Harley-Davidson Inc (HOG)

History and Background

Harley-Davidson, Inc. was founded in 1903 in Milwaukee, Wisconsin. It began as a small machine shop and grew to become one of the world's leading motorcycle manufacturers. Key milestones include supplying motorcycles to the U.S. military in both World Wars, numerous racing successes, and iconic motorcycle designs that have shaped motorcycle culture.

Core Business Areas

• Motorcycles & Related Products: Designs, manufactures, and sells a range of motorcycles, parts, accessories, and service contracts. This is the core of their revenue.
• Financial Services: Provides wholesale and retail financing, and insurance programs primarily to Harley-Davidson dealers and customers.

Leadership and Structure

The CEO is Joachim (Jochen) Zeitz. The company operates with a functional organizational structure, with key departments including engineering, manufacturing, sales, and marketing, reporting to the executive leadership team.

Key Offerings

• Cruiser Motorcycles: These are Harley-Davidson's signature motorcycles, known for their classic styling and powerful engines. Market share is significant in the cruiser segment. Competitors include Indian Motorcycle (owned by Polaris), Honda, and Yamaha.
• Touring Motorcycles: Designed for long-distance riding, these motorcycles feature comfort and storage capacity. Competitors include BMW Motorrad, Honda, and Indian Motorcycle.
• Parts & Accessories: This includes a wide range of aftermarket parts, accessories, and branded merchandise. Competitors include aftermarket parts suppliers and manufacturers.

Industry Overview

The motorcycle industry is experiencing a shift towards electric vehicles and a greater focus on younger riders. Increased competition from international brands.

Positioning

Harley-Davidson is positioned as a premium brand with a strong heritage and loyal customer base. Its competitive advantages lie in its brand recognition and iconic image.

Total Addressable Market (TAM)

The global motorcycle market is estimated at $200 Billion. Harley-Davidson is strategically positioned in the premium segment, targeting a portion of this TAM.

Key Competitors

• PII
• PSX
• YAMHF
• KTM

Competitive Landscape

Harley-Davidson faces competition from established motorcycle manufacturers and emerging electric motorcycle brands. Its advantages include its brand and dealer network, while its disadvantages include its high price point and aging customer base.

Stacyc

• Year: 2019
• Acquisition Price (USD millions): 16
• Strategic Rationale: Acquired to enter the electric balance bike market for kids, aiming to attract younger riders to the Harley-Davidson brand.

Historical Growth: Harley-Davidson has experienced fluctuating growth in recent years, with sales declining in some markets and growth in others.

Future Projections: Analyst estimates vary, but generally project modest growth driven by electric motorcycles and expansion into new markets.

Recent Initiatives: Recent initiatives include the 'Hardwire' strategic plan, focusing on profitable growth and the development of electric motorcycles (LiveWire).

Harley-Davidson possesses a strong brand and heritage but struggles with an aging demographic. While their strategic shift towards electric vehicles and emerging markets shows promise, intense competition and potential economic downturns pose significant threats. The company's future success depends on effectively executing its new strategic plan and adapting to evolving consumer preferences. Financial performance has been volatile and needs consistent improvement to sustain growth and dividends.

Data Sources:

• Company Filings
• Industry Reports
• Analyst Estimates
• Financial News Outlets

Disclaimers:

This analysis is for informational purposes only and should not be considered investment advice. Market conditions and company performance are subject to change.