Harley Davidson Outputs the Nadler-Tushman Research Paper

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Moreover, the iconic brand helps to drive sales within the heavyweight motorcycle class. The brand also enables Harley to avoid the technology-based competition that many other motorcycle manufacturers engage in, as evidence by the dramatically slower pace of technological innovation at Harley vs. other motorcycle manufacturers. Thus, the reputation attached to the Harley Davidson brand is one of the most important outputs in the organization.

In general, there is a high degree of congruence between these outputs. However, there are some limitations. For example, the strength of the Harley Davidson brand helps to drive sales and market share, but it also creates limitations for the company in terms of expanding revenues by entering new segments. It has also resulted to some degree in an overreliance on the brand to drive profit, causing the company to ignore cost reduction as a means to improve shareholder value. Moreover, while the strength of the brand has to this point allowed Harley to establish a dominant market share, there is no evidence to suggest that it supports the growth of market share. When the company was struggling in the 1980s, the brand was heavily leveraged to improve sales, but improved profits also came with cost reductions. In recent years, the company has been unable to leverage the brand to further market share improvements.

Beyond the brand, there is a high degree of congruence between the other key outputs. Sales growth is a function of both market share growth and of growth in the market. The weakening of Harley's sales in the past couple of years is attributable to not only a decline in the size of the motorcycle market in general but also to declines in market share.

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In some cases, it is reasonable to state that the company could have succeeded despite declines in the size of the market had they been able to improve market share. This is especially the case in 2007, where the decline in revenue from the previous year was minimal.

There is a moderate to high degree of congruence between sales growth and net income. Harley-Davidson has established by virtue of its brand a premium positioning strategy, which has allowed them to use sales growth as a means to enhance shareholder value. However, looking back to the company's recovery period in the 1980s, we can see that sales growth alone does not drive shareholder value to the same extent that sales growth and cost reductions together do. Harley's lack of focus on cost control has reduced the degree of efficiency by which sales growth translates to net income growth.

Overall, Harley Davidson's outputs are relatively congruent with one another. The result is a highly successful organization, with a dominant market share and strong EPS figures. However, the congruence between outputs is not total. When an output is not given priority, such as with operating expenses, the organization's performance is compromised. Additionally, the brand strength at times hinders sales growth, and discourages focus on improving net income from the cost side. This deviation from ideal congruence has contributed to disappointing performance over the last couple of years, in particular from the company's inability to diversify away from dependence on the heavyweight motorcycle market.

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