Harley Davidson is one of the largest manufacturers in the United States. It has become a major leader in the Industry for creating the heavyweight motorcycle that has been designed for “cruising on the highway.” (http://en.wikipedia.org). In this paper we will discuss how the heavyweight motorcycle market has become an important asset to the industry. We will include the major strategies that have been established and the breakdown of the manufacturing process in the industry. We will be examining the Industry’s prospects and expectations for the present and future based on the motorcycle market. INDUSTRY ANALYSIS
PORTER’S 5 FORCES
Rivalry Among Competitors
The market for motorcycles has a few competitors that have become a rival competition for Harley Davidson. These competitors include Honda, BMW, Yamaha, Kawasaki, and Suzuki. Harley Davidson has been a dominant factor in the industry, and has increased its’ productivity. (www.management.stir.ac.uk). The industry will be confronted with problems where consumers will consider the cost and comparison between motorcycles, but the brand name “Harley Davidson” is one of the main strategies that has been used to differentiate itself from other competitors. Based on supply and demand, the industry has to produce products that consumers will purchase and the level of output which means that the market will ensure to have limited amount of production. This will ensure for the products to remain in high demand. This is proven by manufacturers distinguishing the quality, style, and designs of each product. Loyalty among consumers is an important factor. For example, the market has the extended popularity with “motorcycle enthusiasts” in the market. Government regulations are another form of rivalry that the manufacturers have to compete with. Throughout the years, there has been an increase on proposed regulations based on land use, amounts of noise that is allowed, age, and pollution. This brings manufacturers to a problem where they have to produce a product that will complete the standards of certain regulations. Barriers To Entry
The industry will deal with several obstacles in this area such as high barriers of entry which will include the cost of the plant, cost of equipment, infrastructure, and marketing costs. There will be decisions that have to be made based on whether the market in that area is mature enough or whether there will be a rapid growth in the market (www.nd.edu). Despite the obstacles obtained, the motorcycle market has made a decision to expand overseas. It will be working on expanding to China, Vietnam, and India market where it plans to have booster sales. They have been working with officials overseas to deal with barriers such as tariffs and stringent emissions (www.boston.com). Power Of Suppliers
Threat of the supplier‘s growing bargaining power is whether the prices are going to increase or not. Motorcycle’s main supply is steel. A major concern is the cost of inputs. The restrictions put on the United States will raise the cost which in turn will result an increase on the price for the consumer. With the demand on product, Harley Davidson is one of the largest purchasers in the industry, and many suppliers have been able to work with the cost of supply (www.nd.edu). Power Of Buyers
Kawasaki, Suzuki, Yamaha are major competitors aside from Harley Davidson. The competitors might produce a motorcycle that might be lighter, less expensive, or different style, but Harley Davidson has attracted various kinds of consumers. Motorcycles have become popular within the industry to a younger generation and women. The American women are one of the fastest growing consumers buying 100,000 motorcycles per year (www.nytimes.com). As for the market outlook, there has been an increase of registrations and shipments. The “Baby Boom” generation made it possible for the market to have a major increase on...
References: Aaker, David A. Building Strong Brands. New Press, 1996.
“Porter’s Five Forces.” Quick MBA. 1999-2007.
Roadracing Press Release (2008). “Harley-Davidson Retail Sales Down In First Quarter of 2008.” 23 June 2008. roadracingworld.com
Please join StudyMode to read the full document