Submitted by: Submitted by dsp166
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Category: Business and Industry
Date Submitted: 05/06/2010 08:47 AM
In analyzing the Motorcycle case, address all of the following questions:
1. Describe the market in 1958.
Earlier, the market had been served mainly by Harley-Davidson of the U.S.; BSA, Triumph, and Norton of the U.K.; and Moto-Guzzi of Italy. Harley was the market leader in 1959, with sales of $16.6 million.
In that year the first two Japanese producers, Honda Motor Company and Yamaha Motor Company, entered the American market. The Japanese motorcycle industry had expanded rapidly since World War 11 to meet the need for cheap transportation. In 1959, Honda, Suzulu, Yamaha, and Kawasaki together produced some 450,000 motorcycles. With sales of $55 million in that year, Honda was already the world's largest motorcycle producer.
In contrast to other foreign producers, who relied on distributors, Honda established a U.S. subsidiary, American Honda Motor Company, and began its push in the U.S. market by offering very small lightweight motorcycles.
The transformation and expansion of the motorcycle market during the early 1960s benefited British and American producers as well as the Japanese. British exports doubled between 1960 and 1966, while Harley-Davidson's sales increased from $16.6 million in 1959 to $29.6 million in 1965.
2. Describe the market in 1975.
In short, by the mid-1970s the Japanese producers had come to dominate a market shared by European and American producers 20 years earlier. More than 100 American companies had manufactured motorcycles at one time or another during the twentieth century. One by one these firms vanished; three of them-Rupp Industries, Yankee Motor Company, and Fox Corporation ceased production in 1973-74. In mid-1975 only Harley-Davidson and one other very small producer, Rokon of Keene, N.H., remained.
A 1974 Yamaha dealership survey showed that average dealership net worth was about 14% of sales. Profit before tax averaged 35.3'/0 of net worth and return on sales was 5.1%. On average, inventory was turned over four...