H-D Strategic Audit Essay Example | Topics and Well Written Essays - 2250 words

H-D Strategic Audit - Essay Example All along the report takes into account the numerical figures of various parties & entities involved with Harley Davidson. It is a matter of simplicity that the prime factor that would govern the success of any motor company such as Harley Davidson would be the quality of the bikes produced. Quality is a single determinant of a company, which is why most major and successful corporations spend so much money in research & development in order to improve the quality of the product. The results of the CAD system at HD (Harley Davidson) can be seen in this regard, with the breakeven achieved by the sales of just 35,000 units in 1986 from the earlier 53,000. This is a major factor for the company's survival during the 80s in that it has succeeded in reducing the number of defects in its products by stepping up development activities. One of the most important factors of any company is the financial assets & liabilities of the company. IF we look at the consolidated figures of HD (Exhibit 5 B), we will find that the while the net identifiable assets of HD have risen by 47%, the corresponding figures for the depreciation and the Capital expenditures has been 35% and 75% respectively within a gap of 2 years in the recent past (between 1999 and 2001). The major cause of concern in this regard is therefore, the rise in the net capital expenditures, which is a point that requires thought.The motorcycle market generally comprises four main segments: Standard Performance Touring Custom. In spite of having these four different types of markets, the company has focused its activities on just two areas namely- touring and custom. Generally, it is expected that a company would like to try its hand out in all possible domains, but what remains surprising is as to why HD has limited to these two sectors over all these years. Custom-built bikes are the dream of any individual- be it young or old. But in spite of this, most companies including HD continue to charge exorbitant amounts for building custom made bikes. The figures are much more significant for HD, which charges around 50% more than its nearest competitors in this sector. This has been the reason for the mere 15% share of the company in this area on a global basis.Though waiting times have reduced drastically, both for the customers as well as the dealers, it has not come to a zero level as of now. This according to industry gurus is one area of HD, where the company should shed its complacent mindset (assuming that the customer will never turn away). The company must therefore, devise strategies to reduce this time gap further, which could eventually lead to higher sales and will enable HD to capture a larger share in the market and enable it to tighten the noose on its competitors.But, in order for HD to be able to make any progress in this regard, it would have to revise and revamp its existing demand & supply chain, with respect to its suppliers of raw materials and components. We sincerely recommend HD not to resort to 'channel stuff' its dealers as the sales are dying sown, and must instead devise alternate strategies. The dealers in this regard concern another problem with the selling of bikes at a premium, with customers having to pay up to $4000-5000 in