Business Analysis Of Harley Davidson Mo

Topics: Motorcycle, Strategic management, Management Pages: 7 (1161 words) Published: December 8, 2014


Business Analysis of Harley Davidson Motor Company
MGT/521
October 8, 2012

A comparison of two direct competitors in the motorcycle market, Harley Davidson (a fortune 500 company) and Honda, a producer of cars and motorized vehicles, reveals through the analysis of the businesses that investment into Harley Davidson would benefit the investing person or group. The American company, based out of Milwaukee Wisconsin raised its profits by 44% to $170.2 million in the first quarter of 2012. The company itself has a large network comprised of franchised dealerships that total 1,468 across US, Canada, Asia Pacific, Latin America as well as the EMEA. (Zacks, 2012)

Through SWOT analysis of both Harley Davidson and Honda, it shows investors that the opportunities and strengths of HD outweigh those of Honda. In contrast the threats and weaknesses of Honda outweigh those of HD. Given that Harley Davidson is the leading in the industry not only in the US but also across the globe, the potential opportunities to grow, profit and expand out number its competition in Honda.

Harley Davidson SWOT-
Strengths:
Innovation in product
Technology in repair and production
Strong brand recognition (#45 in top 500 of most recognizable brands worldwide) Strong market financial position
Pricing
HD owns 55% 650cc motorcycle sales worldwide market share
Growth and expansion in other countries
Resale holds better in market, lower depreciation rate
Median income of buyer is $87,000/ year-more then $30,000 over median household in US

Weaknesses
Getting stronger in the global market, but staying stagnant or flatline within the US for production Narrow product margin across the industry
Higher price point with new vehicles

Opportunities:
Expansion
Financial markets
Emerging markets to capitilize
Innovation
Product services expansion
Expanding demographics
Threats:
Competition
External Changes in global market
Lower cost of competitors
Lower cost of imports
Product substitution
Older customers are not buying more
Younger riders are going with less expensive models

SWOT Analysis of Honda Motor Company (Motorcycle production) Strengths:
Diversified operations
Brand recognition
Leading market position in brand strength
Engineering capability
Strong distrobution network
Weaknesses:
Employment productivity
Non- US based brand
Lower resale value
Imports and exports

Opportunities:
Increasing demand in technological advances in car industry, being made available to the motorcycle industry Larger opportunities in Asia markets

Threats
Competition
Economic slow down
Comptetiion in the global automotive industry that will laterally effect the production and sales of motorcycles Appreciating Yen over US dollar

In review of the SWOT analysis, the strengths that Harley Davidson provides for investors reveals that their relevance in the market drives its production and sustains their place in the expanding demographics. Julio Valdenegro, a local owner/ manager of a Harley Davidson dealership defines talks about if he were to speak to anyone about investing in Harley Davidson, they would want to look at it “ with the large global outlook in expanding its overall profit. Harley Davidson still owns over half of the production of motorcycles within the United States alone.” Along with the strong hold of the market in the US, Harley Davidson is constantly researching its worldwide competitors in the countries they expand to. As Mr. Valdenegro talks about the expansion, he also speaks about the opportunities that Harley Davidson gains by developing business in other prospering countries. Such as technologies, production, management, importing and exporting, all to lower the overhead cost that it takes to produce these vehicles.

Keith Wendell, the CEO of Harley Davidson as of 2009, has been an important factor in the upswing in its product...

References: (J. Valdenegro, personal communication, October 1, 2012)
Mac, (April 9, 2009). Northwest Harley Blog. http://nwhog.wordpress.com/2009/04/09/biker-buff-as-ceo/
Zacks Equity Research (May 30, 2012) http://www.zacks.com/stock/news/76075/harley-davidson-remains-outperform
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