Harley Davidson –Threats (T)
New Emission Standards
One of the growing Threats to Harley Davidson’s reign of dominance in US markets has been a growing awareness of the environment. In response to this, the bar for emission standards is continuously raised. In 2010 model year or newer motorcycles emission standards for both HC + NOx were reduced from 1.4 prior to 2010 to just 0.8 after 2010 (US Government Printing Office. 2013). For at least 5 years now, there have been rumors circulating that Harley Davidson would abandon the traditional air cooled designs in favor of a new liquid cooled lineup in response to ever growing emission standards (Huze. 2011). If emission control standards continue to tighten, Harley Davidson may be forced to do exactly that. Procurement of Raw Materials
Historically, Harley Davidson has relied on limited number of suppliers for raw materials to provide the components used in its manufacturing plants. In some cases, the entire company’s business is dependent on just one supplier to deliver certain raw materials in time. The lack of versatility in this area means that rising input costs could lead to capacity issues in the long run. Additionally, increasing costs for commodities could lead to capacity constraints, ultimately leading to lower production (Harley Davidson, Inc. 2012).
Currently, Harley Davidson holds 56% of the market share for heavyweight motorcycles, defined as those motorcycles that displace more than 650cc. To some this may be an impenetrable advantage in the market, to other, a source of vulnerability (Taylor III, 2012). For years, Harley has been the undisputed king of the “bad boys”, but in recent years up and coming companies such as Polaris are trying to muscle in to the motorcycle arena. Polaris, a company known for its snow mobiles has only recently begun selling motorcycles 14 years ago (Taylor III, 2012). Polaris has shown that it understands what its buyers want and has demonstrated success in achieving higher sales through its colorful names such as Victory, 8-Ball, and Jackpot lineup. With aggressive pricing strategies and comparable quality, Polaris has quickly passed foreign competitors such as Honda, Yamaha, and Kawasaki and is now setting its eyes on Harley Davidson after its recent acquisition of Indian. Harley Davidson – Opportunities (O)
In response to declining domestic sales, Harley Davidson has decided to expand its global presence in China and India. In 1995 Harley Davidson entered the Hong Kong market, opening its first mainland China office just 10 years later in 2005 (Miller. 2012). Currently, Harley has 8 full service dealerships in china and have plans to open an additional 5 more within the next 5 years. Harley’s biggest challenges have been the understanding of foreign markets. In China for example, the motorcycle market was riddled with low cost economic alternatives for daily transportation. The average engine size ranges anywhere from just 50cc to 600c. With some of Harley’s heavyweights tipping the scales in the range of 800c to 1600cc beasts, the concept of heavyweight leisure riding was simply not understood yet in foreign markets. Harley would have to start from the ground up if it wants to succeed. Today, Harley has succeeded in growing its international presence in over 70 countries across the globe. Although growth into international markets has been substantial, there is still significant room for further expansion (Miller. 2012). New Product Launches
Another area of opportunity for Harley Davidson lies in the arena of launching new products. In 2014 Harley expects to launch eight new models, a record number of new models within the same year. Harley realized that with the baby boomer generation coming to a close, younger audiences will demand new and innovative products. The company, now in its 110th year of operation, has launched a customer...
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