Harley-Davidson: External and Internal Environment

Harley-Davidson: External and Internal environment

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Analysis of the external environment

The external environment of a business defines the scope under which the business operates in. The external environment forces are not determined by the business, yet the firm must produce a reaction to what is happening. The business must align itself in a way that it gets favor from the business environment conditions. Harley- Davidson Company being a company that manufactures motorcycles is affected also by the external conditions. The ability to adjust accordingly to the conditions aids the company to achieve its targeted results in the market. Carpenter (2006) denotes that Harley Davidson company ability to monitor the external conditions waves and ability to adjust to the waves enables it to have the competitive edge.

The Harley Davidson Company is incorporated in the motorcycle industry. The industry makes is affected by many issues that forces it organization to change. The forces of change in the industry must be taken into consideration by an organization or else remain extinct in the industry. In the motorcycle industry, there are changes that have affected the operation of Harley Davidson Company. First and foremost, the regulatory policies and government policies affect the nature in which the businesses are conducted. Steel policies by the United States government is an instance of a government policy in operation. The steel policy which resulted in introduction of tariffs posed a great threat to production of motorcycles for Harley Davidson Company. The strategy needed for this kind of environment was to make sure that the company makes a deal with the America steel suppliers to have a competitive advantage over others (Carpenter, 2006).

Manufacture of products for prestige is another change that dictates the nature of operation of businesses in the motorcycle industry. The motorcycle industry is majorly bolstered by the prestige and cool nature associated with the motorbikes. In regard to this force of change, the Harley-Davidson Company produces motorcycles best distinguished for luxury and not necessarily for transport means.

Demographic change in pattern of who buys the product. The new direction in which the buying pattern is making is also influencing the operation of the business. It has been denoted that females use heavy bikes as opposed to the past where the perception that only men can have heavy bikes. The change is an added advantage to the company and hence the company must take into consideration this aspect and make products that are more appealing to females.

Porters five forces in the industry

Based on porter’s model of power, the following are the forces in the industry:

Force 1: competitive of sellers in the industry

In the motorcycle industry, there are other companies that manufacture motorcycles and hence share market with Harley Davidson Company. In the year 2011, only 43% of the heavy motorcycles in sale in North America were from Harley Davidson Company, the rest 57 % were from rivals. The competition is assumed to be great in another regions like Europe where the company enjoys 7% of the market (Worthington, 2009).