499 Case Study Module Two

Topics: Baby boomer, Motorcycle, Baby Boom Generation Pages: 10 (1714 words) Published: November 16, 2014


Strategic Management: External Analysis
Module Two - Case
Joseph Flores
MGT 499 Strategic Management

Introduction
This case study is about determining ways Harley-Davidson Company would benefit by using the Porter’s 5 Forces and PEST analyses. These analysis tools are used to effectively determine the strengths and weakness of the business and provide feedback for executives to make decisive decisions based off the results. Harley-Davidson built its reputation by manufacturing heavyweight motorcycles designed for highway cruising. The Porter’s 5 Forces tool provides H-D with an in depth look into the factors that promoted H-D through competitive internal rivalry businesses, entry, buyer and supply power and threats to external validity of substitutes (cite). History

Harley-Davidson is an American based company with 100+ years of history and has had its fair share of economy difficulties. Since the introduction of motorcycles back in the late 1800s, there has been a competitive rival on which company will make the fastest, and latest style of two-wheeled engines. In the 1980s, H-D was on the verge of bankruptcy; however, they made a tremendous comeback by incorporating new business tactics, such as redevelopment of customer services procedures, product differentiation through quality designs and manufacturing, and a clear vision of the future of the company (H-D website, n.d). Five Forces Analysis

Internal Rivalry
This iconic company opened in 1903, entering into the motorcycle industry when Indian Motorcycle Company was their only competition (Research and Market report, 2014). Today, the competition continues for H-D, and Indian motorcycle with the recent launching their 2013 Indian Chief Vintage Final edition. This motorcycle mirrors the large frame, longer and more comfortable H-D cruiser (Fogelson, 2013). Competition between Indian and H-D became intense, and started the fierce rivalry amongst to two iconic brands (Fogelson, 2014). While these rivalry remains a threat, H-D first quarter sales of 2014, has shown a 5.5 percent increase by selling 57,415 motorcycles compared to 54,254 sold in the same quarter in 2013 (Lee, 2014). Indian reports an increase of 7 percent, but the largest percentage gains from its Small Vehicle of 248 percent and motorcycle of 58 percent division (Madson, 2014). Harley-Davidson company holds over 55 percent share of U.S heavyweight market (Global Data, 2013). Entry

Harley-Davidson has built itself into a million dollar corporation that is intimidating for smaller motorcycle companies wanting to start up in the industry. There is a large startup cost to entry the motorcycle industry, and few make it without the backing of other major corporations. Polaris purchased Indian Motorcycle Company in April 2011, bring back to life the motorcycles. Polaris is a three billion dollar power sports company, such as snowmobiles, and ATV, and has a history of developing segment leading, high quality products (Indian motorcycle website, 2014). Substitutes

Harley-Davidson is known to rely heavily on the branding and the loyalty of their customers, a predominately-white male and middle age baby boomers. Reports suggest the average age of an H-D owner is on the rise, stating H-D is not able to capture the younger 18 – 34 years of age market. UBS Investment research states H-D has discontinued reporting the average age, alluding to the fact of the age is rises versus declining (Kelleher, 2013). Recreational vehicles (RVs) are a force for substitute showing that the average age of ownership is 48 years old (RVIA, n.d). In fact, the leading force behind the upswings for RV ownership is the baby boom generation. There are more RVs are owned by those ages 35 – 45, exceeding ownership of consumers of ages 55 and over by 9.3 percent (RVIA, n.d). This could reflect why H-D is losing market within the baby boomer generation for more of...

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Fogelson, J., (2014, Jun)
Fogelson, J., (2013, Aug). Indian Motorcycle Rides Again. Forbes website retrieved at http://www.forbes.com/sites/jasonfogelson/2013/01/07/indian-motorcycle-rides-again/
Geewax, M., (2014, Oct 23)
Harley-Davidson. (2014) Annual Review 2013. Retrieved from: http://ar.harley-davidson.com/
Harley-Davidson
Harley-davidson. (2014, Apr 23). Financial Times Retrieved from http://search.proquest.com/docview/1527778012?accountid=14749
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Kellerherm J. B., (2013, Jun). Analysis: As boomers age, Harley hunts for younger riders. Reuters website retrieved at http://www.reuters.com/article/2013/06/21/us-harleydavidson-boomers-analysis-idUSBRE95K0GU20130621
Lee, B., (2014)
Madson, B, (2014 Apr). Indian Sales Spur Polaris Growth in Q1. Motorcycle USA website retrieved at http://www.motorcycle-usa.com/744/18318/Motorcycle-Article/Indian-Sales-Spur-Polaris-Growth-in-Q1.aspx
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Recreation Vehicle Industry Association (RVIA), (n.d) website retrieved http://www.rvia.org/?ESID=FAQs
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