CASE 19 Harley-Davidson Inc. 2008: THRIVING THROUGH A RECESSION

CASE 19     Harley-Davidson Inc. 2008: THRIVING THROUGH A RECESSION

Patricia A. Ryan and Thomas L. Wheelen
We fulfill dreams through the experience of motorcycling by providing to motorcyclists and to the general public an expanding line of motorcycles, branded

products and services in selected market segments.1
Harley-Davidson Mission Statement
It was a pretty amazing sight, dozens at a time, thousands in a day descending on the Sinclair gas station and Western café in Lusk, Wyoming, on their way to the 2008

Sturgis rally in the blistering heat of early August. Lusk, a town of 1,348 people that lies 147 miles southwest of Sturgis, saw bikers from all walks of life, needing

fuel and small supplies, some with tattoos, some with leather to protect themselves from the winds as they cruised at 60 miles per hour along Highway 18 toward

Sturgis. Some clearly were businessmen on a weeklong reprieve, others were rougher in appearance. The one thing they all had in common was the love of the ride … the

ride of the Harley-Davidson motorcycle.
There were new issues facing Harley-Davidson in their 105th year of operation. Consider the weak dollar, the probability that retail sales would continue a downward

spiral, which in turn would cause excess inventory of high priced motorcycles. Then there was the customer base: the rockers who grew up in the sixties and seventies

are graying and this threatens the growth of Harley-Davidson. As riders approach sixty, it is important for Harley-Davidson to recruit new riders of the younger

generations. Their emphasis on recruiting women has been instrumental in recent years. They were faced with an aging baby boomer population and needed to focus on

growing smaller segments of their business—women bikers and younger bikers, the latter who could not traditionally afford a Harley-Davidson motorbike.
Copyright ©2008 by Professor Patricia A. Ryan of Colorado State University and Thomas L. Wheelen, Wheelen Strategic Audit. This case cannot be reproduced in any form

without the written permission of the copyright holder, Patricia A. Ryan. This case was edited for SMBP-13th Edition. The copyright holder is solely responsible for

the case content. Reprint permission is solely granted to the publisher, Prentice Hall, for the book Strategic Management and Business Policy—13th Edition (and the

International and electronic versions of this book) by the copyright holder, Patricia A. Ryan. Any other publication of the case (translation, any form of electronics

or other media) or sale (any form of partnership) to another publisher will be in violation of copyright law, unless Patricia A. Ryan has granted additional written

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Many things were looking good for the 105-year-old motorcycle manufacturer; however, President and CEO James Ziemer needed to continue the company’s strong growth as

many economists felt the economy was heading into a recession. Harley-Davidson had opened their first dealership in mainland China, and named Beijing FengHuoLun as the

first authorized dealer. A Harley-Davidson museum was due to open in 2008 and sought to attract upwards of 350,000 tourists per year. CEO and President Ziemer worked

his way up the ranks, starting 38 years ago as a freight elevator operator and most recently serving a 14-year stint at CFO, but now at the driver’s seat, he faced a

different set of responsibilities. As noted by one analyst,
There are indications that Harley-Davidson is at a turning point. “It’s a well managed company with still one of the strongest brand names in consumer

products, but I just question whether the company can grow its production 7 to 9 percent in an environment where demand doesn’t seem to be growing at that rate”
Ed Aaron, analyst with BRC Capital Markets2
History3
In 1901, William Harley (age 21), a draftsman, and his friend, Arthur R. Davidson, began experimenting with ideas to design and build their own motorcycles. They were

joined by Arthur’s brothers, William, a machinist, and Walter, a skilled mechanic. The Harley-Davidson Motor Company started in a 10 × 15 foot shed in the Davidson

family’s backyard in Milwaukee, Wisconsin.
In 1903, three motorcycles were built and sold. The production increased to eight in 1904. The company then moved to Juneau Avenue, which is the site of the company’s

present offices. In 1907, the company was incorporated.
Ownership by AMF
In 1969, AMF Inc., a leisure and industrial product conglomerate, acquired Harley-Davidson. The management team expanded production from 15,000 in 1969 to 40,000

motorcycles in 1974. AMF favored short-term profits instead of investing in research and development and retooling. During this time, Japanese competitors continued to

improve the quality of their motorcycles, while Harley-Davidson began to turn out noisy, oil-leaking, heavy vibrating, poorly finished, and hard-to-handle machines.

AMF ignored the Japanese competition. In 1975, Honda Motor Company introduced its “Gold Wing,” which became the standard for large touring motorcycles. Harley-Davidson

had controlled this segment of the market for years. There was a $2,000 price difference between Harley’s top-of-the-line motorcycles and Honda’s comparable Gold Wing.

This caused American buyers of motorcycles to start switching to Japanese motorcycles. The Japanese companies (Suzuki and Yamaha) from this time until the middle 1980s

continued to enter the heavyweight custom market with Harley look-alikes.
During AMF’s ownership of the company, sales of motorcycles were strong, but profits were weak. The company had serious problems with poor quality manufacturing and

strong Japanese competition. In 1981, Vaughn Beals, then head of the Harley Division, and 13 other managers conducted a leveraged buyout of the company for $65

million.
Under New Management
New management installed a Materials As Needed (MAN) system to reduce inventories and stabilize the production schedule. Also, this system forced production to work

with marketing for more accurate forecasts. This led to precise production schedules for each month, allowing only a 10% variance. The company forced its suppliers to

increase their quality in order to reduce customer complaints.
Citicorp, Harley’s main lender, refused to lend any more money in 1985. On New Year’s Eve, four hours before a midnight that would have meant Harley’s demise, the

company inked a deal with Heller Financial that kept its doors open. Seven months later, amid a hot market for new stock, Harley-Davidson went public again. Ziemer,

the CFO puts it more bluntly: “You throw cash at it, try to grow too fast, you’d destroy this thing.”4
During the time Harley-Davidson was a privately held firm, management invested in research and development. Management purchased a Computer-Aided Design (CAD) system

that allowed the company to make changes in the entire product line and still maintain its traditional styling. These investments by management had a quick payoff in

that the break-even point went from 53,000 motorcycles in 1982 to 35,000 in 1986.
During 1993, the company acquired a 49% interest in Buell Motorcycle Company, a manufacturer of sport/performance motorcycles. This investment in Buell offered the

company the possibility of gradually gaining entry into select niches within the performance motorcycle market. In 1998, Harley-Davidson owned most of the stock in

Buell. Buell began distribution of a limited number of Buell motorcycles during 1994 to select Harley-Davidson dealers. Buell sales were:5

Buell’s mission “is to develop and employ innovative technology to enhance ‘the ride’ and give Buell owners a motorcycle experience that no other brand can provide.”

The European sport/performance market was four times larger than its U.S. counterpart. In 2007, there were 804 dealerships that sold Buell bikes dealerships worldwide.

Most of these dealerships were combined Harley-Davidson and Buell dealerships.
In 1995, the company acquired substantially all of the common stock and common stock equivalents of Eaglemark Financial Services, Inc., a company in which it held a

49% interest since 1993. Eaglemark provided credit to leisure product manufacturers, their dealers, and customers in the United States and Canada. The transaction,

valued at $45 million, was accounted for as a step acquisition under the purchase method.
Concentration on Motorcycles
In 1996, the company announced its strategic decision to discontinue the operations of the Transportation Vehicles segment in order to concentrate its financial and

human resources on its core motorcycle business. The Transportation Vehicles segment was composed of the Recreation Vehicles division (Holiday Rambler trailers), the

Commercial Vehicles division (small delivery vehicles), and B & B Molders, a manufacturer of custom or standard tolling and injection-molded plastic pieces. During

1996, the company completed the sale of the Transportation Vehicles segment for an aggregate sales price of approximately $105 million; approximately $100 million in

cash and $5 million in notes and preferred stock.
Internal Makeover and New Products
In 1997, Harley-Davidson created an internal makeover. The unsung hero of Harley-Davidson’s supply-chain makeover was an intense procurement expert named Garry

Berryman, vice president of Materials Management/Product Cost from 1995 to 2003 at Honda. When Berryman joined Harley-Davidson, he found the supply-chain management

neglected. There were nine different purchasing departments operating from different plant locations, fourteen separate sets of representative terms and conditions,

and nearly 4,000 suppliers. Engineers with little or no expertise in supply management were doing the bulk of the buying. To top it off, “the voice of supply

management was buried three layers deep in the corporate hierarchy,” said Berryman.
While at Honda, Berryman studied Japanese keiretsu—huge, vertically integrated companies that foster deep, trusting relationships with suppliers. He wanted to form

similar strategic alliances with Harley’s top suppliers, bringing them into the design and planning process. Berryman felt that new technology and the Internet would

make it easier than ever to form these bonds and collaborate. He made it clear that relationship and strategy should drive applications, not vice versa. As Dave

Cotteleer, the company’s manager of planning and control, explained, “We’re using technology to cut back on communication times and administrative trivia, like invoice

tracking, so we can focus the relationships on more strategic issues. We’re not saying, ‘Here’s a neat piece of technology. Let’s jam it into our model.”6
Also, in the 1990s, Harley-Davidson saw the need to build a motorcycle to appeal to the younger and international markets who preferred sleeker, faster bikes. Harley-

Davidson spent an undisclosed amount of research and development dollars over several years to develop the $17,000 V-Rod motorcycle. The V-Rod, introduced in 2001, had

110 horsepower, nearly double that of the standard Harley Bike. The V-Rod was the quickest and fastest production model the company had ever built, capable of reaching

60 miles an hour in 3.5 seconds and 100 mph in a little over 8 seconds. Its top speed is about 140 mph. All in all, the V-Rod was faster and handled better than the

traditional bulky Harley bikes.
All other Harley models are powered by 45-degree V-twin air-cooled engines with camshafts in the block; the new V-Rod has a 1,130-cc 60-degree engine with double

overhead cams and four values for each cylinder. The V-Rod has a very long 67.5-inch wheelbase, and it handles better than other Harleys because it is so much lighter.

Furthermore, the V-Rod is only 26 inches off the ground, so it will accommodate a wide range of rides.7 Harley-Davidson hoped to gain some of the younger markets with

this new bike.
In 2000, a new Softail model was introduced and all Softail models were outfitted with the twin Cam 88B engine. Fuel injection was introduced for the Softails in 2001

and in 2000; Buell introduced the Buell Blast, which was a single-cylinder bike. Along with the Buell Blast, Harley-Davidson introduced a new beginner rider’s course

aimed at the first time Harley owner and rider. The course was offered in Harley-Davidson and Buell dealerships. The VRSCA V-Rod in 2002 was the first Harley bike to

combine fuel injection, overhead cams, and liquid cooling along with new 115 horsepower.
In an attempt to gain further female support, Harley-Davidson announced the introduction of 17-year-old Jennifer Snyder, a champion dirt bike racer as the newest

member of the Harley-Davidson racing team. Female racers were starting to enter this predominantly male sport and Harley-Davidson would not miss this opportunity to

challenge market perceptions of a Harley-Davidson rider.
In 2003, Harley-Davidson introduced the Lightning XBS9. In 2004, the Sportsters were refitted with rubber engine mounting, a new frame and a wider rear tire. The

FLHRSI Road King was introduced with low rear suspension and wide handlebars for a beach appearance. In 2005, the XL 883 Sportster 883 Low, featuring a lowered seating

position aimed at aging baby boomers, was added to the Sportster line. The FLSTNI Softail Deluxe was added to the Softail line with a new sleek appearance reminiscent

of the 1939 Harley-Davidson bike. In the same year, the FLSTSC/I Softail Springer-Classic revived the late 1940s bike in appearance.
In 2006, the Dyna motorcycle line was developed with the first 6-speed transmission. The new FLHX/I Street Glide was introduced as a lower profile touring bike.

Scheduled for opening in 2008 was the Harley-Davidson museum in Milwaukee, Wisconsin. In the area of international development, the first dealership was opened in

mainland China. In 2008, the company introduced four new bikes aimed at two markets—aging baby boomers and the growing female market.
Corporate Governance
Board of Directors
The Board of Directors consisted of 11 members, of which only two were internal members—James L. Ziemer, President and Chief Executive Officer (CEO), and Thomas E.

Bergman, the Chief Financial Officer. Exhibit 1 highlights board members in 2008.
The Board of Directors serve three-year staggered terms. Each of the nine non-employee directors are compensated $100,000 per year. At least half of this amount is to

be paid in common stock.
Since 2005, the board has authorized a stock repurchase. In 2007, 2006, and 2005, the Company repurchased 20.4 million, 19.3 million, and 21.4 million shares of its

common stock at weighted-average prices of $56, $55, and $49, respectively. As of February 2008, all of the 20 million shares authorized in 2007 remained to be

repurchased. Each of the prior two years authorizations were fully repurchased by the end of the next year.
Top Management
James C. Ziemer started with Harley-Davidson 38 years ago as a freight elevator operator and served as the CFO from 1991 to 2005. In 2005, upon the retirement of

Harley veteran Jeffrey Bluestein, Ziemer assumed the top role of President and CEO. He commented, “Harley-Davidson is strong and well-positioned for the road

ahead.”8Ziemer further commented:
I believe there are three constants in our success as a company: 1. Our passion for this business, for riding, and for relating to and being one with our

customers; 2.Our sense of purpose—in other words, our focus on growing demand by offering great products and unique experiences; and 3. Operational Excellence—which is

the continuous, relentless drive to eliminate waste in all aspects of our operations and to run Harley-Davidson better and more efficiently with each passing day. And

I believe these three things—being close to our customers, growth and Operational Excellence—hold the keys to the future.9
Exhibit 2 shows the corporate officers for Harley-Davidson and its business segments—motor company leadership, Buell leadership, and financial services leadership.
Through 2006, Harley-Davidson received positive attention from the popular press in terms of rankings. In 2006, Business Week/Interbrand Annual Rankings Top 100 Global

Brands placed Harley-Davidson at #45, up 1 from 2005. Fortune also placed Harley-Davidson in its 2004 list of “Most Admired Companies.”10 Previously, Forbes named

Harley Davidson its “Company of the Year” for 2001. Harley-Davidson did not make Fortune’s list in 2008.
In 2007, Harley-Davidson experienced its first decline in 20 years. Motorcycle revenue was down 1.27% over 2006, total revenue was down 0.69% and, perhaps most

importantly, operating income suffered a 10.74% decline. Harley-Davidson, which had fought back from near demise in the 1980s was to face new rivals in the competitive

market, an aging customer base, and the recession. Given the recession in 2008, what did the future hold for Harley-Davidson? These were issues management wrestled

with as they planned for the future. One possible solution was to gain new, younger customers as the future as their current customers aged.
EXHIBIT 1     Board of Directors: Harley-Davidson Inc.
Barry K. Allen, President, Allen Enterprises, LLC Barry has been a member of the Board since 1992. His distinguished business career has taken him from the

telecommunications industry to leading a medical equipment and systems business and back again. Barry’s diverse experience has been particularly valuable to the Board

in the areas of marketing and organization transformation.
Richard I. Beattie, Chairman of the Executive Committee, Simpson Thacher& Bartlett Dick has been a valued advisor to Harley-Davidson for nearly 20 years. His

contributions evolved and grew with the company over time. In the early 1980s, he provided legal and strategic counsel to the 13 leaders who purchased Harley-Davidson

from AMF, taking it back to private ownership. He also advised the team when it was time to take the company public again in 1986. Dick was elected to the Board in

1996.
Jeffrey L. Bleustein, Chairman of the Board, Harley-Davidson, Inc.
Jeff began his association with Harley-Davidson in 1975 when he was asked to oversee the engineering group. During his tenure as Vice President-Engineering, Harley-

Davidson developed the Evolution engine and established the foundations of our current line of cruiser and touring motorcycles. Jeff has demonstrated creativity and

vision across a wide range of senior leadership roles. In 1996, he was elected to the Board, and in June 1997, appointed CEO until his retirement in 2005. He remains

on as Chairman of the Board.
George H. Conrades, Executive Chairman of Akamai Technologies, Inc.
George has served as a director since 2002 and brings with him extensive experience in e-business. Akamai Technologies is a provider of secure, outsourced e-business

infrastructure services and software. He is also a partner with Polaris venture Partners, an early-stage investment company.
Judson C. Green, President and CEO, NAVTEQ Corporation NAVTEQ is a leading provider of comprehensive digital map information for automotive navigation systems, mobile

navigation devices and Internet-based mapping applications. Judson has served as a director since 2004.
Donald A. James, Vice Chairman and Chief Executive Officer, Fred Deeley Imports, Inc.
Don’s wisdom and knowledge of the motorcycle industry has guided the Board since 1991. As a 31-year veteran of Harley-Davidson’s exclusive distributor in Canada, he

has a strong sense for our core products. Don has a particularly keen understanding of the retrial issues involved with motorcycles and related products and the

competitive advantage inherent in strong, long-lasting dealer relationships.
Sara L. Levinson, ChairMom and Chief Executive Officer, ClubMom, Inc.
Sara joined the Board in 1996. She understands the value and power of strong brands, and her current senior leadership role in marketing and licensing, together with

her previous experience at MTV, give her solid insights into the entertainment industries and younger customer segments.
George L. Miles, Jr., President and CEO, WQED Multimedia George has been a director since 2002 and currently serves as president and CEO of WQED Multimedia, the public

broadcaster for southwestern Pennsylvania.
James A. Norling, Executive Vice President, Motorola, Inc.; President, Personal Communications Sector, retired Jim has been a Board member since 1993. His career with

Motorola has included extensive senior leadership assignments in Europe, the Middle East, and Africa, and he has generously shared his international experience and

understanding of technological change to benefit Harley-Davidson.
James L. Zeimer, President and CEO, Harley Davidson, Inc.
Jim has been with Harley-Davidson for over 38 years and served as CFO until 2005 when he assumed the role of CEO upon Jeff Bluestein’s retirement. He has been a

director since 2004.
JochenZeitz, Chief Executive Officer and Chairman of the Board, Puma AG.
Mr. Zeitz was elected to the Board in August 2007 when the size of the Board grew from 10 to 11 members. Mr. Zeitz will serve as a Class II director with a term

expiring at the Company’s 2008 annual meeting of shareholders.
SOURCE: Harley Davidson, Inc., 2007 Form 10-K, page 99.
Exhibit 2
1. Corporate Officers, Harley-Davidson, Inc.
James L. Ziemer
President and Chief Executive Officer
Thomas E. Bergmann
Executive Vice President, and Chief Financial Officer
Gail A. Lione
Vice President, General Counsel and Secretary
James M. Brostowitz
Vice President, Treasure, and Chief Accounting Officer
2. Motor Company Leadership
Joanne M. Bischmann
Vice President, Marketing
David P. Bozeman
General Manager, Powertrain Operations
James M. Brostowitz
Vice President and Treasurer
Leroy Coleman
Vice President, Advanced Operations
Rodney J. Copes
Vice President and General Manager, Powertrain Operations
William B. Dannehl
Vice President, North American Sales and Dealers Services
William G. Davidson
Vice President and Chief Styling Officer
Karl M. Eberle
Vice President and General Manager, Kansas City Operations
Robert S. Farchione
General Manager, Parts and Accessories
Fred C. Gates
General Manager, York Operations
James E. Haney
Vice President and Chief Information Officer
Michael P. Heerhold
General Manager, Tomahawk
Timothy K. Hoelter
Vice President, Government Affairs
Ronald M. Hutchinson
Vice President, New Business
Michael D. Keefe
Vice President and Director, Harley Owners Group®
Kathleen A. Lawler
Vice President, Communications
Lara L. Lee
Vice President, Enthusiast Services
Matthew S. Levatich
Vice President, Materials Management
Gail A. Lione
Vice President and General Counsel
James A. McCaslin
President and Chief Operating Officer
Jeffrey A. Merten
Managing Director, Asia Pacific and Latin America
Louis N. Netz
Vice President and Director, Styling
John A. Olin
Vice President, Controller
Steven R. Phillips
Vice President, Quality, Reliability and Technical Services
Harold A. Scott
Vice President, Human Resources
Patrick Smith
General Manager, General Merchandise
W. Kenneth Sutton, Jr.
Vice President, Engineering
Michael van der Sande
Managing Director, HD Europe
Jerry G. Wilke
Vice President, Customer Relationships and Product Planning
3. Harley-Davidson Financial Services Leadership
Lawrence G. Hund
Vice President, Operations and Chief Financial Officer
Kathryn H. Marczak
Vice President, Chief Credit and Administrative Officer
Saiyid T. Naqvi
President
4. Buell Motorcycle Company Leadership
Erik F. Buell
Chairman and Chief Technical Officer
Jon R. Flickinger
President and Chief Operating Officer
SOURCE: Harley Davidson, Inc., 2006 Annual Report, p. 32.
Harley Owners Group (H.O.G)
A special kind of camaraderie marked the Harley Owners Group rallies and other motorcycle events. At events and rallies around the world, members of the H.O.G. came

together for fun, adventure, and a love of their machines and the open road. As the largest motorcycle club in the world, H.O.G. offered customers organized

opportunities to ride their famed bikes. H.O.G. rallies visibly promote the Harley-Davidson experience to potential new customers and strengthened the relationships

among members, dealers, and Harley-Davidson employees.
William G. Davidson, grandson of the co-founder, biker to the core, known to all as Willie G., says, “There’s a lot of beaners, but they’re out on the motorcycles,

which is a beautiful thing.” He noted that he recently co-led a national rally of Canadian HOG groups with Harley’s Chairman Jeff Bleustein.11
In 1995, the Buell Riders Adventure Group (BRAG) was created to bring Buell motorcycle enthusiasts together and to share their on-road experiences. Harley-Davidson

plans to grow both organizations with new members and chapters in the years to come.
Exhibit 3 provides a profile of H.O.G and BRAG clubs. In 2007, H.O.G. membership grew to over 1,000,000 strong, making it the largest factory-sponsored motorcycle club

in the world. The newer BRAG club for Buell riders numbered 11,000 members.

EXHIBIT 3     2007 Profile of the HOG and BRAG: Harley-Davidson Inc.

SOURCE: Harley-Davidson, Inc, http://www.harley-davidson.com.
(Hunger 19-8-19-9)
Hunger, Thomas L. Wheelen and J. D. Strategic Management and Business Policy: Toward Global Sustainability for National University, 13th Edition. Pearson Learning

Solutions.VitalBook file.
The Harley-Davidson Museum
In June 2006, Harley-Davidson began construction of a 130,000 square foot museum. The museum houses a collection of motorcycles and historical mementos from the

company’s 105-year history. It was anticipated there will be over 350,000 visitors each year to the Milwaukee museum with an anticipated opening in summer 2008.
“With over one hundred years and millions of motorcycles behind us, Harley-Davidson has a rich history, and exciting present, and a vibrant future. In the years to

come, the Harley-Davidson Museum will be a centerpiece of the Harley-Davidson experience.” said CEO Ziemer.12
Domestic and Foreign Distribution13
United States
Domestically, Harley-Davidson sold its motorcycles and related products at wholesale to a network of approximately 684 independently-owned full-service Harley-Davidson

dealerships. Included in this figure were 307 combined Harley-Davidson and Buell dealerships. In 2007, in partial response to a dismissed lawsuit alleging improper

allocation of motorcycles, Harley-Davidson implemented a new U.S. motorcycle distribution system to better align demand with supply of bikes.
With respect to sales of new motorcycles, approximately 80% of the U.S. dealerships sold the Harley-Davidson motorcycles exclusively. Independent dealers also sold a

smaller portion of parts and accessories, general merchandise, and licensed products through “non-traditional” retail outlets. The “non-traditional” outlets, which

serve as extensions of the main dealerships, consist of Secondary Retail Locations (SRLs), Alternate Retail Outlets (AROs), and Seasonal Retail Outlets (SROs).

Secondary retail locations are satellites of the main dealership and were developed to meet the service needs of the company’s riding customers. They also provided

parts and accessories, general merchandise, and licensed products and were authorized to sell and service new motorcycles. Alternate retail outlets, located primarily

in high-traffic locations such as malls, airports, or popular vacation destinations, focus on selling general merchandise and licensed products. Seasonal retail

outlets, located in similar high-traffic areas, operate on a seasonal basis. There were approximately 104 SRLs, 68 AROs, and 12 SROs in the United States.
Foreign Operations
Revenue from the sale of motorcycles and related products to independent dealers and distributors located outside of the United States was approximately $1.52 billion,

$1.18 billion, and $1.04 billion, or approximately 27%, 20%, and 19% of net revenue of the Motorcycles segment during 2007, 2006, and 2005, respectively.
Europe/Middle East/Africa
At the end of 2007, there were 370 independent Harley-Davidson dealerships serving 32 European country markets. This included 323 combined Harley-Davidson and Buell

dealerships. Buell was further represented by four dealerships that did not sell Harley-Davidson motorcycles. Harley-Davidson planned to open a new sales office in

South Africa in 2008.
Asia-Pacific
In the Asia/Pacific region, Harley-Davidson sold motorcycles and related products at wholesale to independent dealers and distributors. In Japan, sales, marketing, and

distribution of product are managed from its subsidiary in Tokyo, which sold motorcycles and related products through 130 independent Harley-Davidson dealers. Fifty-

seven of these dealers sell both Harleys and Buells. Three dealerships sold only Buell Bikes.
In Australia and New Zealand, the distribution of Harley-Davidson products was managed by independent distributors that purchased directly from the Harley-Davidson’s

U.S. operation. In 2007, the Harley-Davidson’s subsidiary in Sydney, Australia managed the sales, marketing, and distribution in that region. The Australia/New Zealand

market was served at retail by a network of 49 independent Harley-Davidson dealerships, including 32 that sold both Harley-Davidson and Buell products.
Latin America
In Latin America, Harley-Davidson sold motorcycles and related products at wholesale to independent dealers. Harley-Davidson supplied all products sold in the Latin

America region directly to independent dealers from its U.S. operations, with the exception of certain motorcycles sold in Brazil which are assembled and distributed

by the Company’s subsidiary in Manaus, Brazil.
In Latin America, 12 countries were served by 31 independent dealers. Brazil was the company’s largest market in Latin America and was served by 10 dealers. Mexico,

the region’s second largest market had 11 dealers. In the remaining Latin American countries, there were 10 dealers.
Canada
In Canada, Harley-Davidson sold its motorcycles and related products at wholesale to a single independent distributor, Deeley Harley-Davidson Canada/Fred Deeley

Imports Ltd. In Canada, there were 75 independent Harley-Davidson dealerships. In Canada, 45 of the 74 dealerships sell both Harley-Davidson and Buell products.
Business Segments
Harley-Davidson operates in two principal business segments: Motorcycles and Related Products (Motorcycles) and Financial Services. Exhibit 4 provides financial

information on the company’s two business segments.
Motorcycles and Related Products Segment
The primary business of the Motorcycles segment is to design, manufacture, and sell premium motorcycles for the heavyweight market. They are best known for Harley-

Davidson motorcycle products, but also offer a line of motorcycles and related products under the Buell brand name. Sales from the company’s Motorcycle segment

generated 93.2%, 93.8%, and 94.2% of the total sales during 2007, 2006, and 2005, respectively; with the remainder coming from the Financial Services segment.
The majority of the Harley-Davidson branded motorcycle products emphasizes traditional styling, design simplicity, durability, ease of service, and evolutionary

change. Harley’s appeal straddles class boundaries, stirring the hearts of grease monkeys and corporate titans alike. Malcolm Forbes, the late owner of Forbes

magazine, was pivotal in introducing Harleys to the business elite in the early 1980s.14

Based on data from the Motorcycle Industry Council owner survey, nearly 1 out of every 10 motorcycle owners is female15 The average U.S. Harley-Davidson motorcycle

purchaser is a married male in his late-forties, with a household income of approximately $81,300, who purchases a motorcycle for recreational purposes rather than to

provide transportation and is an experienced motorcycle rider. Over two-thirds of the firm’s U.S. sales of Harley-Davidson motorcycles are to buyers with at least one

year of education beyond high school, and 31% of the buyers have college degrees. (See Exhibit 5.)
In an effort to grow and recognize the importance of female riders to Harley-Davidson, the company partnered with Jane magazine in 2005 in a contest called the Spirit

of Freedom Contest to recognize women who overcome fears and other obstacles to become Harley riders. The grand prize winner was to receive a new Sportster 883. “The

adrenaline rush of riding a motorcycle out on the open is like no other experience. Through this contest, we are saluting women who embody that spirit of adventure

through small gestures, inner strength, and everyday selfless acts” commented Kathleen Lawler, Vice President of Communications, Harley-Davidson.16
EXHIBIT 5     Purchaser Demographic Profile: Harley-Davidson Inc.

SOURCE: Harley Davidson Fact Book, posted November 5, 2007, at http://investor.harley-davidson.com/downloads/factsheet.pdf.

Buell motorcycle products emphasize innovative design, responsive handling, and overall performance. The Buell motorcycle product line has traditionally consisted of

heavyweight performance models, powered by the 1200cc V-Twin engine. However, in 2000, they introduced the Buell Blast, a new vehicle designed specifically to attract

new customers into the sport of motorcycling. This vehicle was considerably smaller, lighter, and less expensive than the traditional Buell heavyweight models and is

powered by a 492-cc single-cylinder engine. The Buell line has continued to grow since the introduction of the lower-priced Buell Blast.
The average U.S. purchaser of the Buell heavyweight motorcycle is a male at the median age of 39 with a median household income of approximately $61,600. Internal

documents indicate that half of Buell Blast purchasers have never owned a motorcycle before, and in excess of 95% of them had never owned a Buell motorcycle before.

The median age of Blast purchasers is 38, with over one-half of them being female.
The heavyweight motorcycle market is comprised of four segments: standard, which emphasizes simplicity and cost; performance, which emphasizes handling and

acceleration; touring, which emphasizes comfort and amenities for long-distance travel; and custom, which emphasizes styling and individual owner customization.
In 2008, Harley-Davidson manufactured and sold 30 models of Harley-Davidson touring and custom heavyweight motorcycles, with domestic manufacturer’s suggested retail

prices ranging from approximately $6,695 to $20,645. There were eight Buell bikes ranging from $4,695 to $11,995. (See Exhibit 6.) The touring segment of the

heavyweight market was pioneered by Harley-Davidson and includes motorcycles equipped for long-distance touring with fairings, windshields, saddlebags, and Tour Pak

luggage carriers. The custom segment of the market includes motorcycles featuring the distinctive styling associated with classic Harley-Davidson motorcycles. These

motorcycles are highly customized through the use of trim and accessories.
Harley-Davidson’s traditional heavyweight motorcycles are based on variations of five basic chassis designs and are powered by one of four air-cooled, twin cylinder

engines with a 45-degree “V” configuration, which have displacements of 883cc, 1200cc, 1450cc, and 1550cc. The V-Rod has its own unique chassis design and is equipped

with the new Revolution powertrain, a new liquid-cooled, twin-cylinder, 1130cc engine, with a 60-degree “V” configuration.
EXHIBIT 6     2008 Motorcycles Product Line: Harley-Davidson Inc.

(Hunger 19-13)
Hunger, Thomas L. Wheelen and J. D. Strategic Management and Business Policy: Toward Global Sustainability for National University, 13th Edition. Pearson Learning

Solutions.VitalBook file.
1Buell Motorcycle Company partnered with Harley-Davidson in 1993 and was purchased by Harley-Davidson in 1998.
SOURCE: http://www.harley-davidson.com/wcm/Content/Pages/2008_ Motorcycles/2008_Motorcycles.jsp?locale=en_US&cwpws/dwp/cont- without-

flash=true&swfdwp=&dwp_dealerid=&dwp_pg=&cwpws/dwp/dwp-dealer-id.
Although there are some accessory differences between the top-of-the line touring motorcycles and those of its competitors, suggested retail prices are generally

comparable. The prices for the high-end of the Harley-Davidson custom product line range from being competitive to 50% more than its competitors’ custom motorcycles.

The custom portion of the Harley-Davidson product line represents their highest unit volumes and continues to command a premium price because of the features, styling,

and high resale value associated with Harley-Davidson custom products. The smallest displacement custom motorcycle (the 883cc Sportster) is directly price competitive

with comparable motorcycles available in the market. The surveys of retail purchasers indicate that, historically, over three-quarters of the purchasers of its

Sportster model either have previously owned competitive-brand motorcycles or are completely new to the sport of motorcycling or have not participated in the sport for

at least five years. Since 1988, research has consistently shown purchasers of Harley-Davidson motorcycles have a repurchase intent in excess of 90%, and management

expects to see sales of its 883cc Sportster model partially translated into sales of its higher-priced products in the normal two-to-three-year ownership cycle.
Worldwide Parts and Accessories net sales comprised 15.2%, 14.9%, and 15.4% of net sales in the motorcycles segment in 2007, 2006, and 2005, respectively. Worldwide

net sales of general merchandise, which includes MotorClothes apparel and collectibles, comprised 5.3%, 4.8%, and 4.6% of net sales in the Motorcycles segment in 2007,

2006, and 2005, respectively.
Management also provides a variety of services to its dealers and retail customers, including service training schools, customized dealer software packages, delivery

of its motorcycles, an owners club membership, a motorcycle rental program, and a rider training program that is available in the United States through a limited

number of authorized dealers.
President and CEO’s Comments17
James Ziemer has served as CEO since April 2005. Thomas E. Bergman, 41, succeeded him as Chief Financial Officer. Ziemer “has the information of where we’re going, but

he’s also rooted in where we’ve been” commented Kirk Topel, co-owner of Hal’s Harley-Davidson dealership in New Berlin, Wisconsin.
President Ziemer said in the press release announcing 2007 financial results,
Harley-Davidson managed through a weak U.S. economy during 2007. We reduced our wholesale motorcycle shipment plan for the fourth quarter, fulfilling our

commitment to our dealers to ship fewer Harley-Davidson motorcycles than we expected our dealers worldwide to sell at retail during 2007. While these are challenging

times in the U.S., our international dealer network delivered double digit retail sales growth in 2007.
For 2008, the Company once again plans to ship fewer Harley-Davidson motorcycles than it expects its worldwide dealer network to sell. The Company also expects

moderate revenue growth, lower operating margin, and diluted earnings per share growth rate of 4 to 7 percent compared to 2007. For the first quarter, it expects to

ship between 68,000 and 72,000 Harley-Davidson motorcycles, which compares to 67,761 units in the first quarter of 2007.
Commenting on the long-term sustainability and the economy, Ziemer continued,
Looking ahead, we will continue to manage the Company to generate long-term sustainable shareholder value while protecting the brand. We expect the U.S.

economy to continue to be very challenging in 2008, and we will closely monitor the retail environment and regularly assess our wholesale shipments throughout the

year.
Exhibits 7 and 8 present data on divisional revenues, worldwide motorcycle shipments, income, and registrations, both worldwide and U.S, and Europe for 2007.
EXHIBIT 7     Selected United States and World Financial and Sales Information: Harley-Davidson Inc.

SOURCE: Harley-Davidson, Inc., 2007 and 2005 Annual Report and 10-K.
EXHIBIT 8     World Registrations: Harley-Davidson Inc.

SOURCE: Harley-Davidson, Inc., 2007 Annual Report, p. 40.
New Millennium Bikes: The Buell and the V-Rod
Harley’s new V-Rod was introduced in the Los Angeles Convention Center on July 12, 2001. More than 4,000 packed into the center for the company’s long-awaited

announcement. The cavernous room went black. The engines roared in the darkness. Spotlights clicked on and followed two glinting new hot-rods as they roared onto

center stage.18
Harley-Davidson deviated from its traditional approach to styling, with the introduction of the V-Rod motorcycle. The new, liquid cooled V-Rod, inspired by Harley-

Davidson’s drag racing heritage, combines the characteristics of a performance motorcycle with the styling of a custom.19 Liquid cooling allows riders to rev a little

higher and hotter in each gear, boosting acceleration. It doesn’t sound like a big deal, but it was a giant step for a company so stubbornly conservative that it has

made only air-cooled engines for 100 years; its designers just couldn’t bear the idea of placing a radiator on the front of the bike.20
The V-Rod is Milwaukee-based Harley-Davison Inc.’s first truly new motorcycle in more than 50 years. A sleek machine in the making for more than six years, the V-Rod

is designed more for speed and handling, unlike the company’s immensely popular touring bikes.21
As it ramped up production, premiums on many models disappeared. Chief Executive Officer James L. Ziemer says Harley wants to “narrow the gap” between supply and

demand in order to curb the long-standing—but fast-diminishing—practice of selling bikes at a premium.22 The V-Rod’s $17,000 price tag has also failed to win younger

buyers.23 To that end, Harley has poured money into developing new, youth-oriented models. The V-Rod—a low-slung, high-powered number known formally as a sport

performance vehicle and colloquially as a crotch rocket—was meant for hard-charging youths. Harley has also tried to go young with the Buell Firebolt ($10,000), its

answer to Japanese sport bikes, and the Buell Blast ($4,400), a starter motorcycle.
At the Detroit Harley-Davidson/Buell dealership in Center Line, owner Jim Loduca commented: “This is the first time in 10 years that I’ve actually had product on the

floor available, but our sales are also up by 14 percent this year. The company has watched this demand curve very carefully. They are simply riding the wave. They

know full well that it would be catastrophic to saturate the market.” He is also encouraged by Harley’s biggest product departure in recent decades—the V-Rod muscle

bike.24
Clay Wilwert, whose family has owned a dealership in Dubuque since 1959, “But guess what, as they rode it, they loved it.” They said, “Hey, this is really cool that it

doesn’t shake my hands asleep.”25
Some Harley traditionalists say the V-Rod, styled to compete with super-fast European bikes, strays too far from the company’s all-American roots, which tend to favor

heavier cruising machines.26
Licensing27
Harley-Davidson endeavored to create an awareness of the “Harley-Davidson” brand among the non-riding public and provides a wide range of product for enthusiasts by

licensing the name “Harley-Davidson” and numerous related trademarks. Harley-Davidson had licensed the production and sale of a broad range of consumer items,

including T-shirts, jewelry, small leather goods, toys, and numerous other products (licensed products). Although the majority of licensing activity occurs in the

United States, Harley-Davidson continues to expand these activities in international markets. Royalty revenues from licensing, included in Motorcycles segment net

revenue, were approximately $46 million, $45.5 million, and $43 million in 2007, 2006, and 2005, respectively.
Marketing and Distribution28
Marketing efforts are divided among dealer promotions, customer events, magazine and direct mail advertising, public relations, cooperative programs with Harley-

Davidson/Buell dealers, and national television advertising. Harley-Davidson also sponsors racing activities and special promotional events and participates in all

major motorcycle consumer shows and rallies.
E-Commerce29
Since 2001, Harley-Davidson utilized a highly interactive Web site at www.harley-davidson.com. Their model is unique in the industry in that, while the online catalog

is viewed from the Harley-Davidson Web site, orders are actually distributed to the participating authorized Harley-Davidson dealer that the customer selects. In turn,

those dealers fill the order and handle any after-sale services that the customer may require. In addition to purchasing, customers actively browse the site, create

and share product wish lists, and utilize the dealer locator.
Harley-Davidson Customer Base
Harley-Davidson’s customers are not what some people might expect. They see the rough and tumble riders and do not expect that a good proportion of Harley-Davidson

riders are white-collar workers and executives taking the weekend relaxation on their bike. Selected quotes from customers follow:
¦    “It’s about an image—freedom of the road, hop on your bike and go, independent living, the loosing of the chains,” said Dave Sarnowski, a teacher and Harley

rider from La Farge, Wisconsin.30
¦    “The Harley people I know go to church, have jobs, shop at the mall, just like everyone else,” says Angie Robison, 68, of Daytona Beach, who helps her husband,

Joe, run a motorcycle repair shop and Harley memorabilia/accessories store. “I can wear my silks over here and my leathers over there, and I’m still the same

person.”31
¦    “I worked at a computer all day for the city, and for me it’s pure relaxation. I wear the leathers because they’re protective.”32
¦    “I love the feeling of being out on that bike on the roads—especially in the mountains. You just can’t beat it, the feeling you get,” says Rob Barnett,

Harley-Davidson owner.
¦    “In general, the motorcycle industry has increased for 12 years straight, and we’re expecting another increase—especially in Harley-Davidson sales—this year,”

says Don Brown, motorcycle analyst with DJB Associates.33
¦    “A Harley is a rolling sculpture. A piece of artwork,” commented Matt Chase, sales manager of N.F. Sheldon, Harley store. “You work all week, then on the

weekends you put on leathers and everyone’s equal … all the same, brothers and sisters.”34
Recession Resistance?
Ziemer recognized that 2008 would be a challenging year for Harley-Davidson given the pending recession. How will this affect Harley-Davidson? Harley has seen

tremendous sales and stock price growth since 1986 until a slowdown in 2007. Some analysts question how Harley-Davidson will be hit in a deep recession. “For years,

Harley-Davidson and the analysts that covered the company have reported that the business is recession-resistant. Given the recent changes in the economic and

political landscape, this assertion is being put to the test, and from what we can tell, is ringing true. According the CEO Jim Ziemer, “motorcycles, the critics say,

are easily deferred purchases. We always said we feel we are recession-resistant, not recession-proof.”35 (See Exhibit 9).
EXHIBIT 9     Motorcycle Unit Shipments and Net Sales: Harley-Davidson Inc.

SOURCE: Harley-Davidson 2007 10-K, page 34.
Competition36
The heavyweight (651 + cc) motorcycle market is highly competitive. Major competitors are based outside the United States and generally have more financial and

marketing resources. They also have larger worldwide sales volumes and are more diversified. In addition to these larger, established competitors, a growing segment of

competition has emerged in the United States. The new U.S. competitors generally offer heavyweight motorcycles with traditional styling that compete directly with many

of the Harley-Davidson’s products. These competitors currently have production and sales volumes that are lower than the Harley-Davidson’s and did not hold a

significant market share. (See Exhibits 10, 11, and 12.)
Competition in the heavyweight motorcycle market is based upon a number of factors, including price, quality, reliability, styling, product features, customer

preference, and warranties. Harley-Davidson emphasizes quality, reliability, and styling in its products and offers a one-year warranty for its motorcycles. Management

regards its support of the motorcycling lifestyle in the form of events, rides, rallies, H.O.G., and its financing through HDFS, as a competitive advantage. In

general, resale prices for used Harley-Davidson motorcycles, as a percentage of prices when new, are significantly higher than resale prices for used motorcycles of

competitors.
Domestically, Harley-Davidson competes most heavily in the touring and custom segments of the heavyweight motorcycle market, which together accounted for 80%, 79%, and

80% of total heavyweight retail unit sales in the United States during 2007, 2006, and 2005, respectively. The custom and touring motorcycles are generally the most

expensive vehicles in the market and the most profitable. During 2007, the heavyweight segment including standard, performance, touring, and custom motorcycles,

represented approximately 54% of the total U.S. motorcycle market in terms of new units registered.
EXHIBIT 10     651+cc Motorcycle Market Regional Comparison by Segment: Harley Davidson Inc.

Notes: Custom: Characterized by “American Styling.” These bikes are often personalized with accessories.
Touring: Designed for long trips with an emphasis on comfort, cargo capacity, and reliability. These bikes often have features such as two-way radio for communication

with a passenger, stereos, and cruise control.
Performance: Characterized by quick acceleration, top speed, and handling. These bikes are often referred to as sports bikes. Standard: A basic, no frills motorcycle

with an emphasis on low price. The standard percentage may also include the “adventure touring” niche.
SOURCE: Harley Davidson Fact Book, posted November 5, 2007 at http://investor.harley-davidson.com/registrations/registrations_regional.cfm.
EXHIBIT 11     Market Share of U.S. Heavyweight Motorcycles 1 (Engine Displacement of 651 + cc)1

Note: 1Motorcycle registration and market share information has been derived from data published by the Motorcycle Industry Council (MIC).
SOURCE: Harley-Davidson, Inc., Form 10-K, 2007, page 9 and Form 10-K, 2005, page 9.
EXHIBIT 12     Motorcycle Industry Registration Statistics (Units): Harley-Davidson Inc.

Notes:
1.    HOG is the ticker for Harley-Davidson. These are actual registrations of motorcycles. The Harley-Davidson, Inc. registrations are typically lower than actual

sales due to timing differences.
2.    Data provided by R. L. Polk (1994), Giral S. A., Australian Bureau of Statistics and H-D Japan. The most recent date available is for 2003.
SOURCE: Harley Davidson Fact Book, posted November 5, 2007, at http://investor.harley-davidson.com/downloads/factsheet.pdf.
For the last 20 years, Harley-Davidson has led the industry in domestic (United States) unit sales of heavyweight motorcycles. Its market share in the heavyweight

market was 48.7% in 2007 compared to 49.3% in 2006. The next largest competitor in the domestic market had only a 14.2% market share.
Rider Training and Safety
“Increasingly, the motorcycle riders who are getting killed are in their 40s, 50s, and 60s,” says Susan Ferguson, vice president for research at the Insurance

Institute for Highway Safety, which did the study.37 Riders over 40 accounted for 40% of all fatalities in 2000, up from 14% in 1990. Part of the reason for the

dramatic increase in older biker’s deaths is the growing number of men and women over 40 buying motorcycles, IIHS says.
In 2000, Harley-Davidson launched an instruction program called Rider’s Edge, run through dealers. Rookies pay $225 or so for a 25-hour class. This training program

can be credited with bringing in more first-time riders as Harley customers. Forty-five percent are women, 86% buy something, and 25% buy a Harley-Davidson or a Buell

within three months. “Going into a Harley dealership can be intimidating,” says Lara Lee, who runs the program. “We give them a home base and get them riding.”38
In March 2008, Harley-Davidson announced the company was moving the Rider’s Edge program into California. There was hope the program would encourage more motorcycle

sales. Julie Chichlowski, the director of Rider Services stated, “One distinct advantage of the Rider’s Edge New Rider Course is that feeling of being part of

something bigger. Rider’s Edge teaches the skills necessary to ride a motorcycle but in an environment that is pure Harley-Davidson.39
Motorcycle Manufacturing40
Harley-Davidson designed its manufacturing process to increase capacity, improve product quality, reduce costs, and increase flexibility to respond to market changes.

Harley-Davidson incorporated manufacturing techniques focused on the continuous improvement of its operations designed to control costs and maintain quality. Included

in these techniques were employee involvement, just-in-time inventory principles, partnering agreements with the local unions, high performance work organizations, and

statistical process control, all designed to improve product quality, productivity, and asset utilization in the production of Harley-Davidson motorcycles.
Harley-Davidson uses just-in-time inventory to minimize inventories of raw materials and work in process, as well as scrap and rework costs. This system also allows

quicker reaction to engineering design changes, quality improvements, and market demands.
Raw Material and Purchase Components41
Harley-Davidson worked hard to establish and/or reinforce long-term, mutually beneficial relationships with its suppliers. Through these collaborative relationships,

it has gained access to technical and commercial resources for application directly to product design and development. Management anticipates the focus on

collaboration and strong supplier manufacturing initiatives to lead to increased commitment from suppliers. This strategy has resulted in improved product quality,

technical integrity, application of new features and innovations, reduced lead times for product development, and smoother/faster manufacturing ramp-up of new vehicle

introductions. Harley’s initiative to improve supplier productivity and component cost has been instrumental in delivering improvements in cost and in offsetting raw

material price increases.
Harley-Davidson purchased all of its raw materials, principally steel and aluminum castings, forgings, sheets and bars, and certain motorcycle components, including

carburetors, batteries, tires, seats, electrical components, and instruments. Given current economic conditions in certain raw material commodity markets, and pressure

on certain suppliers due to difficulties in the automotive industry, Harley-Davidson monitors supply, availability, and pricing for both its suppliers and in-house

operations.
Research and Development42
Harley-Davidson views research and development as a significant factor in its ability to lead the custom and touring motorcycling market and to develop products for

the performance segment. The company’s Product Development Center (PDC) brings employees from styling, purchasing, and manufacturing together with regulatory

professionals and supplier representatives to create a concurrent product and process development team. Research and development expenses were $185.5 million, $177.7

million, and $178.5 million in 2007, 2006, and 2005, respectively.
Patents and Trademarks43
Harley-Davidson owns patents that relate to its motorcycles and related products and processes for their production. Harley-Davidson has increased its efforts to

patent its technology and certain motorcycle-related designs and to enforce those patents. Management sees such actions as important as it moves forward with new

products, designs, and technologies.
Trademarks are important to the Harley-Davidson’s motorcycle business and licensing activities. It has a vigorous global program of trademark registration and

enforcement to strengthen the value of the trademarks associated with its products and services, prevent the unauthorized use of those trademarks, and enhance its

image and customer goodwill. It believes the HARLEY-DAVIDSON trademark and its Bar and Shield trademark are each highly recognizable by the public and are very

valuable assets. The BUELL trademark is well known in performance motorcycle circles, as is the associated Pegasus logo. The company is making efforts to ensure that

each of these brands will become better known as the Buell business expands.
Seasonality44
In general, Harley-Davidson has not experienced significant seasonal fluctuations in its sales. This has been primarily the result of a strong demand for the Harley-

Davidson motorcycles and related products, as well as the availability of floor plan financing arrangements for its North American and European independent dealers.

Floor plan financing allows dealers to build their inventory levels in anticipation of the spring and summer selling seasons. Harley-Davidson expressed its belief that

efforts to increase the availability of its motorcycles has resulted in an increase in seasonality at its independent dealers. Over the last several years they have

been working to increase the availability of its motorcycles at dealers to improve the customer experience.
Regulations45
Federal, state, and local authorities have various environmental control requirements relating to air, water, and noise pollution that affect the business and

operations. Harley-Davidson endeavors to ensure that its facilities and products comply with all applicable environmental regulations and standards.
The motorcycles are subject to certification by the U.S. Environmental Protection Agency (EPA) for compliance with applicable emissions and noise standards and by the

State of California Air Resources Board (CARB) with respect to CARB’s more stringent emissions standards. Motorcycles sold in California are also subject to certain

tailpipe and evaporative emissions standards that are unique to California. The EPA finalized a new tailpipe emissions standard for 2006 and 2010 respectively which

are harmonized with the California emission standards. Additionally, Harley-Davidson motorcycles must comply with the emissions, noise, and safety standards of the

European Union, Japan, and other international markets.
Harley-Davidson, as a manufacturer of motorcycle products, is subject to the National Traffic and Motor Vehicle Safety Act, which are administered by the National

Highway Traffic Safety Administration (NHTSA). They have certified to NHTSA that their motorcycle products comply fully with all applicable federal motor vehicle

safety standards and related regulations. Harley-Davidson has, from time to time, initiated certain voluntary recalls. During the last three years, Harley-Davidson

initiated 15 voluntary recalls at a total cost of $10.8 million.
Employees46
As of December 31, 2007, the Motorcycles segment had approximately 9,000 employees. Unionized employees at the motorcycle manufacturing and distribution facilities in

Wauwatosa, Menomonee Falls, Franklin, and Tomahawk, Wisconsin, and Kansas City, Missouri, are represented principally by the Paper Allied-Industrial Chemical and

Energy Workers International Union (PACE) of the AFL-CIO, as well as the International Association of Machinist and Aerospace Workers (IAM). Production workers at the

motorcycle manufacturing facility in York, Pennsylvania, are represented principally by the IAM. The collective bargaining agreement with the Pennsylvania-IAM will

expire on February 2, 2010, the collective bargaining agreement with the Kansas City-USW and IAM will expire on July 30, 2012, and the collective bargaining agreement

with the Wisconsin-USW and IAM will expire on March 31, 2008.
Approximately 50% of Harley-Davidson’s 9,000 employees ride a Harley-Davidson. All employees, including Ziemer and Bluestein, go through a dealer to purchase their

bike. This way, the employees see the customer experience firsthand.
Properties47
The following is a summary of the principal operating properties of Harley-Davidson as of December 31, 2007. Seven facilities that perform manufacturing operations:

Wauwatosa and Menomonee Falls, Wisconsin, suburbs of Milwaukee (motorcycle powertrain production); Tomahawk, Wisconsin (fiberglass parts production and painting);

York, Pennsylvania (motorcycle parts fabrication, painting and big-twin assembly); Kansas City, Missouri (Sportster assembly); East Troy, Wisconsin (Buell motorcycles

assembly); Manaus, Brazil (assembly of select models for Brazilian market). (See Exhibit 13.)
Financial Services Segment48
The Financial Services segment has office facilities in Carson City, Nevada. Wholesale, insurance, and retail operations are in Plano, Texas, and European wholesale

operations in Oxford, England. Ownership and lease structures are outlined in Exhibit 13.
Harley-Davidson and Buell49
Harley-Davidson Financial Services HDFS, operating under the trade name Harley-Davidson Credit, provides wholesale financial services to Harley-Davidson and Buell

dealers and retail financing to consumers. HDFS, operating under the trade name Harley-Davidson Insurance, is an agent for the sale of motorcycle insurance policies

and also sells extended service warranty agreements, gap contracts, and debt protection products.
Wholesale financial services include floor plan and open account financing of motorcycles and motorcycle parts and accessories, real estate loans, computer loans, and

showroom remodeling loans. HDFS offers wholesale financial services to Harley-Davidson dealers in the United States, Canada, and Europe and during 2007; approximately

96% of such dealers utilized those services. The wholesale finance operations of HDFS are located in Plano, Texas, and Oxford, England.
Retail financial services include installment lending for new and used Harley-Davidson and Buell motorcycles. HDFS’ retail financial services are available through

most Harley-Davidson and Buell dealers in the United States and Canada. HDFS’ retail finance operations are located in Carson City, Nevada, and Plano, Texas.
EXHIBIT 13     Principal Operating Facilities: Harley Davidson Inc.

SOURCE: Harley-Davidson, Inc., 2007 Form 10-K, p. 20.
Motorcycle insurance, extended service contracts, gap coverage, and debt protection products are available through most Harley-Davidson and Buell dealers in the United

States and Canada. Motorcycle insurance is also marketed on a direct basis to motorcycle riders.
Funding50
HDFS is financed by operating cash flow, advances, and loans from Harley-Davidson, asset-backed securitizations, commercial paper, revolving credit facilities, senior

subordinated debt, and redeemable preferred stock. HDFS also retains an interest in the excess cash flows from receivables and recognizes income on this retained

interest. After the sale, HDFS performs billing and portfolio management services for these loans and receives a servicing fee for providing these services.
Competition51
The ability to offer a package of wholesale and retail financial services is a significant competitive advantage for HDFS. Competitors compete for business based

largely on price and, to a lesser extent, service. HDFS competes based on convenience, service, brand association, strong dealer relations, industry experience, terms,

and price.
During 2007, HDFS financed 55% of the new Harley-Davidson motorcycles retailed by independent dealers in the United States, as compared to 48% in 2006. Competitors for

retail motorcycle finance business are primarily banks, credit unions, other financial institutions. In the motorcycle insurance business, competition primarily comes

from national insurance companies and from insurance agencies serving local or regional markets. For insurance-related products such as extended service warranty

agreements, HDFS faces competition from certain regional and national industry participants.
Seasonality52
In the northern United States and Canada, motorcycles are primarily used during warmer months, generally March through August. Accordingly, HDFS experiences

significant seasonal variations. Retail customers typically do not buy motorcycles until they can ride them. From mid-March through August, retail financing volume

increases and wholesale financing volume decreases as dealers deplete their inventories. From September through mid-March, there is a decrease in retail financing

volume while dealer inventories build and turn over more slowly, substantially increasing wholesale financing volume.
Employees
At the end of 2007, the Financial Services segment had 755 employees, none of which were unionized.
Corporate Financial and Stock Price Performance
It appeared as though the weakened U.S. economy would stifle growth for Harley-Davidson. (Exhibits 14 and 15 provide the company’s income statement and balance sheet

for the most recent five years. Exhibit 16 provides a geographic breakdown of sales.) Since Harley went public, its shares have risen over 23,000% (through the end of

2006) but declined in 2007. As of February18, 2008, there were 90,748 shareholders of record of Harley-Davidson common stock (Exhibit 17 provides a comparison of

Harley-Davidson stock and the Standard and Poor’s 500 since the 1986 initial public offering.) What does the future hold for Harley-Davidson? While trading near its

five-year low, analysts considered two aspects of the Harley-Davidson product.
“It’s an upper-middle-class toy,” says Chad Hudson of the Prudent Bear fund, one of a number of prominent short-sellers convinced that Harley will skid. “As people run

out of disposable income, that’s going to hurt.”53
“The risk is that retail trends may continue to weaken at Harley-Davidson, causing inventories to build. Harley-Davidson may then lower its production numbers,” says

analyst Gregory Badishkanian.54
EXHIBIT 14     Balance Sheet 2003–2007: Harley-Davidson Inc. (Dollar amounts in thousands)

SOURCE: Harley-Davidson, Inc., 2007 Form 10-K, page 60 and 2005 Form 10-K, page 53.
How does Harley-Davidson move forward and continue to grow at the pace it has seen in the past? Is this a reasonable long-term growth rate? How does it maintain

interest in the 2008 model bikes? How does it grapple with the aging baby boomers, who are generally the individuals who can afford a Harley-Davidson motorcycle? These

were but a few of the questions in the minds of senior management as they did strategic planning.
EXHIBIT 15     Income Statement 2003–2007: Harley-Davidson Inc. (Dollar amounts in thousands)

SOURCE: Harley-Davidson, Inc., 2007 Form 10-K, page 31, 2005 Form 10-K, page 52.

EXHIBIT 16     Geographic Information: Harley-Davidson Inc. (Dollar amount in thousands)

Notes:
1. Net revenue and income is attributed to geographic regions based on location of customer.
2.    Long-lived assets include all long-term assets except those specifically excluded under SFAS Number 131, such as deferred income taxes and finance receivables.
SOURCE: Harley-Davidson 2007 Form 10-K, page 96, and 2005 Form 10-K, page 70.
EXHIBIT 17     Year-End Market Value of $100 invested on December 31, 1986 through December 31, 2006: Harley-Davidson vs. SP 500

SOURCE: http://investor.harley-davidson.com/HDvsSP500.cfm.
NOTES
1.    Harley Davidson Annual Report, 2002, back cover.
2.    Nakashima, Ryan, “Potholes Ahead for Harley’s New Top Hog,” Associated Press Financial Wire, April 13, 2005.
3.    Thomas L. Wheelen, Kathryn E. Wheelen, Thomas L. Wheelen II, and Richard D. Wheelen, “Harley-Davidson: The 95th Anniversary,” Case 16, Strategic Management and

Business Policy, 8th Ed., Prentice Hall/Pearson Education, Inc., Upper Saddle River, NJ, 2002.
4.    Jonathan Fahey, “Love into Money,”Forbes, January 7, 2002, p. 60–65.
5.    Harley-Davidson Annual Reports, 2007, 2005, 2003, 2001, 1999, 1997, 1995.
6.    Missy Sullivan. “High-Octane Hog,” Forbes, September 10, 2002, pp. 8–10. The preceding two paragraphs were directly quoted with minor editing.
7.    “A Harley Takes an Engine from Porsche” New York Times, May 26, 2002. Accessed at http://www.nytimes.com. The preceding paragraph was directly quoted with

minor editing.
8.    James C. Ziemer, Letter to the Shareholders, Harley-Davidson 2005 Annual Report.
9.    James C. Ziemer, Letter to the Shareholders, Harley-Davidson 2005 Annual Report.
10.    Lustgarten, Abrahm, “The List of Industry Champs,”Fortune, March 7, 2005. http://money.cnn.com/magazines/fortune/fortune_archive/2005/03/07/8253449/index.htm
11.    John Helyar, “Will Harley-Davidson Hit the Wall?” Fortune, August 12, 2002, pp. 120–124.
12.    Company press release, June 1, 2006, Harley-Davidson Kicks Off Construction of Its Museum.
13.    Harley-Davidson, 2007 10-K. The following section was directly quoted with minor editing, pages 6–8.
14.    Jonathan Fahey, “Love into Money,” Forbes, January 7, 2002, pp. 60–65.
15.    Discover Today’s Motorcycling—Press Release “Rockefeller Center Motorcycle Show Opens with “Today Show” segment and Giant Preview Party, April 6, 2002.
16.    Harley-Davidson and Jane magazine roll out contest to honor women with an unquenchable Spirit of Freedom, Market Wire, June 7, 2005.
17.    Harley-Davidson Reports Fourth Quarter and Full Year Results for 2007. January 25, 2008. www.harley-davidson.com. Much of this section was directly quoted from

President Ziemer’s comments with minor editing.
18.    Missy Sullivan, “High-Octane Hog,” Forbes, September 10, 2002, pp. 8–10.
19.    Harley-Davidson 10-K, 2005.
20.    Jonathan Fahey, “Love into Money,” Forbes, January 7, 2002, pp. 60–65.
21.    Rich Rovito, “No Revving Needed for Sales of Harley’s V-Rod Motorcycle,”The Business Journal Serving Greater Milwaukee, January 14, 2002. Accessed at

http://milwaukee.bizjournals.com/milwaukee/stories/2002/01/14/story8.html
22.    Joseph Weber, “Harley Investors May Get a Wobbly Ride,” Business Week, February 11, 2002, p. 65.
23.    The Business Week 50 Ranking, Business Week, Spring 2002, p. 54.
24.    James V. Higgins, “All Hail, Harley-Davidson”The Detroit News, February 22, 2002. Accessed at http://detnews.com/2002.
25.    Jonathan Fahey, “Love into Money,” Forbes, January 7, 2002, pp. 60–65.
26.    Jerry Shiver, “Richer, Older Harley Riders ‘Like Everyone Else,’”USA Today, March 8, 2002, pp. 1A–2A.
27.    Harley-Davidson, 2007 10-K. The following paragraph was directly quoted with minor editing.
28.    Harley-Davidson, 2007 10-K. The following two paragraphs were directly quoted with minor editing.
29.    Harley-Davidson, 2007 10-K. The paragraph was directly quoted with minor editing.
30.    “Harley Roars into Its Second Century,” The Tribune, Ames Iowa, July 26, 2002, p. A2.
31.    Jerry Shiver, “Richer, Older Harley Riders ‘Like Everyone Else,’”USA Today, March 8, 2002, pp. 1A–2A.
32.    Jerry Shiver, “Richer, Older Harley Riders ‘Like Everyone Else,’”USA Today, March 8, 2002, pp. 1A–2A.
33.    Ridley, Amanda, Spartanburg, S.C., “Harley-Davidson dealer moving to expanded showroom,” Herald-Journal, July 11, 2004.
34.    Pisinski, Tonya M., “Me and my Harley: Hawg riders are downright passionate about their bike riding and hitting the trail,” Worcester Telegram and Gazette, May

25, 2005.
35.    David Wells, “Lehman’s Kantor Bets on Harley-Davidson: Call of Day,” Bloomberg, November 14, 2001.
36.    Harley-Davidson, Form 10-K, 2007. The following four paragraphs were directly quoted with minor editing.
37.    Earle Eldrige, “More Over-40 Motorcyclists Die in Crashes” USA Today, January 10, 2002, p. 1B.
38.    Jonathan Fahey, “Love into Money,” Forbes, January 7, 2002, pp. 60–65.
39.    “Rider’s Edge, the Harley-Davidson Academy of Motorcycling, moves into California,” press release, March 11, 2008, www.harley-davidson.com.
40.    Harley-Davidson, Form 10-K, 2007. The following paragraph was directly quoted with minor editing.
41.    Harley-Davidson, Form 10-K, 2007. The following paragraph was directly quoted with minor editing.
42.    Harley-Davidson, Form 10-K, 2007. The following paragraph was directly quoted with minor editing.
43.    Harley-Davidson, Form 10-K, 2007. The first three paragraphs were directly quoted with minor editing.
44.    Harley-Davidson, Form 10-K, 2007. The first paragraph was directly quoted with minor editing.
45.    Harley-Davidson, Form 10-K, 2007. The first paragraph was directly quoted with minor editing.
46.    Harley-Davidson, Form 10-K, 2007. The first paragraph was directly quoted with minor editing.
47.    Harley-Davidson, Form 10-K, 2007, the following paragraph was directly quoted with minor editing.
48.    Harley-Davidson, Form 10-K, 2007, the following paragraph was directly quoted with minor editing.
49.    Harley-Davidson, Form 10-K, 2007, the following three paragraphs were directly quoted with minor editing.
50.    Harley-Davidson, Form 10-K, 2007, the following paragraph was directly quoted with minor editing.
51.    Harley-Davidson, Form 10-K, 2007, the following two paragraphs were directly quoted with minor editing.
52.    Harley-Davidson, Form 10-K, 2007, the following paragraph was directly quoted with minor editing.
53.    John Helyar, “Will Harley-Davidson hit the Wall?” Fortune, August 12, 2002, pp. 120–124.
54.    “Harley-Davidson Cut From Citi List,” Associated Press, March 14, 2008.
(Hunger 19-1)
Hunger, Thomas L. Wheelen and J. D. Strategic Management and Business Policy: Toward Global Sustainability for National University, 13th Edition. Pearson Learning

Solutions.VitalBook file.

WEEK 4 ASSIGNMENT INSTRUCTIONS
This week you will finish putting together all the elements of your Strategic Audit (SA). The SA is due by the end of the last day of the course on Saturday in Week 4.

The SA is worth 180 points. Use the Week 4 Dropbox assignment link to submit your work.
The SA Scoring Checklist that I will use to score your SA is shown below and in Doc Sharing on the course page:

BUS 480–SA SCORING CHECKLIST.docx

************************************************************************************************************************************
ASSIGNMENT: Submit the complete Strategic Audit. Include your updated/improved/corrected EFAS, IFAS, SFAS, and TOWS Matrix in your SA. Show your linkages. Identify the

Strengths, Weaknesses, Opportunities, Threats, Core Competencies, and Distinctive Competencies in your SA.

The minimum attachments are as follows:
Exhibit 1, EFAS
Exhibit 2, IFAS
Exhibit 3, SFAS
Exhibit 4, Ratio Analysis for past 5 years
Exhibit 5, Common-Size Income Statements for last 5 years
Exhibit 6, Implementation, Evaluation, and Control Plan
Exhibit 7, TOWS Matrix
Exhibit 8, Pro Forma Income Statements for each strategic alternative for next 5 years.

Templates are provided for all Exhibits.  You can find the templates on Doc Sharing in eCollege.  Be certain you do not COPY from the templates.  They are provided to

help you format your effort – not to provide you words and numbers.

Additional Exhibits can be used to contribute to earning a superior score on your SA. These additional exhibits could be:
Common-size Balance Sheets for the last 5 years
Pro forma Balance Sheets for each strategic alternative for next 5 years.
Modeling
VRIO Analysis
Issue Priority Matrixes

DUE BY THE END OF THE DAY ON THE SATURDAY THAT ENDS THIS WEEK AND THAT ENDS THIS COURSE. STRATEGIC AUDIT IS WORTH 180 POINTS.

INSTRUCTIONS:

1.  Level of detailed discussion and analysis:Your prose needs to be in sufficient detail to demonstrate your business knowledge, critical thinking and critical

analysis abilities.  One line statements do not show nor demonstrate satisfactory business knowledge.  Bullets do not show nor demonstrate satisfactory business

knowledge.  Your writing needs to expand on each point in a paragraph where you discuss and analyze the important elements of that particular SA item.  See Lecture 8.1

Week 3 for some examples of demonstrated critical thinking, critical analysis, good discussion / analysis for your paragraphs.  Make your paragraphs detailed

discussion and analysis….. not one liners.

2.  Single space your SA with the appropriate line spacing between parts, sections, and paragraphs.  Extra line spacing is a serious detractor.  Follow the

alphanumeric paragraph structure as in the text’s SA.  Do not use bullets.

3.  Appendix 12.C shows an example of a written SA. BUT it is missing Paragraph IIID and Paragraph IVD. Be sure to add Paragraph IIID and IVD to your SA. Be sure to

show your Opportunities, Threats, Strengths, and Weaknesses in Paragraphs III and IV using (O), (T), (S), and (W).Identify Core and Distinctive Competencies in

Paragraph IV.

4.  Use Appendix 1.A, Appendix 12.B and Appendix 12.C in detail as you prepare your Strategic Audit.

5.  Follow the guidance in the Live Sessions. Remember to keep your decision making at the strategic level – the Big Picture level. You are acting as the CEO/SVP. But

you are also acting at the lower staff levels to brainstorm, generate alternatives, perform critical analysis, and make recommendations to the CEO/SVP levels. The

decision maker CEO/SVP decides on the strategic alternative to implement.

6.  Pay close attention to your Strategic Alternatives and Recommended Strategy in Paragraph VI of your SA. Appendix 12.B, page 382, paragraphs 7A and 7B provide

precise guidance. Your 3 Strategic Alternatives of Paragraph VI should be 3 mutually exclusive strategicalternatives at the Corporate level. Within each of these 3

corporate level strategic alternatives, you should provide appropriate supporting Business and Functional levelstrategies. All 3 levels of strategy should be included

in each of your strategic alternatives in your SA. See also Appendix 1.A, page 40-41, paragraphs VIA and VIB for guidance.

7.  Discuss in detail each of the 3 strategic alternative corporate scenarios in Paragraph VI.  Discuss in detail the Pros and Cons for each of the 3 strategic

alternatives in Paragraph VI.

Follows is a suggested paragraph organization for Paragraph VI.A, Strategic Alternatives of the SA for your discussion in detail of your 3 strategic alternatives.  If

you follow this organization, then you’ll be sure to construct, analyze, and discuss in detail your 3 strategic alternatives under consideration.  Remember, you need

to have the hierarchy of strategy, the corporate scenario, and the pros/cons for each of your 3 Strategic Alternatives.
A.  Strategic Alternatives
1.  Strategic Alternative #1.   Name it

a.  Corporate Directional Strategy.   Describe the details.
b.  Supporting Business Strategy.    Describe the details.
c.  Supporting Functional Strategies
(1)  _______ Functional Strategy…describe the details.
(2)   ________ Functional Strategy…describe the details.
(3)  ________ Functional Strategy…describe the details.
(4)  etcetc as appropriate/applicable
d.  Corporate Scenario
(1)  Describe the details of your scenario, predictions, assumptions, and estimates of the future, outcomes, parameters,  results, competition, trends, profits, costs,

sales, GDP, inflation, revenues, market share, etc etc….what you consider important to your scenario.
(2)  etcetc as needed
(3)  etcetc  as needed
e.  Pros
(1)  Describe the details
(2) etcetc as needed
f.  Cons
(1)  describe the details
(2)  etcetc as needed

2.  Strategic Alternative #2.  Name it
a.  Corporate Directional Strategy.   Describe the details.
b.  Supporting Business Strategy.    Describe the details.
c.  Supporting Functional Strategies
(1)  _______ Functional Strategy…describe the details.
(2)   ________ Functional Strategy…describe the details.
(3)  ________ Functional Strategy…describe the details.
(4)  etcetc as appropriate/applicable
d.  Corporate Scenario
(1)  Describe the details of your scenario, predictions, assumptions, and estimates of the future, outcomes, parameters,  results, competition, trends, profits, costs,

sales, GDP, inflation, revenues, market share, etc etc….what you consider important to your scenario.
(2)  etcetc as needed
(3)  etcetc  as needed
e.  Pros
(1)  Describe the details
(2) etcetc as needed
f.  Cons
(1)  describe the details
(2)  etcetc as needed

3.  Strategic Alternative #3.  Name it.
a.  Corporate Directional Strategy.   Describe the details.
b.  Supporting Business Strategy.    Describe the details.
c.  Supporting Functional Strategies
(1)  _______ Functional Strategy…describe the details.
(2)   ________ Functional Strategy…describe the details.
(3)  ________ Functional Strategy…describe the details.
(4)  etcetc as appropriate/applicable
d.  Corporate Scenario
(1)  Describe the details of your scenario, predictions, assumptions, and estimates of the future, outcomes, parameters,  results, competition, trends, profits, costs,

sales, GDP, inflation, revenues, market share, etc etc….what you consider important to your scenario.
(2)  etcetc as needed
(3)  etcetc  as needed
e.  Pros
(1)  Describe the details
(2) etcetc as needed
f.  Cons
(1)  describe the details
(2)  etcetc as needed

8.  For Para VII, Implementation, and Para VIII, Evaluation and Control, organize your discussion and analysis around your one recommended Strategic Alternative that

you have chosen to implement.  This discussion in Para VII and Para VIII is the verbiage that supports the data elements in your Exhibit 6, Implementation, Evaluation

and Control Plan for your recommended Strategic Alternative.  Your Exhibit 6 and Para VII and Para VIII should contain the same details about your one recommended

Corporate Strategy, supporting Business Strategy, and several supporting Functional Strategies.

Note:  we will NOT follow the Exhibit 6 data element organizationfor the Maytag Corp as shown on page 390 where the 8 Strategic Factors from the SFAS are merely

transferred into the table. Since for a particular corporate strategic alternative all the strategic factors from the SFAS will NOT be attacked – only some will be

attacked as the corporation goes in the new corporate direction.  So, tailor your Exhibit 6 and Para VII and Para VII discussion to focus on your single recommended

Strategic Alternative for your case on Harley-Davidson or Volcom.  See the Template for Exhibit 6 that illustrates this method using Olallieberry Pie Company’s (OPC)

recommended strategic alternative – Expand into International Arena by Forging Strategic Alliances.

For Para VII, Implementation, use the following paragraph organization to discuss and describethe details of the programs, budgets and procedures and the who, what,

when ,and how details of the implementing plans.
A.  Corporate Directional Strategy.   Describe the details.
B.  Supporting Business Strategy.    Describe the details.
C.  Supporting Functional Strategies
1. _______ Functional Strategy…describe the details.
2. ________ Functional Strategy…describe the details.
3. ________ Functional Strategy…describe the details.
4.etcetcwith more functional strategies as appropriate/applicable

For Para VIII, Evaluation and Control, use the same paragraph organization to discuss and describe the who, what, when, how, and metrics details of the evaluation and

control plans.
A.  Corporate Directional Strategy.   Describe the details.
B.  Supporting Business Strategy.    Describe the details.
C.  Supporting Functional Strategies
1. _______ Functional Strategy…describe the details.
2. ________ Functional Strategy…describe the details.
3. ________ Functional Strategy…describe the details.
4.etcetcwith more functional strategies as appropriate/applicable

9.   Construct 3 separate corporate scenarios for each of the 3 strategic alternatives in order to develop your 3 Pro forma Income Statements which go in Exhibit 8 as

3 separate tables.

10.   Check out the SA Scoring Checklist above, which I use to score your paper, to make sure you are completing your SA correctly and completely. Also review Lecture

Reading 8.1 in Week 3 for scoring guidance and criteria.

____________________________________________________________

Dropbox Assignment Submission Procedures
To submit to the Dropbox, click on the Dropbox tab at the top of this course content frame. Click on the Submit an Assignment link. Choose the Dropbox Basket titled

Week 4: Assignments/Deliverables. Click the Add Attachments button to browse for the assignment document on your computer that you would like to submit. After

attaching this document, you may add comments to your instructor in the Comments field if you wish, then click the Submit button.

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