Harley-Davidson in 2020: Can the Keep Their Engine Roaring? Harley-Davidson (Harley) has been the worldwide leader in super heavyweight on-road motorcycles for decades. Their iconic lifestyle brand is known worldwide for representing values of individuality, independence, adventure, and freedom. Their styling of cruiser and touring style motorcycles, all designed to allow owners to easily customize their bikes as they desire, has maintained a consistency for over 100 years such that their products are easily recognizable on sight - and by their sound. But economic and demographic changes have had a negative impact on Harley's performance over the last decade. There are fewer young people entering the motorcycle market and those who do are far more inclined toward lower cost and higher performance sport bikes. Seeing Harley's success in the 805 and 905, the large Japanese motorcycle brands also launched large cruiser models that have taken signicant market share in this segment. Can Harley reinvent itself in a way to maintain its place as the 'great American motorcycle company' or are they going to become an example of a rm unable to evolve from a dominant position in a declining market segment? Can they escape the trappings of their own past success? Harley design, manufactures, and wholesales heavyweight, V-Twin engine on-road motorcycles. Their largest categories are cruiser and touring models, but their lineup also features sportier performance bikes, new electric models, and even electric bicycles. Each model of is designed with easy end-user customization in mind and thus a wide range of accessories and custom add on parts are also produced and sold. Parts, accessories, and apparel represent over 20% of the film's revenue. Based on Harley's iconic brand logo and associated image, much of the accessories and general merchandise revenue comes via their licensing operations through which thousands of third-party manufacturers contract to pay royalties on the sales of a wide range of clothing, collectibles, and other general merchandise. Protecting and promoting the valuable base of Harley' 5 many product patents and design trademarks is a major activity. Harley is striving to maintain their traditional product category and loyal followers while also innovating and evolving toward a changing future. Recent product development has been focused on electric on-road motorcycles and models featuring sleek, performance designs rather than the traditional super-heavy, large~engine cruiser and touring models. To produce and assemble their products, Harley operates seven manufacturing facilities (four in the US and one each in Thailand, Brazil, India, and Australia). To lower costs and align with lower demand, however, a restructuring of the production network is currently underway. The Kansas City final assembly plant will be consolidated into the York, PA plant and the wheel manufacturing factory in Australia will be closed. Production scheduling and inventory planning are based on a rapid response, exible system to keep inventories low but allow for surges in demand to be met. Just as Harley has a valuable image for the products and lifestyle, the internal culture is also a positive feature. Harley emphasizes a culture of openness, employee involvement, and team-based work and their internal culture and labor relations have been a source of strength and stability. Harley is also known for their longstanding, collaborative relationships with key suppliers and their effective collective bargaining and labor relations (roughly 40% of Harley's 5300 employees are members of a union). Products are sold on a wholesale basis to a global network of nearly 1,500 franchise dealerships (of which 698 are in the US.) Harley has developed arguably the industry's leading dealer development program to raise the standards of retail merchandising, personnel skill and development, and marketing. Through their Harley-Davidson University, they train thousands of retail personnel annually. The consultants and programs offered through their Retail Environments Group promote high quality merchandising (store layout, racking, display, graphics, and inventory rotation) practices across their dealer base. To support dealers' purchases and assist in retail motorcycle sales, Harley-Davidson Financial Services (HFDS) offers revolving inventory nancing to dealers as well as credit and insurance services to purchasers of motorcycles. Although focused intently on the quality of their dealer network, Harley also operates and online store through Harley-Davidson.com. Here customers can shop for and purchase parts, accessories, apparel, and other merchandise. To engage both new riders, Harley operates the Harley-Davidson Rider Academy for training new riders and advancing the skills of others. For loyalists and those seeking the social and active values of the Harley lifestyle, Harley operates the Harley Owners Group (HOG) which organizes rides, rallies, and other events to bring riders from all over the world together to share their experience and love of riding. As an experiential, lifestyle brand, Harley's marketing signicantly leverages event marketing in addition to traditional forms of electron and print marketing. And to support and reach riders traveling without their bikes or those without a bike but wanting to 'test' the lifestyle, Harley has a major relationship with Eagle Rider, the world's largest motorcycle rental and organized tour company. The traditional style of Harley's cruiser and touring bikes is still the core of the brand. The look, the sound, the lifestyle of Harley is a dominant competitive advantage the rm must continue to exploit and preserve. This legacy, over 100 years in the making, is well captured at the firm's Harley-Davidson Museum in Milwaukee, Wisconsin. But times are changing and requiring evolution. In recent years, Harley has invested substantially in efforts at their Product Development and Prototyping Center to upgrade the quality and performance of their engines and gearboxes, to develop all new models including expanding into sport and electric cycles. There is a priority going forward on investment and activity toward the development and launch of more new designs, electric models, and smaller bikes designed for specific foreign markets. Questions about if such changes will enable Harley to be successful well into the iture, however, have and will continue to persist