Question

financial strength of Harley Davidson

Answer 1

Harley Davidson has gained a stable financial position in the motor vehicle industry by becoming the largest international retail motorcycle supplier with sales spread all over the world. The brand has achieved all its financial milestones through achieving sales targets and constant growth. The major source of its financial strength is its global strategy and business in Asian and European markets which have proved to be a great source of strengthening its position in foreign markets by capturing market share and customer base. The markets of Europe and Asia are penetrated by company thus gaining huge profits with the help of increasing demand for its products with minimum competition. The aggressive marketing strategy of Harley Davidson has acted as a major advantage for attracting profits from both local as well as its foreign markets.

The average turnover of the company in the current scenario is over $5315.4 million among which cash from operations has soared as high as $200 million. It has doubled its earnings since 2017 and its revenue chart shows an incremental increase over the period of past 7 years. The major contributor of the financial strength of company is the decisive management, cost benefit analysis and comparative advantage which has helped the business to undertake strategies which enable it to gain maximum return from its investments. The annual return from its investments for the financial period of 2018-2019 was reported to be 5.6 % greater than previous year and 2.7 % higher than its direct competitors. During the year 2018 it repurchased its $382 million of shares and paid dividends summing upto $1.48 per share, up 1.4 percent versus prior year.

Another great factor behind such financial strength of the company is its value preposition, brand equity and good will which has helped it to maintain a very descent position in the customer base and regulatory authorities. The credit score of the company is 660 thus te ds to fall in good credit range which acts as beneficial for getting instant credit.

The business has set its locations very wisely, near the factors of production to minimise its operational costs and it uses latest technologies for efficiently utilising its resources to maximum level to achieve economies of scale. The cost effectiveness, minimisation of scrap and defects is another factor behind its finance strength. Quality improvement department makes sure that no defect policy is followed. Customer retention and loyalty also contributes to the financial strength of company.

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