Strategic Audit for Harley Davidson (1981)I. CURRENT SITUATION. Current PerformanceLoss of money, market share and relevance in a changing industry with new foreign competitors.• Rigid foreign competitors introducing new designs• HD was too slow in development and unpredictable in reaction• Outdated technologies• Poor quality and poor workmanshipB . Strategic postureI. Mission – “We make dreams come true through motorcycling experiences, providing riders and the general public with an expanding line of motorcycles and branded products and services in select market segments (Harley-Davidson website, p.2).” 2. Objective) “We provide experiences”b) Develop relationships with all stakeholders: customers, employees, investors, suppliers, governments and society.c) Provide a good quality cycle) Employees are both passionate and customers3. Strategiesa) 1981 13 HD executives, including William Davidson (grandson of founder Arthur Davidson), conducted a leveraged buyout of AMF to reacquire HD and avert the company's bankruptcy. for import tariffse) Marketing directly to loyal customer basef) Sponsored Harley Owners' Group (HOG)g) Launched SuperRide to attract new customer baseh) Offered customers a free one-year group membership, publications, receptions, etc. 4. Policiesa) Short-term profits are more important than R&D and retooling b) Strong foreign competition is ignored c) Employees have little or no input into the company d) Very slow R&D; very slow in reacting to the most advanced technological changesII. Strategic ExecutivesA. Board of Directors1. Nine members, seven are outsiders2. Respected Americans, four have been affiliated with the MH since the early 1970s3. Three have specialized marketing experience; four have an international backgroundB. Top management1. Thirteen senior executives who led the leveraged buyout2. All have worked or been affiliated with the MH since the early 1970s3. The goal was to reacquire and restructure the company to avoid bankruptcy.III. External environment (EFAS)A. Social environment1. Economic) Stagflation, or “bottleneck” inflation, since the beginning of the years ’70