American Motorcycle Dealer AMD 251 June 2020 | Page 12

The 'Rewire'
The following is the framework
for the replacement of the
'More Roads' Strategic Plan –
the 'Rewire' that acting
President/CEO Jochen Zeitz
outlined with the Q1 financial
release on March 28 …
The company is executing a set of
actions, referred to as The Rewire, that
will be further developed over the
coming months, leading to a new
strategic plan.
These actions are part of a
comprehensive 'Rewire' playbook
designed to address top priority
opportunities, drive consistent
execution and reset the company's
operating model in order to reduce
complexity, sharpen focus and
increase the speed of decisionmaking.
The company expects the 'Rewire'
actions - those already taken and those
that will be implemented over the
coming months - to lead to the
definition of a new 5-year strategic
plan that will incorporate key products
and initiatives from the 'More Roads'
plan, but will focus more on the
markets and products that can drive
performance in terms of profitability
and growth.
Key elements of the 'Rewire':
• 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 the riding season to 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 e-commerce 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-tomarket
process.
• Each of these key elements of the
'Rewire' playbook includes actions
that have been implemented or are
currently being developed. The
company plans to share more about
the 'Rewire' in its Q2 update.
>
on assortment and distribution
opportunities, maximizes its channels,
improves e-commerce capabilities and
gross revenues and margins for both
the company and dealers. We will align
this strategy with our Motorcycle
strategy for realistic presentation to
the market.
And finally, we’ll adjust and align our
're-evaluate our
strategies to reach
new riders and build
ridership'
organization structure, cost structure
and operating model to set the
organization up for stability and
success. We are designing a
framework for success, an
organization that is more focused and
nimbler, aligned with an appropriate
cost structure adjusted to the new
realities of the market post crisis.
We will also reset our operating model
to increase empowerment, diversity
and accountability for critical
decisions. Essentially our refreshed
organization would be less complex
with a sharper focus and able to make
faster decisions.
We are creating the right central and
new regional structures that have
commercially led to establish the right
focus on dealers and selling. We will
also elevate the role of Motorcycle
Management within the organization
and sharpen our marketing strategy
and execution to enable a bigger
impact with an improved go-tomarket
process.
The Rewire is underway and we've
taken actions across each of these key
elements of the playbook, and more
are in development. I've mentioned
some of the significant actions that
we've already taken to allow the
organization to move forward. Other
recent actions include setting the
organizational superstructure with
three new senior management
members appointed to key roles.
We are promoting talented
people who know the company,
our dealers and our customers. To
bring the appropriate sales focus, we
have created a new commercial entity,
including a simplified regional sales
structure, as well as refreshed Parts &
Accessories and General Merchandise
businesses.
To leverage expertise and a historical
insight as we hone our strategy, I've
engaged our senior leaders beyond
the executive team and established
a CEO Roundtable comprised of
select dealers and former Harley-
Davidson leaders.
To accomplish what lies ahead, it is
important that we continue to rally
together. Today we are united as a
Harley-Davidson global community in
support of our families, friends and
fellow riders through a time of crisis
that we hope will end soon. I offer my
gratitude to our family of employees,
dealers and riders for doing their part
to stay safe and healthy. Their wellbeing
is above all the most important
thing."
Rumors - 20% Fewer
Variants, Less Paint
Zeitz has excessive special edition
paint jobs and multiple colorways in his sights.
Jochen Zeitz openly discussed needing to break the habit of "over-committing
and under-delivering", to "set achievable plans and realistic goals" and
highlighted needing to refocus on a new strategy to "better align with our
capacity and capabilities."
While he intends to continue to "expand beyond traditional products and
markets," he is clearly aware that not all models are equal in terms of their
production overhead and profit, with "profit is lagging" and "expectations
unreasonable."
One aspect of Dr Zeitz' patented medicine appears likely to be a rationalization
of the existing product range to make room for the new models - the Bronx
and Pan America in particular.
One rumor doing the rounds is of an across the board 20% cut in the number
of individual bike models, with the slowest sellers disappearing and certain
designs being selected for early retirement! The FXDRS appears to be at the
front of the list of potential casualties, and we also hear that there is to be a
"fire in the paint shop" with the number of colorway options for any given
model being dramatically reduced.
The FXDRS could be a casualty.
12 AMERICAN MOTORCYCLE DEALER - JUNE 2020 www.AMDchampionship.com