Harley-Davidson Drops “More Roads” for “Rewire” Business Plan

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It didn’t last long. Exactly two months after the firing of Matt Levatich as Harley-Davidson’s CEO, the Bar & Shield brand has announced that it is stepping away from the company’s “More Roads Lead to Harley-Davidson” business strategy, for a new plan that is being called “The Rewire”.

As you would expect, the new plan is framed partially by the response to the COVID-19 pandemic that is gripping the world, but Harley-Davidson sees things further down the path as well, saying that the “The Rewire” will be a five-year strategy for the motorcycle maker.

This move comes after a considerable internal battle for control of the Harley-Davidson board of directors, which saw a proxy fight breaking out with Impala Asset Management – one of Harley-Davidson’s largest shareholders.

The fight ended in a truce, with Impala and Harley-Davidson agreeing to add another board seat, of their mutual choosing. Presumably, a part of that peace offering is the new Rewire plan that we now see. 

“COVID-19 has dramatically changed our business environment and it is critical we respond with agility to this new reality. The crisis has provided an opportunity to reevaluate every aspect of our business and strategic plan,” said Jochen Zeitz, Acting President and CEO of Harley-Davidson, in a statement during the Q1 2020 report.

“We have determined that we need to make significant changes to the company; to our priorities, to our operating model and to our strategy to drive more consistent performance as we emerge from this crisis. We will reduce complexity, sharpen focus and increase the speed of decision-making.”

“These efforts will pave the way for a new strategic plan that incorporates some key products and initiatives from the current plan but focuses on improved profitability and long-term growth. As a result, we will emerge as a stronger and more efficient company and reignite the Harley-Davidson soul,” Zeitz finished.

Harley-Davidson hasn’t run all the cable yet for its “Rewired” business plan, which means that mostly the new business strategy is mostly business lingo and good thoughts.

A couple things are clear though, namely that Harley-Davidson plans on returning back to a business strategy that more closely mimics those before the “More Roads” plan that Levatich implemented.

To that end, Harley-Davidson says that it will being reducing complexity, sharpening focus, and increasing the speed of decision making.

Some products and initiatives from the More Roads will remain going forward, likely because they are too far along for Harley-Davidson to abandon them now, but Harley-Davidson has outlined some other items for the Rewire plan, which the company outlines as the following:

Enhance core strengths and better balance expansion into new spaces

  • Return focus to the strength of brand and company, starting with dealers, customers, stronghold products and committed employees globally.
  • Re-evaluate strategies to reach new riders and build ridership.

Prioritize the markets that matter

  • Narrow focus and invest in the markets, products and customer segments that offer the most profit and potential. This includes building on Harley-Davidson’s strong position in the U.S.
  • Establish a simplified market coverage model and take cost out of the process.

Reset product launches and product line up for simplicity and maximum impact

  • Continue to be guided by the voice of customers and dealers to optimize value and profit delivery.
  • Simplify and retime launches to reflect the new reality, align with the start of riding season and better suit the capacity of the company and dealers.
  • Expand profitable iconic motorcycles to excite existing customers. Remain committed to Adventure Touring, Streetfighter and advancing electric motorcycles.

Build the Parts & Accessories and General Merchandise businesses to full potential

  • Develop a comprehensive strategy across P&A and GM businesses that focuses on assortment and distribution opportunities, maximizes channels, improves ecommerce capabilities and grows revenue and margins for both the company and dealers.
  • Align P&A and GM strategies with motorcycle strategy for a holistic presentation to the market.

Adjust and align the organizational structure, cost structure and operating model to reduce complexity and drive efficiency to set Harley-Davidson up for stability and success

  • Create a framework including an organization that is more focused, profitable and nimble; a cost structure that is adjusted to the new realities of the market post crisis; and an operating model designed to increase empowerment and accountability.
  • Establish commercially led central and new regional structures to gain a deeper understanding of customers and to return focus to dealers and selling.
  • Elevate the role of Motorcycle Management and sharpen marketing strategy and execution to enable a bigger impact with an improved go-to-market process.

Harley-Davidson says that it will share more details on its Rewire business plan later this year, during its Q2 report, which we can expect in three months’ time.

Source: Harley-Davidson