Harley Davidson's competitive position

Competitive position

Porters five forces

We have used Porter five forces as an analysismodel, because it is good to elucidating the company’s competitive position on the market.

Threats of new entrants

The entry barriers are very high on this market, new entrants need a lot of capital to investments and it is very difficult for a new company to position themselves on this market, because of the many big competitors. This is why the threats of new entrants are very low.

Threats of substitutes

There are high numbers of substitutes to Harley-Davidson’s product. Even cars and other means of transportation. The superior substitution to Harley-Davidson’s products are the motorcycle manufacturers. Harley-Davidson’s main competitors are Honda, Suzuki, Yamaha, and Kawasaki. Harley-Davidson has differentiated their products to a luxury vehicle, so they have themselves from these competitors, but manufacturers as Dog motorcycles and American IronHorse, which actually delivers more customized American motorbikes than Harley-Davidson, has come along with Harley-Davidson’s success. The force from the threats of substitutes is strong, because of the many substitute products on the market.

Bargaining power of buyers

Harley-Davidson’s average customer is now 48 years old, their average customer has been getting 6 months older every year for the past 20 years. The younger generation today would rather have smaller and cheaper Japanese motorbikes, which is a completely different design than what Harley-Davidson can offer to the market. The younger generations need to be attracted by what Harley-Davidson can offer if they want to maintain a long-term strategy. Harley-Davidson is strictly tied to its customer’s loyalty; this is why the bargaining power of buyers is a strong force. The buyers have easy access to substitutes, so they make a real threat because the customers are enable to move from Harley-Davidson and use substitutes instead.

Bargaining power of suppliers

The suppliers of parts to the motorcycle could be hard to find, and the suppliers of special parts has a potential to influence the market, as more of the suppliers are customizing the parts in collaboration with Harley-Davidson. However, Harley-Davidson is a huge company, which makes it a minor threat, because Harley-Davidson has such a great influence on the market that it would be a huge loss not to cooperate with Harley-Davidson.

Industry rivalry

There are four major competitors; Honda, Suzuki, Yamaha, and Kawasaki. Harley-Davidson has differentiated themselves to a more luxury vehicle and even though Harley-Davidson has tried to keep up with the competitors, more of these major competitors are increasing their market share worldwide. Some of these competitors have larger financial and marketing resources, which makes it difficult to keep up with the competitor’s developments. Harley-Davidson must maintain its brand and quality to protect its segments from other firms. Harley-Davidson has an opportunity to increase their product development and invest in technological innovation to keep up with the major competitors in the industry.