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S.W.O.T ANALYSIS OF HARLEY DAVIDSON MOTOR COMPANY Name: Yogna Virupil Enrollment No: 01120111 Course: BSc. Hospitality Management (2011-15) Program: Business Environment Word Count: 1,798
Harley Davidson Motor Company S.W.O.T Analysis
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Harley Davidson Motor Company S.W.O.T Analysis
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TABLE OF CONTENTS
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1. Introduction I.
Introduction……………………………………………………………… iv
II.
Company History ……………………………………………………....... iv
III.
Company Profile …………………………………………………………vi
2. S.W.O.T Analysis IV.
Strength…………………………………………………………………...vii
V.
Weakness……………………………………………………………….....vii
VI.
Opportunities……………………………………………………………...viii
VII.
Threats…………………………………………………………………….viii
3. Conclusion VIII.
Conclusion………………………………………………………………….ix
IX.
Strategy Recommendations and Implementation…………………………...x
X.
Acknowledgement……………………………………………………….... xii
XI.
Reference………………………………………………………………….. xii
Harley Davidson Motor Company S.W.O.T Analysis
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1. INTRODUCTION I. INTRODUCTION The Harley Davidson Motor Company SWOT analysis is an essential source of company data and information. This SWOT analysis report provides you with has examined the company’s key business structure and operations and provides with an insight into the summary analysis of the revenue lines and strategy. Harley Davidson (or a.k.a Harley) is one of the chief automotive companies of the world. It produces a line of merchandise ranging from motorcycle, motorcycle spare parts, accessories, and general apparels. The Harley Davidson is segmented into two divisions primarily (i) Harley Davidson Motorcycle and related products and (ii) Harley Davidson Financial Services. The company chiefly operated form United States and has its headquarters in Milwaukee, Wisconsin and the company employs about 7,900 staff.
II.COMPANY HISTORY It was in 1903 when the first Harley Davidson motorcycle was made. Although the sales were sluggish in the beginning, the single cylinder gained popularity quickly and this motivated the company to go for bigger and better production line. The unexpected slowdown in the 1905 forced to give a second thought for some drastic changes. By 1908 they had sales of 154 motorcycles in that particular year. Then the founders decided to shift their barn production to a full fledge factory set up. Within four years the dealership was booming in United States. By this time the demands across the globe in Japan were rising. The big break came for the company when the United States army demanded for 20,000+ motorcycles for the First World War because of the reason that it was known for its strong power in its motors. The same was continued for the 2nd world war. This humongous demand form the army caused the domestic customers to wait for longer period of time. This event ultimately led to turbulent times for the company in the early 1950’s but it bounced back in 1957 with their new model called the “The Sportster.
Harley Davidson Motor Company S.W.O.T Analysis
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From 1957 to 1980’s the company only made some minor tweaks and changes in the style. By late 1980’s they introduced FLT with five speed transmission and it was belt driven instead of chain driven. Then in 1984 the revolutionary V-twin motors came into existence. From 1987 up until present day Harley Davidson Motor Company has fashioned new models for Page | v the appeal and appreciation of the their loyal customers wants and needs. One thing that stood the test of time is that their base of loyal customers, because of the reason that once you ride a Harley you won’t even give look at other options. May be that’s the reason that the company now 65% of the entire market shares. The eye for detail and commitment towards their customers has guaranteed that Harley Davidson is a horse for the long race.
Fig 1: Harley Davidson 1903 (Source: www.ultimatemotorcycling.com)
Harley Davidson Motor Company S.W.O.T Analysis
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III. COMPANY PROFILE VISION: We fulfill many dreams inspired by the roads of the world by providing remarkable motorcycle and extraordinary customer experience. We fuel the passion for freedom in our Page | vi
customers to express their own identity. MISSION: We ride with our customers and apply this deep connection in every market we serve to create superior value for all our stakeholders.
Category
Information
1. Type of Company
Public Company
2. Trade as
NYSE: HOG
3. Founded
1903
4. Founders
William
S.
Harley
and
Arthur
Davidson 5. Headquarters
Milwaukee, Wisconsin, USA.
6. Products
Motorcycles
7. Revenue
US$ 4.86 billion (FY 2010)
Fig 2: Company profile (Source: www.wikipedia.com)
Harley Davidson Motor Company S.W.O.T Analysis
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2. S.W.O.T Analysis
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IV. STRENGTHS 1. 70% of the European heavy weight motorcycle market is made up of Harley Davidson’s standard and performance. 2. Operation of Harley Davidson happens in two segments namely (i) Harley Davidson Motorcycles and related products and (ii) HDFS (Harley Davidson financial services) 3. The industry’s largest company sponsored motorcycle enthusiast organization is “The HOG” (Harley Owners Group). 4. Harley’s major revenue brewer is the customization of the ordered bikes. 5. Harley Davidson Motor Company holds a strong brand equity 6. Strategic usage of social media for marketing. 7. Harley Davidson has strong customer loyalty base. 8. A good marketing division and its dived into the following: (i) Dealer promotions (ii) Customer events (iii) Magazine and direct mail advertisement (iv) Public relations
V. WEAKNESS 1. Harley Davidson motor cycles are highly priced. 2. The company is finding difficulty in gaining more market shares in European countries and is having continues loss in this sector. 3. A weak analysis of future production as the required production quantity is not met. 4. Deprived publicizing tactics which is leading to a loss in the attraction of new customer. 5. The fear set within people to be categorized as “Hooligans” and “Drug Addicts “image that is associated with bikers.
Harley Davidson Motor Company S.W.O.T Analysis
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VI. OPPORTUNITES 1. Marketing of the products should be conducted more competitively, especially in the European market. 2. Female and younger population displaying more proclivities towards the products of Harley Davidson. 3. International market with more customer value parts. 4. Harley has the complete potential to exploit the regions where the economy is low level and because of the given situation that bikes are more economical way of traveling. 5. The international heavy weight market is now larger the U.S. heavy weight market and has complete impend to be exploited.
VII. THREATS 1. The incapability of reaching the demand and supply equilibrium in the heavy weight motorcycle market has anticipated loss in the coming years. 2. The mean age limit of buying a Harley Davidson is between 45 and 55 is increasing. 3. The increase in the environmental regulations worldwide. 4. Increase of standards in the European Market causing loss of shares. 5. Competitors have larger financial and marketing resources and are more diversified. 6. More competitors are fervent in entering the market because of the low cost of making and huger profit margins. 7. Baby boomers who are the potential buyers are aging International tariffs and duties middle priced segment gaining importance, and transvestites.
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3. CONCLUSION VIII. CONCLUSION Harley- Davidson has survived 100 years in existence and successfully created a lifestyle centered on the Harley Davidson products and company. Harley Davidson has done a better job than any company managing its brand identity and creating a lifestyle around an ideal. The ability to create such a lifestyle and maintain a brand that has loyal customers and has worldwide recognition has allowed Harley Davidson to survive 100 years in the business.
In order to continue its success for another 100 years Harley Davidson must look into its customer base for new ideas. Customers have always been the most important for Harley Davidson, and it is those customers who will bring success to the company. Thus, it is important for the company executive and designers to continue to develop the close relationships that they currently have with their customers. In addition Harley Davidson must continue to forge ahead and take risk in style and design, such as the V-Rod. These types of experiment will allow the company to meet the needs of the ever-changing marketplace. If Harley Davidson is able to continue to build new and groundbreaking designs V-Rod and other in the past the company will be able to continue to grow into the next century. However, it is vital to the success of the company that the traditional “Harley” feeling is not left behind on the road of progress. Bringing new riders into the Harley Family is also
going to be an important issue for the
continuous success of the company. The median age of the Harley Davidson rider is constantly on the rise and now it’s vital to market to the youth and to women’s segment in order to bring these new members into the family to keep the passion for the company alive. As started previously, it is difficult to predict what the future will hold for Harley Davidson, although if the company stays true American, and stays “Harley” there are no limits to both the growths of the company, and lifestyle that it creates.
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IX. STRATEGY RECOMMENDATIONS & IMPLEMENTATION:
MARKET PENETRATION
The company needs to get more market shared in the existing market like U.S., U.K and Japan etc. through strategic marketing techniques like advertising. If the company is able to provide more customer benefits and work upon building a stronger customer base may lead them to eat up the competitors market as they already have a great brand name.
The U.S. market has a lot of competition with the emerging amateur small scale custom bike building factories. Therefore it will be a good choice for the company to penetrate the market.
If the Asian HOG (Harley Owners Group) customer satisfaction levels equal the American counterpart it may lead to increase sales in the untapped Asian Market.
PRODUCT DEVELOPMENT
The rise in biking interest within younger generation and females have opened up new market opportunities for the company.
European market can expand the Buell’s market share by introduction of new model motorcycles.
DIVERSIFICATION
Introducing their products into new markets like China is a good choice, though it will be too expensive for the company.
Best choice is to bring in new types of recreational vehicles into the market.
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RECOMMENDATIONS
Expansion in European and Asian Market.
Harley Davidson to increase sales of Buell sport bike for younger and female Page | xi
customers.
Horizontal diversification: acquires or develops new products that could appeal to its current customer groups and even though those new products may be technologically unrelated to the existing products lines.
Concentric diversification: Bring in new recreational vehicles.
Harley Davidson Motor Company S.W.O.T Analysis
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X. ACKNOWLEGEMENTS The pathway would not have been possible without the generous contributions of my parents, faculty and friends. I convey a deep hearted gratitude towards each person who has aided me to complete this project named S.W.O.T Analysis of Harley Davidson Motor Company.
XI. REFERENCE 1. Anon . (2011). Harley Davidson Swot Analysis. Available: http://www.powerpassion.nl/harley/story-engels.html. Last accessed 21th Mar 2012. 2. Datamonitor.(2010). Harley Davidson Swot Analysis. Available: http://www.researchandmarkets.com/reports/481474/harley_davidson_inc_swot_analysis. Last accessed 21th Mar 2012. 3. Adam . (2010). Harley Davidson Swot Analysis. Available: http://www.mbatutorials.com/marketing/swot-analysis-marketing/1120-harley-davidson-swot-analysis.html. Last accessed 21th Mar 2012. 4. Richard A. Cox. (2004). Strategic Management Case Analysis. Available: http://www.scribd.com/doc/12517953/HarleyDavidson-Strategic-Analysis. Last accessed 21th Mar 2012. 5. Anon . (2011). Harley Davidson Swot Analysis. Available: http://www.wikiswot.com/SWOT/4_/Harley_Davidson.html. Last accessed 21th Mar 2012. 6. Robert Bears. (2011). A Brief History of Harley Davidson . Available: http://ezinearticles.com/?A-Brief-History-of-Harley-Davidsons-Past&id=3735880. Last accessed 21th Mar 2012. 7. Liecu. (2011). Harley Davidson Swot Analysis. Available: http://www.ereferate.ro/referate/Harley_Davidson_-_SWOT_analysis2007-10-01.html. Last accessed 21th Mar 2012..
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