Table of Contents
H-D opts to take on an overall strategic business planning to increase its both internal and external efficiencies. The global economy has opportunities, which are accompanied with economical obstacles. For a company to acquire a certain sustainable future, it has to run under four major strategic pillars, which are the growth, continuous improvement, leadership development and sustainability. When all the four pillars are considered, the company will earn a cutting edge and sustainable future. Focusing on the four strategic pillars, the paper seeks to develop a feasible strategic plan to help H-D in achieving its mission and vision statement. In relation to growth, the paper will explain H-D’s current global economy, how it affects the ability of the company to grow both in term of the revenue collection and general collection scale operation. In terms of the global economy, the paper will identify motivational and risks factors that are likely to affect H-D during its expansion. Additionally, it will discuss the strategy of global expansion, current directional, organizational culture and design settings, along with leadership traits. Finally, the paper will compile the strategic plan summary to recommend, implement, and conclude the suggested targets under the specific initiative.
Global Economy & Factors Affecting H-D
The global economy today is dynamic and can be characterized by the unpredicted economic downturn and intense competition. The economic recession has become a worldwide problem to many companies in different industries, consequently affecting raw material prices. All the negatives elements that paint the global economy are considered as impending risks, which the company is likely to encounter if it considers to expand. On the other hand, the global economy is also characterized with opportunities that can motivate H-D to operate in large economies in terms of scale (Marton, 2010).
Motivations and Risks
H-D has a room for the improvement as the economy provides potential opportunities to exploit. The opportunities act like motivational factors that can drive H-D to expand its operations in terms of the market coverage as well as the range of products and services. In other words, the motivation for the expansion can be presented using the SWOT analysis as opportunities in the market. For instance, there is potentially untapped market in Asia and Europe, and there are real competitors targeting the market. The opportunity is lucrative, and H-D can capture this market segment by opening up subsidiaries in countries such as India, Indonesia, Singapore in Asia as well as Ukraine, Belarus, and Austria in Europe. Another motivating factor is the excellent performance of the new lower CC bikes in the currently obtained markets (Marton, 2010). The new invention has a set of loyal followers, who can attract young customers with ease, and this is a strategy to increase the company’s customer base. Another motivational factor is the availability of the untargeted customers in terms of women and young riders. Women have displayed a passion for bikes, and H-D can customize motorbikes for women and young riders. Additionally, the women's demand for motorbikes has been increasing over the years. For instance, in the year 2004, women recorded 15,000 motorcycles purchases per year. Within a period of 5 years, the sales to women escalated to over 30, 000 per year, and this accounted to 12% of all bakes sales. The opportunity is feasible, since H-D has resources that can facilitate the expansion strategy (Marton, 2010).
Nonetheless, the idea of expansion also faces imminent risks, which can hamper an efficient process of expansion. Risks can be considered as threats in terms of the SWOT analysis, as well. One of the possible risks is a case of the myopic market approach. A myopic market approach is likely to affect H-D brand dominance, unless it considers expanding their market. Another impending risk is the possibility of suffering a competition from both complementary and substitute products. For instance, some competing players, such as Royal Enfield and Indian motorcycles, provide substitute products at lower prices. This is a considerable risk as the potential competitors are located in the targeted market, and they pose a real threat regardless of the quality of their products (Marton, 2010).
Competition is inevitable in any kind industry. H-D has to remain on top among competitors with a definite competitive advantage. The quality has always been the core principle in the H-D's production department. The company plans to continue with the quality production, as this has been the key aspect in the establishment of its brand recognition at the national level. H-D has been able to maintain a series of the quality production to earn a sizeable market share. The company plans to work on improving the motorcycles' durability by introducing a quality control system. In line with the motivation for expansion, H-D can kill two birds with one stone through the product and services variations. The product variation has not only helped the company in expanding its market, but also improved its competitive advantage. Nonetheless, over-depending on motorcycles as a sole product can be dangerous, especially where competitors are availing the same product in the market. The strategy is to come up with motorcycles related products and services with the intention of outdoing all the competitors (United States. Congress. House, 2013).
Additionally, H-D also considers employing an unconventional market strategy known as the crowdsourcing. Through the crowdsourcing, H-D will have an opportunity to involve its employees, customers and external companies to handle the marketing activities. H-D can acquire the external crowdsourcing by reaching out competent to companies, such as Victor & Spoils, whose focus is the abovementioned strategy. Through this partnership, H-D will have its marketing agency expanded, and this will guarantee a collection of marketing ideas from thousands of its followers. When employees, customers and external companies are deployed for crowdsourcing purposes, this tends to boost the H-D’s competitive advantage and continuous growth.
The company had not maximized on the utilization of the Internet platform as far as the e-commerce practice is concerned. Many competitors, such as Vector Motorcycles and Trumph Motorcycles, have ventured to practice e-commerce, and this prompts H-D to apply the similar strategy. Concerning the Internet strategy, H-D plans to develop a mobile application that will be compatible with iOS, Android and Windows for mobile phones. The app will include RSS feeds for advertising purposes (Plant, 2014). With the application, customers will be able to learn the prices, existence, usage, and quality of new products. Additionally, H-D plans to introduce the online transaction, which allows customers to visit the website and make online purchases, while the delivery will be made physical to the customer’s specified address. Through the e-commerce, H-D will be able to reach many customers around the world, since approximately 65% of the world population can access the Internet. The bottom line of this strategy is to tap customers who are fond of the Internet, thus boosting the market size globally (Plant, 2014).
Current Directional Settings
The strategic direction and goals are included in the plan; furthermore, the latter becomes a response to what the customers value the most about the organization. The question of sustainability and Consumers Social Responsibility is considered when analyzing current challenges and opportunities in offering high quality products that meet the environmental conservation measures in the community. The company is aware of the dangers of its products to the environment, and it has to include a possible solution to address this particular issue, since it is a government recommendation. Currently, the H-D production agency intends to take more leadership responsibility in working for the interests of the customer’s environmental welfare. With a fresh approach to its mission, capitalization on its strength and understanding the environment it operates, H-D plans to pursue the following strategic direction (Bryson & Alston, 2015).
- H-D will comprehensively assess the customers’ needs and the market opportunities at large to identify gaps or needed shifts in the production and service delivery.
- The production unit will take the leadership roles and work with the environmental department to minimize environmental impacts of its manufacturing facilities and products.
- The company will conduct a feasibility study on the option of expanding the organization to capitalize on the underlying potential market.
- H-D will consider establishing flexible financial resources to invest in quality products to boost the brand recognition.
The H-D's culture is perceived to be a chopper biker culture. The organization’s culture is characterized by the following peculiar characteristics: first, a bold rebellious attitude, which is associated with bike riders, especially in the United States. Thus, H-D has chosen to operate with this culture. Second, there is the customer’s centrism culture, which insists on considering customers’ tastes and preferences during the production period. This culture is purported to meet customers’ satisfaction. Third, the business value is a vital culture for H-D that guides its employees in making managerial decisions. Over the years, the company has incorporated the suitable values as a part of its organization culture (Sack-Mesher & Ruth, 2011). For instance, creativity, integrity, diversity, accountability, and teamwork are notable values existing in the company’s culture. The values have managed to support business ethics, thereby minimizing possible problems in the long term. Finally, the leadership development has realized sustainability in its organizational culture. H-D encourages the leadership development throughout the organization maintaining the sustainability and consequently improving the H-D’s human resource management for a stable leadership from within the country. The culture defines the employees’ traditions, habits, values, and behaviors that influenced the decision-making process on all organizational levels. Additionally, the culture is in line with the H-D mission and vision, and this is vital for the company’s industry position (Stringham, 2012).
In all the departments, H-D’s employees are expected to work in teams, especially in the production department. In this respect, employees are expected to demonstrate the required traits of a team player. Apart from adhering to the company’s core values, an employee has to be influential, thoughtful, respectful, supportive, and involving in order to fit as a team player. One of the company’s core values is integrity, and this virtue is key as employees are expected to act with an absolute trust and genuine concern of the team. An influential and supportive team player provides an insight aspect to other members to achieve a particular set target. Thoughtful and creative employees are able to come up with the innovative approach that can help in solving a particular problem. Lastly, respect is vital in terms of a team spirit as it ensures the understanding among employees and a smooth operation of activities (Young, 2016).
Additionally, in order to get the best out of the employees, the company has planned to adopt the motivation strategy. Applying the Frederic Herzberg's theory of motivation, the H-D’s human resources department plans to improve the factors for satisfaction and reduce or eliminate factors for dissatisfaction. In regard to the factors of satisfaction, the human resource department plans to introduce the job advancement and enrichment as an opportunity for employees to receive a promotion and a sense of power in their positions respectively. Additionally, the human resource department plans to set a system of the performance appraisal as a way of recognizing and awarding the best performing employees in the team. Concerning the job dissatisfying factors, the HR department will set a number of suitable company policies, offer the improved remuneration packages, fix the working conditions, and boost the employer-employee relationship (Stringham, 2012).
In terms of the intended strategy, the H-D’s organization design is based on the company’s current intention to expand the motorcycle production in the Asian and European markets. The organization's design has to meet the following characteristics: faction-based group, global hierarchy, and centraalization. Concerning the faction-based group, each department will be developed based on the specific business function in the motorcycle manufacturing industry (Young, 2016). The main departments in H-D will include: the CEO office, human resource department, finance department, Motor Company Product & Operations department, Global demand department, communication department and Harley-Davidson foundation department. In terms of the centralization, H-D will use a centralized system to control the ability to command and authorize. For instance, H-D's headquarters will act as the primary control base for all the global operations. With the centralized controlling unit, all direct, immediate, and corresponding matters related to the global business become efficient at the international level. The global hierarchy relates to the centralization concept, whereby the headquarters have the power and authority to control the global operations. The set-up of the global hierarchy results in corporate headquarters of H-D solving various critical concerns that emanate from both local and international motorcycle markets (Young, 2016).
The management plans to abandon the traditional functional structure approaches and adopt a team-oriented one to each department. For instance, in the Motor Company Product & Operations department, H-D ought to use a cross-monitoring strategy to ensure that the assigned employees adhere to the required policies and procedures of the production with the aid of a supervisor. In the communication department, the feedback strategy will be vital to facilitate a constant flow of the information. The human resource department is likely to suffer from barrier, such as the lack of coordination, conflict, and the lack of role clarity. To solve this, the HR department has to employ a team checking and collaboration strategy to enhance the team's orientation, performance and mutual trust. The global demand is the most essential department as it will be responsible for supporting many of the activities recommended in this strategic plan. Therefore, the team in this department is likely to experience barriers such as varying communication, lack of information sharing and complacency due the separate geographical location. In case the debrief advocacy, assertion and cross monitoring will be a suitable solution in terms of the strategy, the department will work harmoniously.
Leadership Traits and Ethical
It is the culture and philosophy of H-D to practise the leadership development, because the management is aware that good leadership bounds to direct the company towards its goals. In relation with the core principles, the company needs leaders who are courageous, thoughtful, and inspirational. Courageous leaders are not scared of pursuing the goals and vision of the organization in the face of considerable obstacles and risks. These kinds of leaders are determined to meet the desired goals, while adhering to the required core values and principles. Thought leaders have the ability to bind the power and collect ideas to realize a change (Sack-Mesher & Ruth, 2011). They also have a tendency of stimulating the innovation and creativity as well as envisioning a new possibility in their followers. This kind of leaders will help the company to compete globally in terms of marketing strategies and ideas both theoretically and practically. Moreover, a leader who is inspirational has the capacity to carry a transformational leadership style as they can promote a change, stir up spirits and motivate followers. These kinds of leaders are much desired in the H-D’s new ventures as they can inspire and encourage employees to work from scratch (Sack-Mesher & Ruth, 2011).
Business ethics is necessary for any type of organization, as it is a legal requirement for businesses to act ethically towards its stakeholders. However, the ethical behavior is needed within the context of the organization, where employees are expected to act according to H-D's core values and principles. The H-D’s position in the industry has triggered a cause of disagreement with the environment conservation department in the question of air pollutions (McDonald, 2014). Motorcycles emit fumes, which are considered as agents of the global warming. The H-D’s corporate social responsibility is to come up with measures to prevent pollutions from motorcycle rides. For instance, the Motor Company Product & Operations department has a strategy of designing electric bicycles to avoid using petrol, and this will prevent the air pollution from fumes. Failure to respond to the corporate social responsibility issues amounts to the breach of business ethics and can result in the legal persecution (McDonald, 2014).
Internally, the management and the workforce have to act ethically in the interest of stakeholders. For instance, the company’s core values demand employees to work with the utmost integrity in all the operations. Customers expect an honest treatment from the company, and this will create a brand loyalty. On the other hand, the H-D's management has a duty to disclose all the necessary information to the shareholders before and after the latter subscribe to the company’s share. Another gesture of the ethical practice is professionalism. It entails the operation of business with the high level of understanding the needs of each stakeholder. Finally, H-D has to produce quality products, and this can be achieved by reviewing the production standards and employing the competent workforce.
Strategic Plan Summary
H-D is not performing poorly in the local market, and its intention to expand their market size is feasible under the suggested recommendation. A recap of the recommendation above, the H-D's external markets analysis exposes both gaps and risks likely to ensue in the event of the market expansion. The gaps are the motivation factors for the expansion, and the H-D's market research team has to identify the untapped market in the Asian and European region. The market analysis needs to be done in order to determine the demand of the product before making the next step. If the market appears lucrative, H-D can make a decision of venturing. Another notable strategy that H-D had overlooked is the use of the Internet platform in relation to the e-commerce. The nature of the market is trending, and the e-commerce is making a substantial impact on the global business. H-D has to create a mobile application and a website, which can allow the online trading.