Case 7Harley‐Davidson, Inc. in 2018*

For us and for our loyal customers, the motorcycles we build aren't just motorcycles. They are living pieces of American history, mystique on two wheels. They are the vehicle with which our riders discover the power, the passion, and the people that define the Harley‐Davidson Experience.

—HARLEY‐DAVIDSON, INC.1

Harley‐Davidson, Inc. was far from being the world's biggest motorcycle manufacturer. In 2017, it sold 241,498 bikes; Honda sold 11.2 million. In relation to the world market for motorcycles of about 132 million bikes—of which Asia accounted for over 80%—Harley's market share was about 0.25%.

Yet, Harley‐Davidson was also one of the world's most famous motorcycle companies. On Interbrand's ranking of the world's most valuable brands, it placed #77 in 2017 with a brand value of $5.7 billion. In 2018, the company would celebrate its 115th birthday. On Labor Day weekend, tens of thousands of Harley riders would descend on Milwaukee WI for five days of festivities. As one enthusiast explained: “It ain't a motorcycle—It's a way of life!”

Harley‐Davidson was also the world's most financially successful motorcycle company. Since its listing on the NYSE in 1986, its revenues had grown 11‐fold, it had earned an average return on equity of 27%, and average annual return to shareholders was 12.8%.

However, since 2008, Harley had experienced headwinds. The financial crisis of 2008–09 had hit it hard and, despite a strong recovery, sales revenues ...

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