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Business Makeover: Harley-Davidson

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If it's broke, fix it.

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Falling short of Wall Street's expectations, Harley-Davidson's (HOG) third-quarter earnings dropped 37% to $166.5 million (earnings totaled $265 million in the same period last year). Adding insult to injury, CEO Jim Ziemer said the future of the global economy will effectively work against his company.

With such a bleak outlook, how can Harley shift profits from first to fifth without stalling out?

For some, the Harley-Davidson brand still conjures dirty outlaws on the open road. Transform that tarnished image by releasing current data on the company's actual customer profile: Upper-middle class suburban white guys with a median age of 47.

The trademark growl of the V-twin engine -- said to resemble somebody saying "potato-potato" -- can be too raucous for more demure bikers. Modify the engine to produce a sound more similar to a British aristocrat's pronunciation of "potato-potato."

"Born to Be Wild" and "Highway to Hell" are played out as motorhead anthems. In the next advertising campaign, give "Ain't No Stoppin' Us Now" by McFadden and Whitehead a whirl.

From mugs to belt buckles to Christmas-tree ornaments, Harley merchandise has been spread much too thin to be profitable. Limit products to bikes, jackets and the all-important teddy bears in leather vests.

The late Evel Knievel's infamous, death-defying stunts, performed on his Harley-Davidson XR-750, are now a distant memory. Introduce a line of red-white-and-blue stunt bikes aimed at the lucrative daredevil market.

Product placement can be effective - but try to at least find a film better than Wild Hogs in which to feature your wares.

No positions in stocks mentioned.
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