Question: Harley Davidson Inc is one of the world s most well recognized
Harley-Davidson Inc. is one of the world’s most well recognized companies because of its famous motorcycles—often referred to as “Hogs” by bike enthusiasts. During most of the 1990s, Harley motorbikes were in short supply, so Harley’s 600 independent dealers had no trouble moving the bikes out the door almost as soon as they arrived from the factory—often at prices higher than the sticker price. But by 2001, just around the 100th anniversary of Harley-Davidson, things began to slow down, reflecting the stagnant economy. Bikes were not rolling out of the dealer showrooms as fast, and in fact, inventories in dealerships all over the country were starting to grow even though some of the bikes were offered at substantial discounts. Yet even in the face of slowing sales to consumers, Harley-Davidson was able to show an annual sales increase of over 25 percent. How was this possible? Harley was booking shipments of the bikes to dealers as if they were final sales to customers. Many of the dealers were very unhappy with this practice, often referring to it as “channel stuffing”—loading up the dealers with inventory that outstrips final customer demand to give the appearance of sales growth. Are the dealers just being “crybabies” in accusing Harley-Davidson of channel stuffing? Is this just one-way channel partnership with the dealers being fair-weather friends? Discuss.
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