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Harley Davidson Pest and Five Forces Essay example

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Introduction

Harley Davidson is America’s most successful manufacturing company. It has established itself as market leader for the heavyweight motorcycles and is the world’s most profitable motorcycle company. Harley Davidson has been around for over 100 year and although it sitting on a healthy position in term of profitable, heavy competition and negative trends raises the question on the length that Harley Davidson will continue to be a profitable company. This Strategic analysis will summarise the Macro-environment of the Motorcycle industry as well as summaries the effect of the five forces have on the profitability of motorcycle industry. Also an internal analysis will be conducted which will outline Harley Davidson resources and
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The reason for this is because suppliers for the motorcycle industry supply raw material and components to the motorcycle industry where it is then used to manufacturer motorcycles. The suppliers are usually, many small to large organisations and therefore tend not to have high bargaining power. Also, motorcycle industries usually have high volume production which requires high volume of raw material and components, so therefore motorcycle manufacturers tend to have higher bargain power thereby reducing the price of the suppliers which increase the profits for them.

Motorcycles would be a high capital expenditure for a customer, and therefore price sensitivity would affect bargaining power of customer in this industry thereby reducing the profit for the companies in this industry.

Factors such as rising fuel prices and slow economic growth will impact two ways on the motorcycle industry in term of substitutes. Regarding motorcycle as a form of transport, fuel prices had lead to increase demand for motorcycle, therefore threat from cars will be low, and also switching cost from motorcycle to cars is relatively high, thus making threat from cars low. On the other hand public transport poses a higher threat as the switching cost to them relatively low.

Rivalry in this industry is very high with very large companies dominating the market, there also
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