Production of Quality Goods and Service
Facing Business Challenges at Harley-Davidson
Staying on the Road to Higher Sales
When Japanese manufacturers began selling heavyweight motorcycles in the United States during the early 1970s, Barley-Davidson remained calm. The Milwaukee com-pany controlled 99.7 percent of the market and saw no reason to panic. After all, if your customers love your product so much that they tattoo your logo on their chests, can't you count on their loyalty?
The company was mistaken. The Harley was no longer the superb machine it once had been. It leaked oil, vibrated wildly, and broke down frequently. Harley's older customers patiently rebuilt their motorcycles, but younger riders were not so forgiving. Increasing numbers of them chose the trouble-free, smooth-riding imports, and Harley's U.S. market share eventually tumbled to 23 percent.
During the 1980s, Harley decided to open the throttle on quality production. The company changed its de-sign and manufacturing systems to stress quality and reliability, and it carefully controlled the number of motorcycles produced so that their quality could be main-tained. This turnaround reestablished Harley's worldwide reputation for superior quality. Customers liked the new motorcycles, and sales began to climb.
By the early 1990s, market share had returned to 64 percent, a number that could have been higher if the com-pany hadn't presold its entire output by the middle of every year. With $1.2 billion in sales, Harley's biggest problem now was to make enough motorcycles to keep up with soaring demand in the United States and abroad. Dealers were frustrated because they couldn't give customers what they wanted, As dealer Debra Meyers put it: "People don't understand. Not only can't they have the color they want, they ca