During 1907, William Harley and Arthur Davidson established the company as two car enthusiasts and childhood friends. They were designed for the first time in 1901 and started business since 1905. In 1905 the company started its first model and formally named Harley Davidson in 1907. The company made huge advances in motorcycle production and development and became the world’s biggest motorcycle manufacturer by 1920.
The company has experienced many economic downturns over the years and has retained its unique image and reputation among its loyal customers throughout the world.
The company is renowned for customized bicycles and accessories and heavy chopper styles. The company produces only 750 CC and higher bikes. The 2012 total sales amounted to approximately £3.4 billion.
Harley Davidson – At A Glance
|Company Name||Harley-Davidson, Inc.|
|Founders||William S. Harley, Arthur Davidson, Walter Davidson, William A. Davidson|
|Headquarter||Milwaukee, Wisconsin, U.S|
|Annual Revenue||$5.647 Billion (FY 2017)|
Harley Davidson SWOT Analysis
Harley-Davidson, Inc. (also known as Harley or H-D) is one of the biggest motorcycle manufacturers in the world. This Harley Davidson SWOT analysis assesses the internal and external strategic factors that influence the company’s competitive advantages and overall development, especially against other players, such as Yamaha, Honda, Ducati, Kawasaki, BMW, and Suzuki. With a strong American brand, Harley-Davidson succeeds by maximizing the business benefits of its strengths and opportunities, against the weaknesses and threats outlined in this Harley Davidson SWOT analysis.
Strengths of Harley Davidson in SWOT Analysis
Harley-Davidson, one of the leading companies in its industry, has many strengths that contribute to its success. Not only do these strengths help protect the market share of existing markets, but they also help to penetrate new markets. Some strengths are in our Harley-Davidson SWOT analysis:
Superb New Market Performance: Harley-Davidson has developed expertise to open up and succeed in new markets. The expansion has helped the company build a new income flow and diversify the economic cycle risk in its markets.
High Customer Satisfaction: the company has achieved a high degree of customer satisfaction among current clients and good brand equity among potential customers with its dedicated customer relationship management department.
Strong Dealer Communities: Distributors and distributors have built up a culture where distributors not only promote products from companies, but also invest in the training of their sales teams to explain to the client how they can maximize the benefits of their products.
Strong Brand Portfolio: Harley-Davidson has invested in the construction of a strong Brand Portfolio over the years. This fact is only emphasized by the SWOT analysis of Harley-Davidson. If you like to expand into new product categories, this brand portfolio can be extremely useful.
Strong Free Cash Flow: Harley-strong Davidson’s free cash flows allow the company to expand to new projects.
Good Return on Investment: Harley-performance Davidson’s of new projects is relatively successful and it makes good returns on capital expenditure by building new revenue streams.
Solid Distribution Network: In the course of years, Harley-Davidson has developed a solid distribution network that reaches the majority of its market potential.
Innovative Products: They have a successful track record of new product development.
Weakness of Harley Davidson in SWOT Analysis
The weaknesses of Harley-Davidson are based on the limited focus and reach of the company today. This component of the Harley Davidson SWOT analysis addresses the internal strategic factor preventing the motorcycle company from expanding, growing and optimizing revenues. The most significant weaknesses of Harley Davidson are:
Lower Achievements Outside of Core Business: Although Harley-Davidson is a leading company in its industry, it faces challenges with its contemporary culture in moving to other product segments.
Introducing Segmentation: The structure of the organization is only compatible with the current business model, limiting expansion in neighboring product segments.
Lack of Choice: There are gaps in the product range sold by the company. This lack of choice can give any new competitor a foothold in the market.
Niche Challenges: The company has not been able to tackle the challenges presented by the new entrants in the segment and has lost a small market share in the niche categories. Harley-Davidson has to build an internal feedback mechanism directly from the sales team on the ground to counter these challenges.
Research & Development: Investment in Research and Development is below the fastest growing players in the industry. Even though Harley-Davidson is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on the tested features in the market.
Opportunities for Harley Davidson in SWOT Analysis
The opportunities of Harley-Davidson have to do both with the potential of the world motorcycle market and with the competitive benefits and growth strengths of the company. This element of the Harley-Davidson SWOT analysis identifies external strategic factors that enable automotive business to grow and improve. Harley-Davidson offers the following opportunities:
Lower Inflation Rate: a low inflation rate gives Harley-Davidson customers a lower rate of credit stability in the market.
New Environmental Policies: The new opportunities will create an equal footing for all players in the industry. It provides Harley-Davidson with a great opportunity to gain market participation in the new product category and gain its advantage in technology.
Pricing Strategy: Harley-Davidson has the opportunity to practice differentiated pricing strategy on the new market with the new technology. It will enable the company to provide a good service to its loyal customers and to attract them with other value-driven offers.
Taxation: The new taxation policy can have an important impact on the way business is done, and it can provide established players like Harley-Davidson with a new opportunity to increase their profitability.
Competitor: The development of the market will lead to dilution of the advantage of the competitor and allow Harley-Davidson to increase competitiveness in comparison with the others.
Shipping Privileges: The lower shipping prices may also reduce the costs for the products of Harley-Davidson and give the company an opportunity either to increase profitability or to pass on the benefits to customers to gain market share.
Online Channels: The company invested huge sums of money in the online platform over the last couple of years. It has opened up a new Harley-Davidson sales channel. In the next few years, the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.
Improved Consumer Behavior: The Harley-Davidson may open up new trends in consumer behavior. It offers the organization an excellent opportunity to create new revenue streams and also diversify into new product categories.
Threats for Harley Davidson in SWOT Analysis
H-D threats are driven by market trends and legal structures. This element of the Harley-Davidson SWOT analysis deals with external strategic factors that decrease or prevent the motorcycle company’s performance. The following are key threats to Harley-Davidson:
Different Liability Laws: Davidson may be exposed to various liability claims given change in policies in those markets. Growing strengths of local distributors also present a threat in some markets as the competition is paying higher margins to the local distributors.
Intense Competition: Stable profitability has increased the number of players in the industry over the last two years which has put downward pressure on not only the profitability but also on overall sales. Shortage of skilled workforce in certain global markets represents a threat to the steady growth of profits for Harley-Davidson in those markets. The demand for highly profitable products is seasonal and any improbable incidents in the peak season can have a short to medium term impact on the profitability of the company.
No Regular Innovative Products Supply: The company has developed numerous products over the years, but these often respond to other players’ development. Secondly, new products do not supply regularly so that the number of sales over time has changed highly and lowly. The rise in pay levels can lead to severe pressure on the profitability of Harley-Davidson especially for $15 an hour and the rise in prices in China. Based on the volatile political climate in numerous markets throughout the world, it is exposed to currency fluctuations in several countries.
Harley Davidson SWOT Analysis Overview Template
Conclusion and Recommendations for Harley Davidson
The Harley-Davidson SWOT analysis reveals that business reforms are necessary. The world market for motorcycles offers growth opportunities, but its product mix is small, its reach is limited and its supply chain is small. The company must also address the trend of environmentalism affecting the competitiveness of petrol engines. Here are some recommendations on the issues raised in this SWOT analysis for Harley-Davidson Inc.:
- Extend the mix of products beyond existing motorcycles by innovation and diversification.
- Manufacturing and sales are expanding globally, particularly in developing markets.
- Change strategies to extend the supply chain globally, to support the development of manufacturing and sales at multinational level.
- Innovate for the environmental friendliness of the Harley-Davidson Brand and Products.