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post #1 of 9 (permalink) Old 04-02-2001, 05:35 PM Thread Starter
 
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Question

Hey guys. I've got a paper coming up in my microeconomics class in about two weeks (i think...gotta love finals time, i cant keep track of anything anymore). Our professor is letting us do our papers on anything we want, as long as we can relate it to economics. I, of course, wanted to do something about bikes. Its a pretty basic, first year course, so it wouldnt be anything too in-depth. I think all she wants to see is us examine something that changed a market factor (demand, supply, quantity demanded, quantity supplied, profit, loss, all that good stuff). I dont have the handout on me now, but i'll find it later and post what i really need to do. For now, any ideas you guys have would be really appreicated. seems like this actually might be a fun paper. - matt
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post #2 of 9 (permalink) Old 04-02-2001, 06:26 PM
 
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Lightbulb IDEA No. 1

You could do the paper on supply and demand and the resultant shift in consumer level prices. A great example is the Ducati Replacement parts industry. The demand has skyrocketed in recent years, primarily due to Paul.

Accordingly all the prices have been dropping like rain in Seattle. Cool Beans!
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post #3 of 9 (permalink) Old 04-03-2001, 11:15 AM
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Matt,
As it is a micro-economics class, you certainly could focus on a single company. I think a no-brainer would be Harley Davidson and the inelasticity of the demand curve for their products. Even as they have increased supply of the product through the opening of the KC plant, coupled with intense increases in supply from both clone assemblers and the Japanses industry, Harley (NYSE ticker HDI) has nailed 15 consecutive profitable quarters (increasing street expectations in most cases).

I assume you have discussed both concepts of elasticity of demand curves in class and this is one of the rare ones out there. In commonly accepted economic models, Harley could not preform in the market as is has. Increased supply from it's own plants would drive down pricing (or profits unless the new plant greatly increased productivity), but it didn't. Increase supply from Clones (in most cases with interchangable parts) didn't. Increased competition from 4 major competitors, with technologically superior (in some cases) and cheaper alternatives didn't either. HDI really defies commonly accepted economic models.

Further, contrary to many opinions (some voiced here) not all HD buyers are buttheaded posers or 1% ers. The demographics of the HD buyer nearly match that of the BMW buyer.

So while you may not be a fan of HDI or some of it's owner's attitudes, it does make for an interesting case study in economics. On the other hand you could do a case study on the impact of inter-district tarriffs on consumer spending habits in the EC whilst purchasing cheese.

Good luck!
Kev

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post #4 of 9 (permalink) Old 04-04-2001, 05:44 PM
 
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Cool

Harley came right to my mind as well. I was just thinking about how anybody could pay so much for a machine that is prehistoric technology wise. The only reason it cost so much is because people want them. You would think that it was made of gold....they're heavy enough
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post #5 of 9 (permalink) Old 04-04-2001, 08:32 PM
 
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Re: IDEA No. 1

Quote:
Originally posted by GreenNinja
You could do the paper on supply and demand and the resultant shift in consumer level prices. A great example is the Ducati Replacement parts industry. The demand has skyrocketed in recent years, primarily due to Paul.

Accordingly all the prices have been dropping like rain in Seattle. Cool Beans!
Um,yeah right....
About two weeks ago the Governor of the state Washington officially declared a state of emergency now exists due to drought conditions. Water rationing and energy conservation measures are being enacted at this time.
Kinda takes the air out of your metaphor!!

Jim
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post #6 of 9 (permalink) Old 04-05-2001, 01:03 PM
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Thomas "Tech32" makes an interesting point about people who buy Harley's, given the negative aspects about the technology and weight. It is interesting, as the Japanese cruisers generally have somewhat updated technologies, but share the more porcine weight qualities of "American Iron".

What is it about Harley? Not all the buyers are trying to mimic the "lifestyle" nor are they (obviously) buying these bikes by the thousands for technological advantage. (Although the TC88 has stimulated trade-ups from Evo platforms) The hardcore generally aren't new-bike purchasers, either.

We have 2 major "Harley" events in this area, Street Vibrations in Reno and the Bridgeport Rally south of here. Each event draws in excess of 5,000 bikes. There's a mix of the wannabees and some posers to be sure, but the majority are 30-60 year old, fairly civilized, nice people. They are simply enjoying something we all share, a sense of freedom only two-wheels can bring. This still doesn't answer WHY Harley has the brand loyalty/preference they enjoy, but at least it should show that there isn't a large a distance between sportriders and cruisers as we might think.

As some of you know I am a confessing Harley rider, but I also love virtually anything on 2 wheels with a motor (mountain bikes and cool carbon fiber roadbikes too) I got my Road King for a bunch of reasons and truly love the bike. I've jokingly told people it's the frequency of the engine's vibration and sound of the pipes that stimulates the natural biorythm of the human spirit. Hard to explain, even harder to quantify or analyze in a Keynesean Economic model.

Sorry for the thread drift.
Kev

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post #7 of 9 (permalink) Old 04-10-2001, 10:24 AM Thread Starter
 
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damn...thanks!

wow, im impressed. thanks for the suggestions. I was actually considering something like what you mentioned Maxim. sorry 'bout not responding to any of your posts, i've been doing a paper/day for atleast the last week or so, and the eco one isnt due for another week or two, so that sat on the back burner for a bit.

Anyway, heres the assingment:

You are to analyzze an American (not necessarily...) firm or industry of your choosing, one that has undergone nothworthy changes in recent years. Use whatever time span you feel appropriate, but the events under analysis should be fairly recent. Include some history of the firm, but keep it to a minimum.

Discuss the demand characteristics of the product, i.e. - is it a normal, superior, or inferior good? us the demand elastic or inelastic? what are its substitutes or complimentary goods?

You must include a discussion of the industry's market structure (important). Explain why it appears to be perfectly competitive, monopolistic, ogopolistic, or monopolistically competitve.

Some data should be included, such as: sales revenues, market share, # of outlets, etc. to support your analysis.

some sources she recommended are: the wall street journal, boston globe, ny times, business week, fortune - among others (if you guys have any links to cycle-relevant articles in these mags, that would help a lot).

i dont know, sounds like a lotta work. 7-10 pages. I was thinking about doing something on how harley seems to break alotta rules of thumb regarding elasticity and stuff. any suggestions are welcomed though. thanks again -- matt
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post #8 of 9 (permalink) Old 04-10-2001, 11:18 AM
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The Motorcycle Industry News is located right here in town. (more refugees from the people's republic of california)

http://www.mimag.com/index.html

You can get industry stats and info from them far more easily than trying to get that info from the WSJ.

I would also check Harley's website for some company history. You could discuss the AMF years to the Mgt buyout, subsequent tarrifs and rebirth of the company in your executive summary portion of the paper. Then continue on to describe the nature of the market.

Sounds like a fun project for a normally painfully boring subject!

Have fun.

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post #9 of 9 (permalink) Old 04-10-2001, 03:33 PM
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Even in a rotten market, Harley rakes in the dough!

Harley-Davidson Earnings Beat Street
NEW YORK (Reuters) - Harley-Davidson Inc. (NYSE:HDI - news) said on Tuesday its first-quarter earnings beat Wall Street expectations as strong demand helped the U.S. motorcycle maker cruise past the economic woes plaguing retailers.

Milwaukee-based Harley-Davidson, which also markets clothing and accessories, said it earned $92 million, or 30 cents per share, for the quarter ended March 25, compared with $80.2 million, or 26 cents per share, a year earlier.

Wall Street analysts, on average, expected 29 cents per share, according to research firm Thomson Financial/First Call, which monitors earnings.

Revenues for the quarter rose 12.7 percent to $767.3 million, and shipments of Harley-Davidson motorcycles rose 10.4 percent to 54,154 Units, it said. The company said it had also increased its second-quarter production target to 59,000 units.

Harley-Davidson shares closed up $1.17 at $40.40 Tuesday on the New York Stock Exchange.

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