Case Study: Harley-Davidson, Inc.: Troubled Times Increase H-D’s Reliance on International Sales.

The five forces of rivalry is an efficient method that companies apply to facilitate their ventures to locate most valuable industry for its business. These five forces

The Harley Davidson brand has expanded not only in the United States but also globally, it has transformed its manufacturing, product development, and retail capabilities over

Currently H-D is the leading seller of heavy weight motorcycles across the entire world. Because they are at the pinnacle they are the target for the competition. Some of Harley Davidson 's advantages are name recognition, brand loyalty, brand quality and customer loyalty (Hitt, Ireland & Hoskisson, 2013, p. 81). The company benefits by having “the made in America” image attached to its products. The image of a Harley rider and owner is one of a tough, independent, free spirit, ready and willing to take on the world type of man. The sound of a H-D motorcycle in idle or being ridden is unique and very identifiable.

An industry product can be substituted by a substitute product which has the same or similar function by a different means. A substitute can limit industry profitability and growth. Porter (2008) gives several key elements on determining the threat.

We believe that the firm must find ways to broaden the appeal of its brand without alienating its core customer base. Harley has grown in recent years in the international market , and revenues generated abroad have risen to 25% of total revenues in 2007 from 19% in 2004. Although the firm has recently introduced a performance motorcycle for the European market, I think that it may find it difficult to deliver customized products for overseas markets while supporting its brand franchise.

Harley-Davidson is well known for its unique motorcycles. Its subsidiary, Harley-Davidson Motor Company (HDMC), manufactures five families of motorcycles, namely, Touring, Dyna, Softail, Sportster and V-Rod. These models are distinguished by their frame, engine, suspension, and other characteristics. The company shipped 233,117 motorcycles in the fiscal year ended December 2011, comprising 39.5% Touring motorcycle units, 39.2% Custom motorcycle units, and 21.3% Sportster motorcycle units.

Harley Davidson Company has a long history of building quality motorcycles that have been well receipted in various niches. The company has actually helped to shape a part of the American culture through its products. Its product positioning and marketing strategies can served as a classic example of building a brand icon. Harley Davidson has developed immense levels of brand loyalty over the years. However, the historic company has also been affected by the economic volatility since the recession. The company must know reinvent itself as it turns the next page in its history.

In Harley-Davidson’s circumstance, the most significant strengths include a strong brand that attracts repeat loyal consumers for additional purchases. Moreover, the company has more than a century of expertise creating the brand that consumers are willing to spend more on custom products. The strengths safeguard Harley’s market share making long-term sustainability and growth achievable while fending off aggressive and low-cost competitors.

in or between 1946 and 1964 (Rybolt, 2009). In particular, the (target) customers are older males

Using Five Forces analysis brings the purpose to analyze the industry in order to determine the level of intensity regarding the competition and attractiveness of the industry (Porter, 1979). The attractiveness of an industry is measured in terms of profit; more profitability means a more attractive industry and otherwise. According to Porter (1979), the nature of competitiveness in a given industry can be figured as a composite of the following five forces: rivalry among competitive firms, potential entry of new competitors, threats of substitute products, bargaining power of suppliers, and bargaining power of consumers.

The strength of Harley Davidson can be seen in its logo and product brand. In the United States, the Harley Davidson is like a cult since it has so many followers, as depicted in the case study whereby in all the rallies, hard core fans of the company, for example the Harley Owners Group was present. This gives the company a competitive advantage since it has a market that is readily available and willing to purchase its products no matter the cost. The other strength of the company as seen in the case study was in the protection by the government since it was a United States company. This helped Harley to recover when the company placed an increase on the tariffs charged on the

The success of Harley Davidson (HD) is due to the American motorcycle icon’s effective Strategic Management. HD’s vision, mission, goals and objectives strive to exceed the requirements of its main stakeholders. Although these needs are not always met, the company has unique relationships with is stakeholders. The company stays on course with its strategic plan, despite the economy and the decline of American manufacturing and what might be considered its dwindling U.S. consumer base.

Rivalry Competition: Harley Davidson has a High Rivalry Competition. HD deals with a huge amount of competition in the Motorcycles industry from other motorcycle manufacturers from around the world. These include Honda, Yamaha , Suzuki from Japan; Ducati, Aprilia, BMW and Triumph from Europe; and the Indian as its main rival from the US. The major problem HD faces here is that most of its major competitors are very diversified and have larger financial and marketing resources. For example, Yamaha generates only half of its revenue from motorcycles. The growth rate of this particular industry is forecasted to be 3.4%.

Harley-Davidson has primarily a focused differentiation strategy. It is important to the company that they focus on leisure riders and that their products are viewed as being unique from their competitors. Their scope is very narrow because they are only selling to riders that want the heavier more traditional type of motorcycle and they are unique because their competitors focus on other types of motorcycles. Harley-Davidson considers themselves as selling a lifestyle, rather than a form of transportation (Harley-Davidson, 2014). They support a variety of social groups and clubs in order to create that lifestyle. Also, by focusing on an unique product, they are able to attract employees and consumers that support that lifestyle and appeal to each other. This helps them build loyalty amongst employees and customers.

If an industry is profitable, it will become a magnet to attract more competitors looking to do same business with us. If it is easy for these new entrants to enter the market, this poses a threat to the firms already competing in that market. Threat of new entrants is one of the forces that shape the competitive structure of an industry (Marc, 2014). A high threat of entry means new competitors are attracted by the profits of the industry and can enter the industry easily. New competitors entering the marketplace can make the market share and profitability of existing competitors more threaten cause the existing competitor to make some changes to existing product quality or price levels. A high threat of new entrance can make an industry more competitive and decrease profit potential for existing competitors whereas a low high threat of new entrance can make an industry less competitive and increases profit potential for the existing