Harley Davidson Five Forces Analysis Essay Example for Free

Harley Davidson Five Forces Analysis Es vocaliseIn our posture competitive world in the business where customer appreciations atomic number 18 continuously changing, prices of raw materials and approach of press are increasing and world(a) economy is becoming unst equal, it is al ways been a difficult task for companies to lay all in all over and perform business. And these barriers control been a familiar scene in the global business. That is why for most companies in high society to over get into such of these difficult challenges, innovativeness and the desire to be genuinely critical and most gravid of the changes in the attention and the whole global economy is heightsly necessary. Just wish advantageously for Harley Davidson as the chief(prenominal)(prenominal) pore of this view, even though the order currently established itself for being the highly rated cycle sign in the world, it is still non enough for the social club to be relaxed and feel that they flock be utile and enticing to the market as years goes on. That is why in this musical composition it depart directly center on how do Harley Davidsons competitors are doing at the present, what are some of the strategies that they do to compete. With this information to the highest degree the competitors, how does this information be used by the party in terms of opportunities for them to use it as a strategy against them?Also, making use of this information to handle future threats as nearly, this is in order for them to forewarn and provide some immediate actions. In the second part of this paper, it will guidance on how the confederation can apply Porters tailfin forces tool in order to continually achieve competitive favour over its competitors. Also at the second part of this try it will discuss on how motorcycle companies like Harley Davidson, can still earn above number return even though the union falls at the high-end market with to a greater exte nt than(prenominal) on the rattling(a) and recreation side and not as necessity for customers.Also, with that, what are the actors or contributors that will lead to that conclusion or will help make water that goal? Study of Harley Davidsons Major Competitors As the pi unmatcheder and one of the oldest known brands in the motorcycle industry in the world, Harley Owners Group has been in the industry since 1983 and due to its growing influence worldwide, it already has over 1,000 chapters and over a million members worldwide. But, not all of its members own a bike it is only the prestigiousness and respect about the Harley machines that made them decide to be a member.As one of the strength of the companionship, it has been continually establish its brand as the number one brand in the world, with over 5 cardinal USD annual revenue annually. In terms of its competitors, the confederacys briny competitors, most specially in terms of plan are the fol brokening BMW, Victory, Hond a, Suzuki and Yamaha, but among these lists, Honda has become the closest and toughest competitor of Harley Davidsons motorcycles. (Harley Davidson Motorcycle, n. d. ).With the bon tons main focus on design, forest and most specially durability, it continuously has been in the forefront of the high-end and specious motorcycle business in the world. That is alike why 80% of the total revenue of the company comes from motorcycle sales. With regards to the companys competitor, even though the company clearly dominates the American market as its origin, which has registered in the 2006 market share, the company has eaten up half of the market or 50% while far second and third are Honda and Suzuki with 15. 1% and 12. 9% respectively.But the question now is not only the American market but instead what this paper is focusing is what the competitors are doing in the global scene. Which is actually smaller, like for Canadian market, it drops to 38. 4% still relatively high, but what is more alarming and of necessity to be focus on by the company is on the European market which is only 10. 2%, but still the company has a noticeably high market share globally as it generates at an average of 33%. And this is more alarming because it will also follows that the companys net revenue growth also shows very small in other major regions in the world.With this event, it is necessary for the company that it require to strengthen its presence in these main regional markets, because in the long run, it will be a enigma that the company ineluctably to focus on. The two main reasons why these competitors get-go to entice substantial number of customers are (1) they have greater financial resources, like Honda and Suzuki, with their global presence, they have enough financial support in every region that they work on.Meaning to say these companies knows that they know how to make use of their money in enticing potential customers and retaining current customers as thor oughly and they can even compete with price and that will soon be a serious worry with Harley Davidson, since the competition is on how to innovate with technologically funded studies that will still provide quality as well as make the product still not that so expensive.Lastly, (2) these companies, like Honda and Suzuki are obviously more diverse than Harley Davidson they sell a lot of products with a lot of brands and choices that customers can choose, from cars, to simple scooters up to high-end luxurious brands of motorbikes and not only that with wide variety of choices to choose from. This is another serious problem by the company in the long run, since these competitors knows how they can be well-trusted by the customers and if you made such products with quality in all of it, it will be a positive sign for these companies and that will create problem for the company.With these two main reasons, Harley Davidson needs to formulate a strategy that will address these problems i n order not to get along add problem in the future and also not to wait until the companys edge in the global market be removed or at least be reduced. Also, based on this study, the company must(prenominal) also look forward in addressing these issues while they are still room to operate due to its continuing edge in the global market. (Harley Davidson (HOG), n. d. ). In the second part of this paper, the main focus is on how the company can effectively apply Porters fiver forces model in attaining competitive advantage.The five forces of Porters method that are popularly applied by companies are (1) Potential entrants, (2) Buyers, (3) Substitutes, (4) Suppliers, and (5) Industry competitors. In all(prenominal) of these five forces, there is an important factor that contributes to the supremacy or failure of each forces and this will be discussed separately as to how the company can effectively apply it. In the entry barrier, where it mainly focus on the potential entry of cru de products or brands, the company must continue to be very pro-active in this part as the competitors are becoming very aggressive in this area.What Harley Davidson should do is to increment the customer awareness of their motorcycle brand in some of the regions that they are starting to have a very low market share like in the European and Asian market. Studying cost advantage and relatively access to distribution are two of the most important focus that the company should do. Also, can be added to that is to have an in-dept study on the Government policies which might be the effect of low market share, because the territories that the company operates must also need to be well represented and not just putting up a business.In the rivalry determinants, which mainly focus on both the industry competitors and naked as a jaybird entrant forces, the company should be mainly focus as usual on how they can have advantage over its competitors by not only anticipating future challenges and innovation that their competitors may get down but also be able to establish a well defined marketing and question and development study that will help the company confident enough in dealing with the market.particularly, the factors that it needs to focus are industry growth, always look on the potentials in the business and be first base in formulating it to the market, product differences, at this point, which is already been the strength of the company, but still needs to do more and that is innovativeness where it also been the main focus of its competitors. The company must look on how they can provide its clients new and very attractive designs, but it should also have to look on the cost side as well.And lastly, is switching costs, for any company there should also be some intelligent cost study on how the company can still be appreciated by the customers and these can either come from service and move and of course these should be well accompanied with excellent ser vice and availability of parts which is also a big factor during actual competition. In the side of threat, what the company should look about on how the innovative trend and pricing strategy trend that competitors is doing.Most of the time these is what is being bottom to Harley Davidson, since it has been recognized as a very expensive brand and at the same time more on respecting traditional design, competitors compete through these factors. So, what the company needs is that they have to anticipate these by introducing new and innovative styles and at the same time study some possibilities of offering some not so high cost brands which may also give additional leverage for the company.Another important study and important advantage of Porters Five Forces is supplier power, in this side it is also important for the company not only to look for the most efficient supplier but also study closely in terms of cost. Harley Davidson must be careful in forming up agreement with suppli ers. Like they can have global partnership with some suppliers, most specially if some of these suppliers are proven that they serve the company well. This reduces the cost by having different suppliers in the different regions.That is why there are two ways that the company may apply (1) the company must carefully look into suppliers that are effectively do for the company, if there is, Harley Davidson must look into how they can formulate a global partnership in order to lessen the cost. And lastly (2) the company must also re-visit some suppliers that are not performing well and be able to replace it or make some better arrangement on how the company as well as the partner can have a more favourable output. Lastly, in terms of buyer concern, where two of the important force involved, buyers and competitors.At this point these are the greatest challenges that the company must look at since the competitors are very aggressive in this area, most specially in the price sensitivity a nd not much on the bargaining leverage. Price is always a problem with the company, since it continuously in the high-end brands. What the company should do is on how they can study on introducing brands that may address other markets which will still not compromise quality and cost. In the bargaining leverage, the company must look on how they can provide some better offers for some big markets, like in terms of wholesalers.Lastly, with regards to the question how can motorcycle companies like Harley Davidson, where its business falls more on luxurious and recreation brand of products which also targets high-end markets, which the question is on how they can continue to earn above average returns. It is obvious that for company like Harley Davidson, they have to focus more on how to deal with innovations is one panorama that they need to do. By strengthening its research and development and the usual attention to customer needs and preference is the key to continually achieve abo ve average returns.Most specially the latter where still it is considered as the most important factor in the business. The main actors or contributors that needs to work on this one in order for it to materialize are the following (1) Companys human resources, which means that it should continually strengthen the practiced expertise of the company, and lastly, (2) is to build partnership with some of the global and most recognized industries or companies which is what is lacking with Harley Davidson. wad expertise and partnership through reliable and very influential companies are very important to the success of companys these days. That is why with the help of the management team and its top executives, they need to recognized it as the main key to continually have a better return in the business. Conclusion In this study, it shows that for any company to survive in this very competitive world of business, companys needs to be sensitive enough in understanding the competition an d on how they can overcome it.In this paper it shows that even company like Harley Davidson, who still has substantial edge in the market, it still needs to be aggressive and continue to study on how they can attain competitive advantage. Like what resulted in this study that even though the company seems to have control in the American market, competitors are only starting to focus on targeting on market outside the American region, which shows that the company starting to opposed down and competitors like Honda and Suzuki are rising up.This also resulted that due to financial capabilities and diverse status of these competitors which starting to give problem to Harley Davidson. That is why the company must look on these growing advantages and be able to formulate a strategy that can offset it. In the second part of this paper, it also shows that in order for the company to be aggressive and effectively achieve competitiveness, Porters five forces has been presented and for each forces, there are important discussions on how the company can apply it effectively and efficiently.