Strategic Management: Internal Analysis Name: Institution: Harley Davidson is the world’s leading manufacturer of heavyweight motorcycles. The company is based in Milwaukee, Wisconsin and has been producing motorcycles for more than 100 years. The company provides wholesale and retail financing and insurance programs principally to its dealers and customers. It operates in two business segments: motorcycles and related products segment and the financial services segment. The company undertakes building its position in the marketplace through new product launches, restructuring initiatives and strategic alliances. The company operates in an industry characterized by fierce competition. Its main competitors include Yamaha and Honda. Initially, the company operated in the United States and the European markets but of late it is venturing in the emerging markets. Strong brand image, operational efficiency and wide range of products and services on offer are the company principal strengths. The company boasts of one of the strongest brands in the world that has helped the company in attracting and retaining a loyal customer base. The company managed to establish a powerful brand image with its motorcycles attaining iconic status and being ranked among the most valuable brands in the world. Harley Davidson is permanent feature among the top 100 brands in the world. The high level of innovation and heavy investment in research and development has enabled the company to build resilient motorcycles known for durability, quality, design simplicity and traditional styling. The creativity of the company has enabled it achieve industry recognition for high quality, robust performance, best design and unwavering customer confidence a... ... middle of paper ... .... The company has also altered its marketing efforts in a bid to appeal to the young people and women. Previously, the company market initiatives targeted middle-aged men only. The company has also outsourced its manufacturing processes to reduce the cost of production enabling the company to offer its products at better prices. In addition, the company is planning to introduce low cc motorcycles that are relatively cheaper as it endeavors to diversify. Harley Davidson future outlook is bright. Its decision to enter emerging markets presents growth opportunities as the income levels in these countries rise. An increasing number of people in these countries have sufficient to afford luxuries such as motorbikes. Similarly, outsourcing would permit the company price its products competitively thus it gaining a competitive edge in the industry. References:
It is important that the company continues to produce high quality saddles and accessories for a wide range of street motorcycles, dual sports, quads and scooters. At the same time, the company's further success will depend on venturing into additional products while securing new customers.
In the 1990’s, Harley Davidson saw tremendous growth and looked for resolutions to its one problem of balancing production with its soaring demand. In 1996, Harley announced “Plan 2003”. “Plan 2003” was a huge undertaking to increase its production capacity, introduce several new models and increase international expansion. At the end of this planned expansionary period, Harley’s sales had grown tenfold over just 23 years. However in 2007, domestic demand was starting to slip, as several economical factors...
motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments (Harley-Davidson website, p.2)."
The next ratio we will review is gross profit margin. Gross profit margin (GPM) measures the percentage of each sales dollar remaining after the firm has paid for its goods. The higher the gross profit margin, the better. Harley Davidson's gross profit margin was 35.08% for 2001, 34.09% for 2000.
The concept of recreational riding is new to the Chinese; therefore, HD has had to promote leisure riding to move their heavyweight bikes. Toward this end, HD established its Harley Owner Group (HOG) chapters in Beijing, Chengdu, Qingdao, and Shanghai; these owners clubs sponsor rallies and bike rides that promote leisure riding (Miller, 2012). Furthermore, they cooperate with local governments when planning their rallies, demonstrating benefit to the community and instilling confidence in Harley.
The bike company has three manufacturing plants. This might not seem like a weakness but Harley Davidson does not just sell to the United States, but the entire world. Therefore having only three manufacturing plants limits the amount of bikes they can produce to satisfy weakness to such a big company. Most of Harley Davidson’s sales are generated from the United States. There is little to no revenue recorded from other parts of the world. The second weakness that they have is the expensiveness of the products. Since there is a limit on how much the company can grow in solely the US market, they should definitely focus on expanding globally. Compared to other brands, Harley’s prices tend to range higher. This is a weakness because it limits the amount of people that can afford one. The third and final weakness of the company is that the people that buy these bikes are limited to a small age demographic. This demographic would be people over forty five years old. Now the problem with this is that the people that buy these bikes are getting older and starting to die off. The bikers are not being replaced by younger people. A Harley Davidson may not be as attractive to younger people as may a Ducati or some other sort of motorbike. The company’s product line is not diverse enough to advertise to customers of the younger
This case study is about “Specialized Bicycle Components Inc.” known as Ride the Red “S”. Specialized was founded in 1974 by Mike Sinyard. According to Chris Murphy, director of marketing for Red “S”, specialized is for serious riders. He says, “The customer is buying the ride from us, not just the bike.” The company began to produce its own bike parts by 1976, and introduced the first major production mountain bike in the world in 1980. Specialized now has an extensive global distribution network of 5000 retailers in 35 countries in Asia, North America, South America, and Australia. They maintained a reputation as the technological leader in the bike and bike accessories. The formal mission is still the same since they established the company “To give everyone the best ride of their life.”
Harley-Davidson Strategic Analysis -. 2013. The. Harley-Davidson Strategic Analysis -. [ONLINE] Available at:http://www.scribd.com/doc/12517953/HarleyDavidson-Strategic-Analysis. [Accessed 16 December 2013].
Our company’s strategy is to sell consumers an experience, not just another motorcycle. We are geared to allowing our customers and potential customers experience what a Harley-Davidson motorcycle is all about. At Harley-Davidson, we don’t consider our motorcycles as automobiles but as a way to get from point A to point B in an exhilarating, exciting and fun way. We are also focusing on earning more market share globally especially in the Asian markets. We are also trying new product launches to appeal to more consumers other than just heavy
Despite their conception in 1903, Harley-Davidson and the motorcycle industry as a whole didn’t really take off until after the Second World War. Many people rode motorcycles during the war, with Harley-Davidson themselves supplying almost 90,000 motorcycles for the U.S. military during this time. Many veterans chose to purchase motorcycles upon returning home, as they enjoyed riding during the war and wanted to continue riding in their civilian life. This generation known as the "baby-boomers" quickly became the main target audience for many of Harley-Davidson’s marketing efforts. With sales increasing and the industry growing, many "motorcycle clubs" and "rallies" were introduced. Unfortunately, due to the lewd behavior displayed by most people associated with these clubs and rallies, bikers typically had an image of being disorderly and raucous. Harley-Davidson’s image itself took a big shot due to the Hells Angels. This was a motorcycle gang wishing to become notorious for "drug trafficking and other organized crime activities," who used only Harley-Davidson motorcycles. All of this combined to lead to a decline in demand and sales throughout the entire industry during the 1960’s. The industry was really helped out with the release of the Hollywood film Easy Rider in 1969. This film helped change the public’s perception of bikers and sparked an increase in motorcycle demand which has lasted to this day.
BMW has captured the attention of automobile drivers from all around the world with their “Ultimate Driving Machine.” The BMW Company was originally established in Germany and has extended nationally reaching over 12 countries. With Germany and the United States being the top two target countries, BMW has established their products as a combination of luxury, safety, and comfort with product lines to suit all styles of living. Revenues have been increasing each year since before 1996 with profits coming from product line of automobiles and motorcycles. In 2001, BMW came out with a new product group, the Mini. The Mini also contributed to the revenue increase in 2001. BMW has current developments in their sports cars, the Z8. BMW has created a trustworthy name for the automobiles they produce and has all the potential to continue their success in the future.
Italian manufacturer Piaggio ranks as one of the world’s top four players in its core business. It has consolidated leadership in the European 2-wheeler market. Piaggio should not miscalculate its competitors. Competition in the industry is very powerful, not only nationally but internationally as well. This is due to two well-established companies in this sector which are the Japanese Yamaha and Honda. Yamaha and Honda strengths are their long-run experience in the sector and the high quality image of products. Due to participations to the motorcycle championships, these two companies constantly receive positive feedbacks to their efforts in researching for first class products. In the future, other kinds of competitors are expected to arise: Chinese companies whose ability to imitate and create similar products at highly competitive prices is getting more and more dangerous (Piaggio, 2008)
BMW having high market share in European and U.S luxury car markets, started facing issues with launch product qualities and also facing a fierce competition from Japanese producers. Currently the market share was still stable but the rigorous growth of Japanese producers would affect BMW in future. These Japanese competitors had set higher standards of conformance.
Honda, like other automotive companies, also came to the conclusion of firming a joint venture. At the moment, Honda was already famous for motorcycles in UK, but it was less well known in terms of the automobiles. While Honda’s cars enjoyed reputation for good quality and durability, the import restrictions limited its success it the European market. However, the European market was essential for the company’s global expansion. With the joint venture, Honda could avoid the restrictions on the import quota by assembling cars locally, because these cars would be considered locally produced. Moreover, a local partner could assumedly offer a better insight of the market.
Honda- focused differentiation, medium pricing, breadth of product line is high. Strengths are quality, reliability, overall value, and styling.