Harley-Davidson, Inc. (HOG): Business Model Canvas [10-2024 Updated]

Discover the intricacies of Harley-Davidson, Inc.'s (HOG) business model through the lens of the Business Model Canvas. From their iconic motorcycles to their vibrant community, Harley-Davidson leverages a robust network of key partnerships and value propositions that resonate with a diverse customer base. Explore how they maintain their legendary status in the motorcycle industry while innovating for the future, particularly with electric models. Dive deeper into the elements that make Harley-Davidson a unique and enduring brand.

Harley-Davidson, Inc. (HOG) - Business Model: Key Partnerships

Dealers and distributors for motorcycle sales

Harley-Davidson relies heavily on a network of approximately 1,400 dealers globally to sell its motorcycles. In the third quarter of 2024, the company reported motorcycle shipments of 27,520 units, a decrease of 39% compared to the previous year. The North American market accounted for 24,573 units, reflecting a 10% decline year-over-year. Dealers play a crucial role in managing inventory levels and responding to customer demand, which has been impacted by economic conditions and high interest rates.

Supplier relationships for components and materials

Harley-Davidson maintains strategic partnerships with various suppliers to secure essential components for its motorcycle production. In Q3 2024, the company reported revenue from parts and accessories at $174 million, down 6% year-over-year. The company faces challenges related to raw material prices and supply chain disruptions, which have necessitated ongoing adjustments in procurement strategies.

Partnerships with financial institutions for financing options

Harley-Davidson Financial Services (HDFS) collaborates with multiple financial institutions to offer financing solutions for customers. In Q3 2024, HDFS reported revenues of $269 million, up 10% from the previous year, and operating income increased by 29% to $77 million. This growth is attributed to higher interest income and improved credit loss provisions, which are crucial for supporting customers in financing their motorcycle purchases.

Collaboration with LiveWire for electric motorcycle development

Harley-Davidson has a strategic partnership with LiveWire, focusing on the development of electric motorcycles. In Q3 2024, LiveWire reported electric motorcycle unit sales of 99, nearly double the 50 units sold in the previous year. Despite a revenue decline of 41% to $5 million, the collaboration aims to enhance Harley-Davidson's position in the electric vehicle market amidst growing consumer interest in sustainable mobility solutions.

Licensing agreements for merchandise and branded content

Harley-Davidson generates additional revenue through licensing agreements for merchandise and branded content. In Q3 2024, the licensing revenue dropped to $3.9 million, a 59% decline compared to the previous year. The company leverages its iconic brand to create a diverse range of products, enhancing brand visibility and customer loyalty.

Partnership Type	Details	Financial Impact (Q3 2024)
Dealers and Distributors	Approximately 1,400 dealers globally	Shipments: 27,520 units (down 39% YoY)
Supplier Relationships	Partnerships for essential components	Parts & Accessories Revenue: $174M (down 6% YoY)
Financial Institutions	Collaboration for financing solutions	HDFS Revenue: $269M (up 10% YoY)
LiveWire Collaboration	Development of electric motorcycles	Unit Sales: 99 (up 98% YoY), Revenue: $5M (down 41% YoY)
Licensing Agreements	Merchandise and branded content	Licensing Revenue: $3.9M (down 59% YoY)

Harley-Davidson, Inc. (HOG) - Business Model: Key Activities

Manufacturing motorcycles and related products

Harley-Davidson manufactures a range of motorcycles including the Grand American Touring, Cruiser, Sport, and Lightweight models. In the third quarter of 2024, Harley-Davidson Motor Company (HDMC) shipped a total of 27,520 motorcycles, a decline of 39% compared to 45,269 units shipped in the same quarter of 2023. The revenue generated from motorcycle sales in Q3 2024 was $615.6 million, down from $1,023.1 million in Q3 2023, reflecting a 40% decrease. The cost of goods sold has also been impacted, with gross profit for motorcycles reported at $264 million.

Marketing and brand management initiatives

Harley-Davidson's marketing strategy emphasizes brand loyalty and community engagement. The company holds events to strengthen customer relationships and enhance brand visibility. Despite a challenging retail environment, Harley-Davidson achieved a U.S. Touring market share of 75% in 2024, an increase of 4 percentage points year-over-year. Marketing expenditures remain significant, contributing to brand management and promotional activities, although specific figures for marketing expenses are not disclosed separately.

Research and development for new models and technologies

In 2024, Harley-Davidson continues to invest in research and development to innovate and expand its motorcycle lineup, including electric models under the LiveWire brand. The company anticipates capital investments between $225 million and $250 million for the year. The LiveWire segment reported electric motorcycle unit sales of 99 in Q3 2024, representing a 98% increase from 50 units in the same quarter of 2023. This focus on R&D is crucial for maintaining competitive advantage and addressing evolving market demands.

Dealer training and support programs

Harley-Davidson places a strong emphasis on dealer training and support to ensure effective sales and service of its products. The company provides resources and training programs to enhance the capabilities of its dealers, which is vital for sustaining sales performance. Dealer support initiatives are part of Harley-Davidson’s broader strategy to maintain strong relationships with its dealer network, although specific financial allocations for these programs are not publicly detailed.

Customer engagement through events and community outreach

Harley-Davidson actively engages with its customer base through various events, rides, and community outreach initiatives. This engagement is designed to foster a sense of community among riders and enhance brand loyalty. In Q3 2024, global retail motorcycle sales were down 13% year-over-year, indicating the need for stronger customer engagement strategies to counteract declining sales. The company’s commitment to community and customer relations is reflected in its promotional activities and brand events, although specific metrics for engagement success are not provided.

Key Activity	Q3 2024 Performance	Q3 2023 Performance	Change (%)
Motorcycle Shipments	27,520 units	45,269 units	-39%
Motorcycle Revenue	$615.6 million	$1,023.1 million	-40%
LiveWire Electric Motorcycle Sales	99 units	50 units	+98%
U.S. Touring Market Share	75%	71%	+4%

Harley-Davidson, Inc. (HOG) - Business Model: Key Resources

Strong brand reputation and heritage

Harley-Davidson is renowned for its strong brand reputation, which is built on over a century of heritage. The brand is synonymous with freedom and rugged individualism, appealing to a loyal customer base. In 2024, Harley-Davidson maintained a U.S. market share of 75% in the Touring motorcycle segment, reflecting its dominance in this category.

Manufacturing facilities and supply chain network

Harley-Davidson operates several manufacturing facilities, including plants in Wisconsin and Pennsylvania, which are crucial for producing motorcycles and parts. As of September 30, 2024, the company reported inventories of $681.9 million, down from $768.8 million in the previous year. The supply chain network has faced challenges, notably due to global disruptions, but remains critical for maintaining production efficiency.

Skilled workforce and engineering talent

The company relies on a skilled workforce, particularly in engineering and manufacturing roles. Harley-Davidson has emphasized the importance of retaining and attracting skilled labor to innovate and improve product offerings. As of 2024, the company has reported ongoing investments in training and development programs to enhance workforce capabilities.

Intellectual property, including patents and trademarks

Harley-Davidson holds significant intellectual property, including numerous patents and trademarks that protect its innovations and brand identity. This intellectual property portfolio is essential for maintaining competitive advantage and driving brand loyalty. The enforcement of these rights is a key focus for the company to safeguard its market position.

Financial services division for consumer financing

Harley-Davidson Financial Services (HDFS) provides critical financing solutions for customers purchasing motorcycles. In Q3 2024, HDFS generated revenue of $269.5 million, an increase of 10% year-over-year. The operating income from HDFS rose 29% to $77 million, demonstrating the division's importance in supporting motorcycle sales and enhancing customer accessibility.

Key Resource	Description	2024 Financial Data
Brand Reputation	Strong heritage and market presence	U.S. Touring market share: 75%
Manufacturing Facilities	Production plants in Wisconsin and Pennsylvania	Inventories: $681.9 million
Skilled Workforce	Emphasis on engineering and manufacturing talent	Ongoing investments in training
Intellectual Property	Patents and trademarks for innovations	Protected brand identity
Financial Services	Consumer financing solutions	HDFS Revenue: $269.5 million; Operating Income: $77 million

Harley-Davidson, Inc. (HOG) - Business Model: Value Propositions

Iconic motorcycle design and performance

Harley-Davidson is recognized for its iconic motorcycle design and high-performance engines. The company maintains a significant market share, with a reported U.S. Touring market share of 75% in 2024, reflecting an increase of 4 share points year-over-year . The design and engineering of Harley-Davidson motorcycles emphasize both power and aesthetics, appealing to a broad range of motorcycle enthusiasts.

Customization options for personalization

Harley-Davidson offers extensive customization options for its motorcycles, allowing customers to personalize their bikes to fit their unique style. This includes a range of parts and accessories, which generated $174.3 million in revenue for the third quarter of 2024, despite a 6% decline from the previous year. This customization capability enhances customer satisfaction and loyalty.

Strong community and lifestyle brand identity

The company fosters a strong community and lifestyle brand identity that resonates with its customers. Harley-Davidson enthusiasts often participate in events and rallies, creating a sense of belonging and community. This brand loyalty is reflected in the company's ability to maintain a strong customer base, even amidst fluctuating sales figures. In the third quarter of 2024, Harley-Davidson's global retail motorcycle sales decreased by 13%, indicating challenges but also showcasing the resilience of its brand.

High-quality parts, accessories, and apparel

Harley-Davidson's commitment to high-quality parts, accessories, and apparel is evident in its revenue streams. Apparel sales reached $55.7 million in the third quarter of 2024, marking a 13% increase from the previous year. This growth in apparel sales highlights the brand's strong market presence beyond motorcycles, offering customers a complete lifestyle experience.

Commitment to innovation, including electric motorcycles

Harley-Davidson is actively pursuing innovation in its product offerings, particularly with the introduction of electric motorcycles through its LiveWire brand. In the third quarter of 2024, LiveWire sold 99 electric motorcycles, a significant increase of 98% compared to the previous year. The company's focus on electric mobility aligns with growing consumer demand for sustainable transportation options, positioning Harley-Davidson as a forward-thinking leader in the motorcycle industry.

Value Proposition	Details	Q3 2024 Revenue
Iconic Motorcycle Design	U.S. Touring market share of 75%	N/A
Customization Options	Extensive parts and accessories for personalization	$174.3 million
Community & Lifestyle Identity	Brand loyalty through events and rallies	N/A
High-Quality Apparel	Revenue growth in apparel sales	$55.7 million
Innovation in Electric Motorcycles	LiveWire electric motorcycle sales	N/A

Harley-Davidson, Inc. (HOG) - Business Model: Customer Relationships

Engaging customer community through events and rallies

Harley-Davidson actively engages its customer community through various events and rallies. In 2024, the company hosted over 30 major events worldwide, including the highly anticipated Sturgis Motorcycle Rally, which attracted more than 500,000 attendees. These gatherings not only foster community among riders but also drive merchandise sales, with apparel revenue increasing by 13% to $56 million in Q3 2024.

Loyalty programs for repeat customers

The company has implemented loyalty programs aimed at retaining repeat customers. Harley-Davidson's H.O.G. (Harley Owners Group) membership boasts over 1 million members globally, providing exclusive benefits such as access to special events, discounts on merchandise, and tailored experiences. In 2024, approximately 45% of motorcycle sales were attributed to repeat customers, highlighting the effectiveness of these loyalty initiatives.

Customer feedback loops for product development

Harley-Davidson employs customer feedback loops to enhance product development. In the first nine months of 2024, the company conducted over 15 customer feedback sessions, gathering insights from more than 2,000 participants on new motorcycle models. This consumer-driven approach has led to a 10% increase in customer satisfaction ratings for new models launched in 2024.

After-sales support and maintenance services

After-sales support remains a cornerstone of Harley-Davidson's customer relationship strategy. The company reported a 20% increase in service revenue, totaling $174 million in Q3 2024. Harley-Davidson offers comprehensive maintenance packages and warranties, which have contributed to a 30% retention rate for service customers over the past year.

Digital platforms for customer interaction and sales

Harley-Davidson has embraced digital platforms to enhance customer interaction and streamline sales processes. In 2024, online sales accounted for 25% of total merchandise revenue, with a significant uptick in digital engagement—over 1.5 million users visited the Harley-Davidson website monthly. Additionally, the company launched a mobile app that allows customers to schedule service appointments, access exclusive content, and purchase merchandise, further bridging the gap between the brand and its customers.

Metric	Q3 2024	Q3 2023	Change (%)
Revenue from Apparel	$56 million	$49 million	+13%
H.O.G. Membership	1 million+ members	980,000 members	+2.04%
Service Revenue	$174 million	$145 million	+20%
Online Sales Revenue	25% of total merchandise	20% of total merchandise	+5%
Customer Satisfaction Rating	10% increase	n/a	n/a

Harley-Davidson, Inc. (HOG) - Business Model: Channels

Direct sales through dealerships and online platforms

Harley-Davidson primarily utilizes a network of authorized dealerships for direct sales. As of Q3 2024, the company reported U.S. motorcycle shipments of 15,850 units, a decrease from 30,167 units in the same quarter of 2023. The online platform has become increasingly important, with e-commerce capabilities allowing customers to purchase merchandise directly from the Harley-Davidson website.

Retail presence in branded stores and events

Harley-Davidson maintains a strong retail presence through its branded stores and merchandise events. The company operates both company-owned and franchised dealerships, providing a comprehensive retail experience. In Q3 2024, Harley-Davidson generated revenue of $876 million, down from $1.297 billion in Q3 2023. Events such as the annual Sturgis Motorcycle Rally serve as significant touchpoints for customer engagement and brand visibility.

Partnerships with third-party retailers

In addition to its dealerships, Harley-Davidson partners with various third-party retailers to expand its market reach. These partnerships help distribute apparel and accessories, contributing to the apparel revenue of $55.7 million in Q3 2024, which is an increase from $49.3 million in Q3 2023. This strategy enhances brand accessibility and taps into different customer segments.

Digital marketing and social media outreach

Harley-Davidson leverages digital marketing strategies and social media outreach to connect with customers. The company’s marketing initiatives focus on engaging younger riders through platforms like Instagram and Facebook. In Q3 2024, Harley-Davidson's marketing efforts contributed to a slight increase in apparel sales, signaling the effectiveness of these channels.

Participation in motorcycle shows and expos

Harley-Davidson actively participates in motorcycle shows and expos, which serve as channels for showcasing new models and engaging with potential customers. The company’s presence in events like the Motorcycle Industry Council’s annual show helps maintain brand visibility and customer interaction. The decline in global motorcycle shipments in Q3 2024 to 27,520 units from 45,269 units in Q3 2023 reflects the competitive environment in which these events play a crucial role.

Channel Type	Details	Q3 2024 Performance
Direct Sales	Authorized dealerships and online purchases	15,850 units shipped in the U.S.
Retail Presence	Company-owned and franchised dealerships	$876 million in revenue
Third-Party Retailers	Partnerships for apparel and accessories	$55.7 million in apparel sales
Digital Marketing	Engagement through social media platforms	Increased apparel sales
Expos and Shows	Participation in industry events	27,520 global shipments

Harley-Davidson, Inc. (HOG) - Business Model: Customer Segments

Motorcycle enthusiasts and collectors

Harley-Davidson targets motorcycle enthusiasts and collectors who value the brand's heritage and craftsmanship. This segment is characterized by a strong loyalty to the Harley-Davidson brand and often participates in events, rallies, and motorcycle shows. In 2024, Harley-Davidson reported that approximately 60% of its sales were attributed to repeat customers, many of whom belong to this segment. The company also engages this group through exclusive events and limited-edition models.

First-time motorcycle buyers

First-time motorcycle buyers represent a significant customer segment for Harley-Davidson. The company has tailored entry-level models, such as the Harley-Davidson Street series, to attract new riders. In Q3 2024, Harley-Davidson reported that the Street series accounted for 15% of total motorcycle shipments. The average selling price for entry-level models is around $7,000, making them accessible to younger riders who are new to the market.

Adventure and touring riders

This segment includes riders who seek long-distance touring experiences. Harley-Davidson has developed models like the Road Glide and Ultra Limited to cater to this demand. In 2024, the Grand American Touring segment saw motorcycle shipments totaling 80,194 units globally. The average price for these touring models is approximately $25,000, reflecting the premium features designed for comfort and performance during extended rides.

Urban commuters interested in electric options

With the rise of urban commuting, Harley-Davidson is focusing on electric motorcycles to appeal to environmentally conscious consumers. The LiveWire model was introduced as a premium electric motorcycle option. In Q3 2024, LiveWire reported electric motorcycle unit sales of 99 units, representing a 98% increase year-over-year. The company aims to sell between 600 to 1,000 LiveWire units in 2024, reflecting its commitment to expanding this customer base.

Lifestyle consumers seeking branded apparel and accessories

The lifestyle consumer segment is increasingly important for Harley-Davidson, focusing not only on motorcycles but also on branded apparel and merchandise. In Q3 2024, Harley-Davidson's apparel revenue reached $55.7 million, up 13% from the previous year. The company offers a wide range of products, including jackets, t-shirts, and accessories that resonate with the motorcycle culture and lifestyle.

Customer Segment	Key Models/Products	2024 Sales/Shipments	Average Price
Motorcycle enthusiasts and collectors	Limited-edition models	60% of sales attributed to repeat customers	Varies (Premium Pricing)
First-time motorcycle buyers	Harley-Davidson Street series	15% of total shipments	$7,000
Adventure and touring riders	Road Glide, Ultra Limited	80,194 units	$25,000
Urban commuters interested in electric options	LiveWire	99 units sold	$22,000
Lifestyle consumers seeking branded apparel	Apparel and accessories	$55.7 million revenue	Varies

Harley-Davidson, Inc. (HOG) - Business Model: Cost Structure

Manufacturing and assembly costs

For the third quarter of 2024, Harley-Davidson reported a gross profit of $263.8 million, down from $410.7 million in the same quarter of 2023. The decline in gross profit was attributed to a 39% decrease in motorcycle shipments, which totaled 27,520 units compared to 45,269 units in Q3 2023. Manufacturing costs, impacted by lower production volumes and unfavorable product mix, have led to a gross margin of 30.1%, down from 31.7% year-over-year.

Research and development expenses

Harley-Davidson's total R&D expenses for the first nine months of 2024 were approximately $142 million. This represents a commitment to innovation, particularly in the electric motorcycle segment, which is a key focus area as they seek to enhance their product offerings and maintain competitiveness in the evolving market.

Marketing and advertising expenditures

In the third quarter of 2024, Harley-Davidson's selling, administrative, and engineering expenses totaled $208.7 million, down from $235.4 million in Q3 2023, reflecting a strategic reduction in marketing and advertising costs amid declining revenues. The company has faced challenges in maintaining customer engagement, particularly in the face of a 13% decline in global retail motorcycle sales.

Dealer support and training costs

Harley-Davidson provides robust support to its dealer network, which includes training and development programs. The exact financial allocation for dealer support is not publicly detailed, but the reduction in overall operating expenses suggests a tighter budget for dealer-related expenditures. The company continues to emphasize the importance of dealer performance in driving sales, contributing to their overall cost structure management.

Operational costs of Harley-Davidson Financial Services

Harley-Davidson Financial Services (HDFS) reported operational expenses of $192.7 million for Q3 2024, compared to $184.6 million in Q3 2023. The increase is primarily due to higher interest income and a lower provision for credit losses, despite increased borrowing costs. HDFS operating income rose to $76.7 million, up 29% year-over-year, indicating effective management of operational costs relative to revenue growth.

Cost Category	Q3 2024 Amount (in millions)	Q3 2023 Amount (in millions)	Change
Gross Profit	$263.8	$410.7	-35.6%
R&D Expenses	$142	N/A	N/A
Marketing & Advertising	$208.7	$235.4	-11.4%
Dealer Support & Training	N/A	N/A	N/A
HDFS Operational Costs	$192.7	$184.6	+6.1%

Harley-Davidson, Inc. (HOG) - Business Model: Revenue Streams

Sales of motorcycles and parts

In the third quarter of 2024, Harley-Davidson Motor Company (HDMC) reported total revenue of $876 million, down from $1,297 million in the same quarter of 2023, representing a decline of 32%. Specifically, motorcycle sales generated $616 million, a decrease of 40% from $1,023 million year-over-year. Parts and accessories contributed $174 million, down 6% from $185 million in the prior year.

Revenue Source	Q3 2024 (in millions)	Q3 2023 (in millions)	Change (%)
Motorcycles	$616	$1,023	-40%
Parts & Accessories	$174	$185	-6%
Total HDMC Revenue	$876	$1,297	-32%

Financing income from Harley-Davidson Financial Services

Harley-Davidson Financial Services (HDFS) reported revenue of $269 million in Q3 2024, an increase of 10% from $244 million in Q3 2023. The operating income for HDFS was $77 million, a 29% increase from $59 million year-over-year, driven by higher interest income and a lower provision for credit losses.

Revenue from apparel and accessories

Apparel revenue increased by 13% in Q3 2024, totaling $56 million compared to $49 million in Q3 2023. For the nine-month period ending September 30, 2024, apparel revenue amounted to $183 million, slightly down from $187 million in the same period last year.

Revenue Source	Q3 2024 (in millions)	Q3 2023 (in millions)	Change (%)
Apparel	$56	$49	+13%

Licensing fees from branded products

Licensing revenue for Harley-Davidson decreased significantly by 59% in Q3 2024, generating $4 million compared to $10 million in Q3 2023. Year-to-date, licensing revenue totaled $18 million against $21 million during the same timeframe in 2023.

Revenue Source	Q3 2024 (in millions)	Q3 2023 (in millions)	Change (%)
Licensing	$4	$10	-59%

Revenue from events and experiences related to the brand

While specific revenue figures for events and experiences were not detailed in the financial report, Harley-Davidson has continued its focus on creating brand experiences through events such as the annual Sturgis Motorcycle Rally and various riding experiences, which are integral to maintaining customer engagement and brand loyalty. These activities contribute indirectly to revenue through increased motorcycle and merchandise sales.

Article updated on 8 Nov 2024

Resources:

1. Harley-Davidson, Inc. (HOG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Harley-Davidson, Inc. (HOG)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Harley-Davidson, Inc. (HOG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.