Harley-Davidson External and Internal Analysis

Harley-Davidson External and Internal Analysis

Erica Thorpes

October 26, 2016

BUS/499

Professor Tebao

External Analysis

When looking at the demand for Harley Davidson products in different countries it’s easy to say that the demand in exceedingly high. With the international heavyweight market is soaring well above the United States marketplace. With manufacturing being outsources to Asia and China it allows for the company to reduce costs and increase profit; currently Europe being a country that is demanding great amounts of Harley Davidson products.

Now it’s important to look at Porters Five Forces Model because in this model you have supply power, buyer power, competitive rivalry, threat of substitution and threat of new entry.   Supplier power is when the supplier makes decisions based on local economic situations to charge. By doing this they can sell greater quantities during different economic times and situations. They can use switching costs to allow for greater buying desire, being a well-known brand to allow for credibility, integration suppliers to cut costs and there are few consumers who have the tools necessary to bargain to the extent usually desired.

Rivalry, is the force that states the value of the product to compete against for better price and quality. There is the constant threat of entry which is the influence of new or existing competitors in the industry.  This threaten can reconfigure market values, measures and overall profitability for other companies. There is also the threat of substitutes, which the substitute of products in the market that can either be quality or a more cost effective product. A great example of substitution is the substitution of paper archiving to computer archiving. Lastly, buying power is the ability to create influence in the industry. By creating interest in products being sold, proper costs and customer services its readily available to be profitable with buying power. By understanding your competition, you will be able to be successful but this would require analysis to your community, company and competitors.

Over the years, Harley Davidson has seen an increase in sales for their motorcycles. In 2014, sub-category bikes sold 483,526 and with the sales in 2013 this led to a near 4% increase, but the best year thus far was in 2004-2005 where the company sold nearly 1.1 million bikes just in the US. Harley Davidson is not showing any falter in their sales or brand loyalty with their market.

Despite Harley Davidsons loyal fan base and quality product each year new laws are passed that have a major impact on riders and the industry sales of these motor vehicles. With the changes, there needs to be new methods created to remain profitable but abide the law; this does not solely affect the manufactures and sell men of the machines but insurance companies as well to make sure these riders are being safe and following the law. There also is the need to stay with the trends such as three wheeled bikes that many riders want to have.