Case_In_Point_7th_Edition_Page001_183_2

Interviewer: Yes, garb is merchandise. For Year 1, domestic motorcycles made up 45%, international
40%, replacement parts 10% and garb, 5%. For Year 2, domestic motorcycles made up 35%,
international 40%, replacement parts 15% and garb, 10%. I’d like you to look at those numbers and how
they changed over the last year, and in four sentences or less tell me what’s going on with Harley
customers.
While the interviewer was stating those numbers the student was making a chart. The student wrote
down the following chart.
Revenue Streams Y1 Y2
Domestic 45% 35%
International 40% 40%
Replacement parts 10% 15%
Garb 5% 10%
Student: It looks as if Harley customers are buying fewer new bikes, fixing up their old bikes and buying
some garb to make themselves feel good and look bad.
Interviewer: (smiles)
AnaIysis: She did a great job. She kept it to one sentence and added a little humor to the interview as
well.
Interviewer: Okay, good. Let’s talk about costs.
Student: Before we do, can I ask about volume? Do we have any numbers on volume of bikes sold?
Interviewer: I do. In Year 1 Harley sold 350,000 bikes and in Year 2 they sold 330,000 bikes.
Students: Thanks.
AnaIysis: Good move on the student’s part. Volume is part of revenue so asking for that number was
appropriate and she scored some points.
Student: What are the major costs, both fixed and variable, and how have they changed over time?
Interviewer: The only cost you need to worry about is the cost of steel. We are in the middle of a steel
contract that expires in 24 months. We currently have a good deal, but we are concerned about getting
slammed with high steel costs in 24 months as the economy improves. I just want you to keep that in the
back of your mind.
What I’d like you to do now is to come up with some short-term strategies that will help turn Harley
around. By ‘short term,’ I mean 18 months or less.
Student: Okay. The first thing they should do is market to women.
Interviewer: What would they market?
Student: They could design a new bike...
Interviewer: It is going to take more than 18 months to design, manufacture and distribute a new bike.