Harley-Davidson’s Value Disciplines, Culture & Organizational Change Case Analysis
The Harley-Davidson is undoubtedly one of the most popular manufacturer of motorcycles in the United States and enjoys a commendable share of the market in it area of specialization. However, despite the successful history of this company it has been faced with formidable challenges that had often threatened its bankruptcy. Apparently, the value disciplines that the company had been pursuing have greatly contributed its success (Nolan & Kotha, 2007). However, the company has pursued different value disciplines during its different regimes, that is, before and after the company’s take over by the AMF. Also there had been numerous organizational changes after the leveraged buyout by the company’s leadership from the AMF, which saw the company change from market survival to a market leader in the motorcycle manufacturing sector (Nolan & Kotha, 2007).
Harley-Davidson value disciplines before AMF took over
Prior to the takeover of the Harley-Davidson by AMF, the company was more successful since it pursued various value disciplines that were contrary to after its takeover. For instance, the company embraced the value of product leadership through its participation in motorcycle racing competitions and innovativeness which ensured that new and improved products were constantly released into the market (Nolan & Kotha, 2007).
However, the company pursued an operational excellence value discipline by ensuring that it produced motorcycles that had improved reliability and quality through constant research and development. Moreover, its introduction of more larger and powerful motorcycles ensured that it maintained operational excellence. Additionally, the simple design of the V-twin engine ensured that the owners could tinker with their engines since motorcycle mechanics were nonexistent.
Moreover, the company had adopted an “image and style” marketing strategy which had appealed the creation of customer intimacy as a value discipline pursued by the company. Moreover, this customer intimacy had made the Harley motorcycle an American iconography and was often associated with the American flag as well as the bald eagle thereby improving the brand loyalty especially among the American customers (Nolan & Kotha, 2007). In addition, the Harley-Davidson culture of innovativeness and aggressive marketing perfectly aligned with these value disciplines that were pursued.
Harley-Davidson value disciplines after AMF took over
Apparently, after the Harley-Davidson takeover by the AMF the pursued value disciplines changed hence, this resulted to a change in the overall company performance. For instance, it embarked on the value discipline of value differentiation aimed at producing more motorcycles to different market segments at the expense of quality. This led tom production of substandard products that saw a drastic decrease in the sales and market competitiveness.
Moreover, it also pursued operational competence value discipline aimed at reducing the production cost but without considering the quality of the products. Hence, this resulted to lose of the market to the Japanese competitors (Nolan & Kotha, 2007). Additionally, the company pursued a customer responsive value discipline which was evidenced by the way in which it handled its marketing strategy. Hence, the culture of lack of aggressiveness and innovativeness amicably aligned with the pursued value disciplines.
The Harley-Davidson organizational change on basis of Lewin’s change model
The leveraged buyout that saw Vaughn Beals and the leadership team of the Harley-Davidson took t control was followed by numerous changes. Hence, considering these changes from the perspective of the Lewin’s Change Model there were three main phases involved such as the unfreezing, change/transition and freezing/refreezing. For instance, the unfreezing phase was the realization of the need to change whereby their aim was to survive in the market followed by other organizational changes (Nolan & Kotha, 2007).
The Productivity Triad was the main change in the transition phase which is not an event but a process. Hence, this involved increased employee involvement, the adoption of just-in-time (JIT) inventory system and the statistical operator control (SOC). Also the change in the administration structure saw establishment of a more convenient and time saving management. Additionally, continued innovativeness and new products development in combination with Buell acquisition was also a part of the changes (Nolan & Kotha, 2007). Moreover, the freezing means stabilization after the desired change is achieved. For instance, there was a sigh of relive in 2004 when the company’s annual revenues hit a record of $5 billion while its net income was $890 million.
The Harley Mystique
The Harley-Davidson Mystique was the establishment of the raw power which became the strong selling point of the company motorcycles in its early history. For instance, creation of distinctive feature such as the V-engine and consistent innovativeness which led to continuous designing of appealing motorcycles constituted the greater part of the Harley Mystique. Also the aggressive promotion led to strategic positioning of the Harley-Davidson motorcycles brand. Moreover, the AMF didn’t seem to this powerful reality since it was not interested in pursuing it, thereby hurting the overall performance of the company (Nolan & Kotha, 2007). For example, the AMF contributed in hurting the Harley-Davidson Mystique by prioritizing quantity at the expensive of quality and innovativeness which saw production of low quality motorcycles thereby reducing its market share. Moreover, AMF continued to hurt this mystique by ignoring the power of advertisement.
The Harley-Davidson case is actually one among many other companies that constantly undergo such changes in order to remain viable in the market. Thus, despite the eventual success recorded by the company, the commendable organizational changes are actually responsible for such achievements (Nolan & Kotha, 2007). However, the differences in the value disciplines pursued by the company under various regimes of the company greatly determined its market performance. Moreover, the productivity triad was a phenomenal change embraced to overcome the competition from the Japanese motorcycle manufacturers. Thus, the consisted emphasis on quality and loyalty establishment among its customers has ensured that the company is capable of clinching the market leadership and market competitiveness.
Nolan, R.L. & Kotha, S. (2007). Harley-Davidson: Preparing for the Next Century. Harvard Business School, 1-17.