General economic characteristics. The current market for Harley-Davidson motorcycles is mostly baby boomers who want to recapture the freedom of when they were young. Most consumers today are middle to upper class. A? aš¬A? Driving Forces The main driving force behind changes made in Harley-Davidson is image. The company has had to continually change to fit or change an image that accompanies the products A? aš¬A? Five Forces Model There is not much rivalry between Harley-Davidson and other manufactures in the United States.
The only company that comes close to competing with them is Honda, however Honda does not specialize in the same type of motorcycle that Harley-Davidson does. The only substitute product would be a different type of motorcycle such as a street bike, but Harley-Davidson mainly produces touring bikes. A? aš¬A? Competitor Analysis There really are not any true competitors in the United States. BMW is competition in Europe as well as other companies that manufacture street or racing bikes, but as far as touring motorcycles, Harley-Davidson does not have any real competition.
A? aš¬A? Key Success Factors Key success factors include marketing to improve or change image, production to produce enough bikes for consumer demand and distribution, having the right dealerships in place to sell the product. 2 A? aš¬A? Attractiveness This is a very attractive industry for Harley-Davidson; however it would not be a good industry for a new company to try to gain entry into due to such large brand loyalty. Company Situation Analysis Harley-DavidsonA? aš¬až? s business strategy to become more profitable is to market a lifestyle instead of a product.
They show the Harley image as being free and fun. Consumers want to get that feeling and while most people buy the motorcycles, Harley-Davidson has managed to create a market for their products even for people who do not own a motorcycle. Harley-DavidsonA? aš¬až? s main strength is brand loyalty. People see a motorcycle they automatically think of Harley-Davidson. Their weakness however is diversification. While they are extremely successful at producing and selling touring motorcycles, they can not capture the market on other types of motorcycles.
Suzuki and Honda are better known for their street bikes that HarleyA? aš¬až? s Buell Company. This leads to their opportunities. Harley-DavidsonA? aš¬až? s biggest opportunity is to develop a street bike that can compete effectively with a Honda or Suzuki motorcycle. Threats to Harley-Davidson include a changing culture. As Baby Boomers are becoming too old to purchase new motorcycles, they need to refocus their attention to the younger generation. In order to capture the younger generation, Harley-Davidson needs to develop a street bike as not many younger people are as interested in touring motorcycles.
Financially, Harley-Davidson is doing very well. Revenues have grown at a rate of 16% over the past 10 years and have reached 4. 6 billion dollars. This is huge growth considering that the company almost went bankrupt in 1985. Key Issues That Need To Be Addressed The main issue that Harley-Davidson is facing is the aging of their buyers. As talked about earlier, the new consumers of motorcycles are going to be younger people who are looking more for performance motorcycles than touring ones.
Right now Harley is expanding their current business keeping it the same as it has always been instead of diversifying the products that they manufacture. Harley has such a large brand loyalty and has finally changed the image of a Harley rider into a positive one that the company will be okay; there is just not much more room for growth. 3 Strategy Alternatives One potential strategy alternative would be to either merge or acquire another company. They have already tried doing this with Buell motorcycles, however, the Buell brand is not that well known and only make up .
8% of the market for motorcycles. If Harley-Davidson could acquire a smaller company such as Ducati that is already successful in Europe, it could market it better in the United States and gain even more market control over the industry and continue to increase profits. One weakness to this strategy however is image. Harley-Davidson has the All American image and buying a foreign company and marketing a foreign product could hurt the image to some Harley Owners. Recommendations
Harley-Davidson is such a well known and well respected company that I do not necessarily think that they should change their strategy. They have already tried to incorporate new types of motorcycles into their product line with little success. While the V-Rod is vastly different from the bikes they previously made, sales are not as high as on the traditional motorcycles. Their only real option is to better market the V-Rod and Buell motorcycles to try to build a new customer base so that they can increase sales if sales really do decrease on their traditional touring motorcycles.