baby boomers and its growth continued till the early 2000s. It reached its peak in 2006 when it reported over US$1 billion in profit. The Great Recession (2007-09), however, impacted its sales and the company continued to struggle after that.

In 2015, Harley appointed Matthew Levatich as CEO of the company. Levatich tried to reverse Harley’s slow growth through his “More Roads to Harley-Davidson” strategy that focused on four components –new products, broader access, stronger dealers, and amplification of the brand. However, he failed to arrest the decade-long slump in Harley’s performance and the company continued to lose ground in its core market USA. Harley reported 12 consecutive quarters of sales decline by the fourth quarter of 2020. At this time, Zeitz took over and he came up with The Rewire plan to accelerate the growth of the company. The Rewire plan aimed to eliminate duplication, inefficiencies, and complexity throughout the organization. The Rewire laid the foundation for Harley’s next five-year overhaul plan called The Hardwire. The Hardwire plan targeted long-term profitable growth and enhancing Harley’s position as the most desirable motorcycle brand in the world. There were a lot of expectations from Harley customers, shareholders, and loyalists that Zeitz would revive the motorcycle brand through The Hardwire plan.

Issues

The case is structured to achieve the following teaching objectives:

  • Understand what corporate restructuring is.
  • Evaluate why companies opt for restructuring
  • Examine the concept of core customers and how core customers can be an asset to any organization
  • Examine the challenges faced by Harley in both international and domestic markets.
  • Examine the strategies initiated by successive leaders and their impact on Harley.

Contents

Keywords

Profitable growth; Brand revival; Brand repositioning; Brand innovation and imagination; Cult brand; Core customers; Growing competition; Market share; Reset cost structure; Restructure production facilities; Strategic plan; Turnaround strategy; Revival strategy

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