Case_In_Point_7th_Edition_Page001_183_2

Luckily she knows that this “let me tell you why you’re wrong” business is just a test. She keeps her
emotions in check and does what the interviewer wants her to do, stick with and defend her answer.
Student: You make an interesting argument; however, I don’t find it compelling enough. I can’t believe
that you can do all that within an 18-month period. Therefore, I think the best option in these economic
conditions would be to keep the price the same.
Interviewer: Okay, good. Give me two long-term, revenue-based ideas and two long-term, cost-based
ideas.
Student: Can I take a moment to jot some ideas down?
Interviewer: Certainly.
Student: Okay. On the revenue-based side, the first thing I’d do is come up with a new bike that is
geared not only towards women but to younger men as well. This will give us something to market to
women besides garb. I’d also look to see if we can acquire a scooter company. We couldn’t put the
Harley name on it, but we can take advantage of the fastest growing segments of the market, women
and scooters. Besides, there will be a number of synergies we would be able to take advantage of. On
the cost side, we were concerned about the price of steel. We can buy some steel futures to hedge
against a steel increase. We could stockpile some steel at the current price, and because we are
developing a new bike, we can make more parts out of composites instead of steel. We could
modernize the plant with new technologies and maybe have some parts made overseas.
Interviewer: Good. Why don’t you take a moment and summarize the case for me.
Student: Our client is Harley-Davidson. Their stock dropped around 10% on news of declining profits.
We looked at external factors first and determined that it was more of a Harley problem than an industry
problem. They are out of step with the two fast growing segments of the industry, women and scooters.
So we came up with some short-term and long-term strategies both on the revenue and cost side. An
example of a short-term, revenue-based strategy is offering low financing to customers. On the cost
side, we could refinance our debt. In the long-term we would produce a new bike geared towards
women and younger men and acquire a scooter maker. On the cost side, we could hedge steel prices
and have certain new parts made out of composite instead of steel. If Harley follows these strategies as
well as some of the others we talked about, they should be on their way to higher profits in 24 to 36
months.
AnaIysis: She came on very strong at the end. The turning point was when she defended her decision
to keep the price the same. That gave her additional confidence, and it showed through the rest of the
interview.