Operational Restructuring at Harley Davidson

The Harley-Davidson (H-D) motorcycle brand is undoubtedly an American cultural icon, along with brands like Coca-Cola, McDonald's and Marlboro. H-D's motorcycles had become a symbol of individuality and the spirit of freedom and independence, for customers in the US and in various other parts of the world.

Success had not come easily to H-D. In the early 1980s, the company almost went bankrupt on account of severe competition from Japanese motorcycle brands such as Honda, Suzuki and Kawasaki. However, H-D revived its operations by a rigorous, comprehensive restructuring exercise that covered various aspects of its business such as manufacturing, marketing and distribution.

The huge gap between supply and demand resulted in a flourishing black market for H-D motorcycles with each vehicle selling for a much higher price than its list price. Not only the dealers, even customers began cashing in on this opportunity. Many customers on the waiting lists began trading their places on the list to other impatient customers, who were placed further down the list.

The inability to satisfy customer demand because of supply constraints prevented H-D from expanding its operations globally as it had planned. Analysts were quick to point that if such a scenario prevailed for a long period, H-D could find it difficult to sustain its leadership status.