Conclusion on analysis of Harley Davidson

SWOT-analysis

 

SWOT
Interne forhold
Strengths	Weaknesses
Known and strong brand across the world Strong company structure Employees from many different countries (diversity) Providing opportunities for professional growth and leadership development Partnerships with diverse businesses, both suppliers and dealers   Focus on product development Customization Offer a lot of events for their customers Great service Offer a lot of extra features Loyal customers	Premium pricing strategy The average customer is getting older every year Limited marketing Many partners, which makes it hard to co-operate closely with all of them Weak product mix - prevents the business from getting into new market segments Limited market reach
Eksterne forhold
Opportunities	Threats
Focus on marketing to young adults by producing cheaper city motorcycles. Expanding to new markets New models of motorcycles Try to shift market position The old retro design is a trend again Products diversification Make close co-operations/alliances with suppliers and complementary business	The average customer is getting older every year Four big competitors with a big financial capital Big competition on the market in general Imitation High focus on the environment

Conclusion on our SWOT-analysis

Harley-Davidson’s strengths are primarily the brand, which is known for the design and good service. They focus a lot on product development and they have many years of experience, which makes them kind of experts in the field. Besides that, they have loyal customers, which is a huge advantage. The most noticeable weakness of Harley-Davidson is their weak product mix. They focus a lot on the “chopper”, which makes the market limited. in addition to that, most of their margin comes from Northern America and they do not try to sell more in developing countries or anywhere else. Harley-Davidson has the opportunity to expand to new markets. That could be done by making new models of motorcycles so that they reach more potential customers. In that way, they can improve their product mix. Besides that, they have the opportunity to make close co-operations with their suppliers, dealers and complementary business, which would improve their supply chain and partnerships.

Many things are threatening Harley-Davidson as a company. In general, there is a big competition on the market. Harley-Davidson has some big competitors that make substituting low-cost products. Furthermore, many of the competitors make the same “chopper” motorcycle as Harley-Davidson. Another thing that is trending right now is the focus on the environment. In some way, that is a threat to Harley-Davidson and could have a negative impact on Harley-Davidson. All things considered, Harley-Davidson has more strengths and opportunities than weaknesses and threats. however, they still have some things to work on if they will improve their company. They need to adapt to changing circumstances if they want to survive and still be a big player when we talk about motorcycles. 

Harley Davidson's value chain

Value chain

The company is a partial order-producing company. They have the most common models in stock. The rest is being produced after customized orders.

We have chosen to conduct an analysis of Harley Davidson’s value chain because the model is good at elucidating what the company does that adds value to both customers, suppliers and employees. The model can elucidate what the company does to stand out from the rest. Furthermore, it can create an overview of the company’s structure and working method.

Support processes

Company infrastructure

Harley Davidson is kind of a family-owned company. It was founded by three brothers, the Davidson brothers, and one more person, Bill Harley. The headquarters is located near the shed where it all started in Milwaukee. The companies’ focus is on the motorcycle markets in developed countries, especially the United States.

They have a structure divided into function-based groups. The main groups in Harley Davidson’s organizational structure are:

• CEO’s office
• Communications
• Human Resources
• Harley Davidson Foundation
• Global Demand
• Financial Services
• General Counsel
• Finance
• Motor company product & operations

Harley Davidson uses centralization in its organizational structure. They have a central command system from where they control everything. The main control base for the global business is the headquarters. This type of structure guarantees direct and immediate control. 

Harley Davidson support national organizations, which are dedicated to promoting diversity in the workplace. For example:

-          Catalyst

-          National Society of Black Engineers

-          Society of Women Engineers

-          National Black MBA

-          National Society of Hispanic

Human Resource Management

Harley Davidson has 6400 employees worldwide.  

Harley Davidson compares themselves to steel. Steel is strong because it is made from a combination of elements like iron, carbon and nickel. They think they are strong because their employees come from many different backgrounds and bring ideas, perspectives and experiences that are unbreakable. The culture in the company is providing opportunities for professional growth and leadership development.

“We demonstrate behaviours throughout our organization that exemplify integrity, accountability, diversity, teamwork and creativity. We also recognize that great companies require great leaders to ensure a sustainable future and strive to build leadership at every level of the company”.

They are trying to train their employees to actively cultivate productive relationships with diverse business - so results can happen. Harley Davidson has a business development program that provides scholarships to minority and female executives seeking to enhance their business management expertise. The Scholarship recipients attend intensive educational programs conducted at some of the nation’s most reputable institutions. The programs combine business theory along with practical application and offer opportunities to learn from entrepreneurs and educators.   

Technology Development

Most of the motorcycles and stuff for them are being made in York, Pennsylvania. Otherwise they produce some stuff outside the US in among other things in India. Harley Davidson owns a product development center in Wauwatosa, Wisconsin. Functions such as new product, development, testing, styling and developmental purchasing for Harley motorcycles takes place here.

 Primary Business Processes

Inbound logistics

Harley Davidson has a big diversity of suppliers. They are looking for partners who can make innovative solutions.

“Supplier Diversity is a key aspect of Harley-Davidson’s business strategy. By engaging diverse suppliers, we are able to create a more competitive supply base as well as stimulate economic development." - Michelle Kumbier, Senior Vice President, Motorcycle Operations.

Operations

The company has 36 different motorcycle models. Furthermore, you have the opportunity to customize your own bike. You can both customize some parts of your bike or you can make a whole new bike, original and unique, for yourself.

Outbound logistics

Harley Davidson has nearly 1,435 dealerships globally. The majority of these dealerships are located in the US, Europe and Canada.

Marketing and sales

Harley Davidson makes a lot of events for both their existing and potential customers. They are a big sponsor within the motorcycle world. 

Service  

Before you buy a Harley Davidson bike, you are allowed to try it. As a special thing, Harley Davidson offers courses where you can learn to ride. They offer two different courses; One for new riders and one for skilled riders. If you don’t want to buy a Harley-Motor cycle but want to try it or you just haven’t enough money for a bike, you can rent a bike. It could be a once in a lifetime experience. If you want to buy a Harley motorcycle anyway, the company offer loans and the opportunity to pay in instalments. Now, that we are already down that ball game, we have to mention the “speed dating”. Here you get the opportunity to get a demo ride on different motorcycles. It is a good way to try several different Harley-Davidson motorcycles and find the perfect match.

When you have found the perfect match, you want to take extra good care of your new motorcycles. Therefore, Harley Davidson has repair shops specialized in accurate your model of motorcycle. In addition to that, it is possible to get an insurance for your bike. As any other company, Harley Davidson offer customer service so if you got any problems, you can always get into contact with them. As extra features, Harley Davidson offer a ride planner app, road trip tips, an overview of motorcycles law divided in states and other things like a special GSP and radio system.

 Conclusion

Harley-Davidson differs from their competitors at especially service and technology development/operations. They have a great service and offer a wide range of extra features, which adds value to their customers. Besides that, they focus a lot on product development. They are also adding value to their company by having a strong structure in the company and a strong human resource management. They try to add value to their employees by giving them opportunities for professional growth and leadership development to keep them motivated. Furthermore, they focus a lot on having partnerships with diverse business. Harley-Davidson is weakest in marketing and sales. They focus a lot on their already existing customers and not as much on new potential customers.

Harley Davidson's strategies

Strategies

Target subject

We use target subjects to figure out company's targets. What do they want to increase and how are they going to do it?
 All companies have some target subjects and of course, Harley-Davidson has some as well. A target is an expression for a required future condition. Normally target subjects are things as increased turnover and increased sale but also profit is very important. For Harley-Davidson is increased knowledge also important when they need to find a new target group because their target group is getting older. Harley-Davidson has a huge market share on the American market, but a higher market share is also a target for a company. The article below informs us about that their sales are going down, so an increased sale might be their most important target.  

Strategy for growth

When analysing a company’s strategy for growth, we analyse which strategy that will give the company most growth.
 Market penetrationHarley-Davidson has different strategies to make the company grow. The primary strategy is market penetration. They are trying to make the company grow by reaching more customers in their current markets. They try to differentiate from their competitors and reach new customers by doing this. They are starting to offering cheaper financing to some buyers.
 Product developmentThe company has also tried to increase their market share by product development, they have tried by making the vehicle sportier and to focus on the younger generations. They are also announcing new products to make it interesting to invest and buy their vehicles. Harley-Davidson announced new products in august 2015, where they also hoped to spur sales by doing so.
 They have come up with customization of the choppers, so more of the customers can be attracted by customizing their vehicle to get a unique experience with Harley-Davidson. Even though many competitors have come up with the same idea, Harley-Davidson differentiate from their competitors with their brand and by their design of their motorcycles.
 Market developmentHarley-Davidson uses market development to entering new markets. They have previously focused on global expansion, Harley-Davidson had begun its market development plans with international markets such as Europe and China. In their global expansion, they focused on direct distribution. Survival modelWe use the survival model to consider how the future situation of a company may look like. The survival model distinguishes between whether the company is good at differentiating themselves and whether they can produce at competitive costs. Harley-Davidson Inc. is one of the most prominent motorcycle manufactures in the world. The company has achieved this market position through its generic strategy or competitive advantage and its intensive strategies for growth. Harley Davidson has focused on differentiation because their generic competitive strategy pushes for product innovation. Harley Davidson uses its innovation processes to ensure competitiveness against other popular motorcycle manufactures. So they are very innovative and try to differentiate from their competitors by being innovative. Also, Harley-Davidson’s intensive growth strategies indicate product innovation along with increased reach in the global motorcycle market. However, the company could benefit from some adjustments in its intensive growth strategies. Harley-Davidson’s generic strategy for competitive advantage and intensive growth strategies are supportive of resilience in the face of market fluctuations. 

Generic competitive strategy

We use Porter’s generic competitive strategy to analyze how the company can get the biggest competitive advantages compared to the competitors.
 Harley Davidson has a huge target group and a unique product and they apply differentiation as its main generic strategy for competitive advantage. Unique product features are the main point in this generic strategy. For example, Harley-Davidson popularized the chopper motorcycle style through unique customization. They produce unique products as customize motorcycles and that how they differentiate from their competitors. However, the company also uses the focus generic strategy in combination with differentiation. The focus generic strategy supports competitive advantage by increasing Harley-Davidson’s customer base in certain market segments. For example, the company focuses on motorcycle enthusiasts, especially those who are interested in the chopper biking culture. A strategic objective linked to the differentiation generic strategy is to build Harley-Davidson’s competitive advantage based on unique product innovation. In relation, the focus differentiation strategy leads to the strategic objective of strengthening the chopper biker culture that enables Harley-Davidson’s competitive advantage in this market segment. 

Red and blue ocean

We have used the red and blue ocean analyse as a conclusion on the company’s competition, their competition strategies and how they differentiate themselves from their competitors.
 Harley-Davidson is on the blue ocean. On the global market, Harley-Davidson has four major competitors; Honda, Suzuki, Yamaha and Kawasaki, that is only a few but big competitors. Harley Davidson has differentiated their products to a luxury vehicle, so they have differentiated 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. Harley-Davidson’s focus are on unique products and a high service. They produce unique products as customized motorcycles and that is how they differentiate themselves from their competitors. Harley-Davidson has focused on differentiation because their generic competitive strategy pushes for product innovation. Harley-Davidson uses its innovation processes to ensure competitiveness against other popular motorcycle manufactures. So they are very innovative and try to differentiate from their competitors by being innovative. That is why they are on the blue ocean, because they have big competitors but they are good at differentiating themselves from their competitors and their focus are on unique products.

  

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. 

The buying behaviour of Harley Davidson's customers

The buying behaviour of Harley-Davidson’s customers

Factors that have an effect on the buying behaviour:

Cultural factors:

As a consumer the society around you and the culture you are coming from affects you in the way you are buying products. If you are grown up in a neighborhood with special traditions and norms, then you will naturally have a different buying behavior than if you come from different traditions and norms. If you are grown up in a family who are driving Harley Davidson, and who thinks that is the best brand in the motorcycle industry, then you are more likely to buy a Harley Davidson. Because you are grown up with them, as the best brand. If you divide culture into a subculture, it is mostly motorcycles enthusiasts and bikers who buy a Harley Davidson. If you divide culture into social classes, then it is people in the middle class and up who is buying and can afford a Harley Davidson.

Social factors:

Reference groups as friends or family can affect the buying process. If you are a part of a group of friends who are all driving Harley Davidson, then you are more likely to buy a Harley Davidson too, because you are identifying yourself with them.  

Personal factors:

People who are interested in Harley Davidson motorcycles are mainly middle-aged men. People with a low income in America are not so likely to buy a Harley Davidson motorcycle because they are expensive. The high prices make it more possibly to buy for people with a middle or high income.

Psychological factors:

Everyone has a need to cover. According to Maslow´s Hierarchy of Needs buying a motorcycle is a psychological need, when you have your physical, safety and social needs covered then comes the ego need, where buying a Harley Davidson belongs. If you want a motorcycle in the social need, you don't care so much about which one it is and all the details about the product. What you care about here is to be a part of something social, a motorcycle group as an example, and what kind of motorcycle it is, is not so important. But in the ego need, you want something special, you want to show confidence and have a status in the group, it is here you feel the need to buy a more exclusive motorcycle, a Harley Davidson. In some cases, men are actually buying a Harley Davidson, just because of the way it looks and not because of the technology. Some men just want a special product and a cool design and then the technology comes as secondary importance.

Buying motives:

When you buy a Harley Davidson it is both a functionally and a social buying motive. It is a functionally buying motive because the Harley Davidson is so expensive, so it is naturally to consider the product before you buy it. Buying a Harley Davidson is for some a buying they have been saved money for in a long time. A Harley Davidson is not a product you just buy. It is a social buying motive because it is the snob-effect. It is the snob-effect because many people who are buying a Harley Davidson wants to buy something that everyone does not have, and at Harley Davidson, the consumers have the opportunity to customize their motorcycles.

Buying behaviour process:

When buying a Harley Davidson motorcycle, the buyer is very involved. When buying a Harley-Davidson, it definitely a buy you have been considered about in some time. It is called a complex behaviour when buying a motorcycle because this product is in huge interest for the buyer and their self-image and it is an expensive product. When the buyer is showing a complex behaviour, the person has been searching for information in the form of brochures, the internet, magazines, and advertisement.  

Decision process:

First the consumer finds it a problem that he or she doesn't have a Harley Davidson, or if he or she already have one, then the newest one. The consumer begins to search for information and alternatives to make the right decision. The consumer now has to decide whether he or she wants to buy or not buy. If the person chooses to buy, he or she must decide where to buy the motorcycle, which one and how to pay.

Harley Davidson's Target group

Target group

Harley-Davidson has been growing its appeal through several generations, cultures, and borders.

But in the last couple of years have they decided to change their marked strategy, to focus more on growth in sale among young adults, women, African-Americans, and Hispanics.  As a result of this, have they over the last five years have been an increasing number of first-time-on-road-riders who have purchased in a new Harley-Davidsons motorcycle. In the US have Harley-Davidson grown a more diverse customer pool and but still have they also grown among their traditional costumes. For in 2015 was Harley-Davidson the number one seller of new on-road motorcycles to young adults ages between 18 and 34 years, women, African Americans, and Hispanics. And also in their target group Caucasian men over 35.

Harley-Davidson customers are distinguished, unique men over 35 and women from various occupations, backgrounds and social status who value their individuality and the "riding experience" that only Harley can give. The market can be defined into five segmented categories.  First, there are “The Prestige Riders” that include CEOs, CFOs, CIOs, V.P.s, those are the management position holders that purchase motorcycles and invest in the company. Second is there “The Knight Riders” who have the little-vested interest in long-term usage, these customers tend to purchase as an alternative means of transportation. Then comes “The Die-Hard Riders” who are a passionate loyalty to their motorcycles and to Harley Davidson.  Besides that, there is also “The Rescue Riders” which include Police officers, Public Safety, Municipal Officers, firemen and so on. At last, there are “The Sterling Silver Riders” who are a group of customers that are made up of senior citizens who want to preserve their youth. What all the segment groups have in the comment that most of them are all Caucasians men over 35, and that makes them to Harley-Davidson's' major target group. The target group stands for about 65% of Harleys' income. But in the last couple of years has Harley-Davidson started to focus on younger target groups, by focusing more on designing city motorcycles to a cheaper price.

Harley Davidson's marketing mix

Marketing mix

The four p’s have been used to get an easy view over Harley Davidson's marketing mix.

The four P's

Product

Harley-Davidson has maintained a certain level of wow factor when it comes to providing bike models in the market. They have always been aiming for heavily built bikes, which contain a strong engine, which gives both power and the trademark thumping sound, which gives an experience which no other bike gives. Another trademark of Harley-Davidson is the designs, which are customized as per the biker and which make every bike unique. They offer customers a variety of models to choose from, apart from dealing with accessories, and engines, that can be traded cheaply, as the bikes are highly customizable and option windows are open to its customers and prospects. Besides selling bikes Harley-Davidson also sells merchandise and biker clothes, and all kind of different accessories to the bikes.

Promotion

Harley-Davidson's promotion is very strategically designed and complicating which is Harley-Davidson has maintained its class through the years. Harley-Davidson’s promotional mix contains five strategies, personal selling, advertising, sales promotion, public relations and direct marketing.

Harley-Davidson promotes a lot by personal selling, the selling technique is used to encourage customers to explore and try the company’s motorcycles at the Harley-Davidsons stores. Harley-Davidson also uses public relations, by organizing and supporting their club the Harley Owners Group in different rallies in various locations, by promoting and increase awareness about the company’s brands and products. Sales promotion is often used in their marketing mix. Because of their strong product portfolio, Harley-Davidson does not believe in generalizing itself and therefore advertises they only in the top magazines, hoardings and print media. But the major pull of the product is created through the product and by displaying the product. But what Harley-Davidson promote most over the year is what they stand for. Such as quality, strength, friendship, and enjoying the journey of life. Harley wants to encourage its customers to take to the road and drive the bike to the fill of their heart.

Place

Harley-Davidson has got a fantastic brand equity which has resulted in a distribution all over the world. For this to happen has Harley-Davidson made dealerships with retailers from all over the world, so they can be authorized Harley-Davidsons dealers or rental dealers. Besides that, has Harley- Davidson also an online store. Harley-Davidson has established production three places is in the world, in India to the Asian market, in Brazil to the Hispanic marked and one in America.

Price

Harley-Davidson deals with mainly heavy built chassis and high displacement engines, this gives their products a particular level of quality, which is also what their segment of customers are expecting. Harley- Davidson has always been following the premium pricing strategy and has absolutely no excuse not to. But due to this policy, have the company experienced a lot of setbacks and has also gone through red periods in its profit curves. But besides that to this day, they still carry its bandwagon strategy forward.

Harley Davidson's vision and mission

Vision & Mission:

Harley-Davidson is the fifth biggest player in the global motorcycle market. The company is known for manufacturing heavyweight motorcycles.

The following are the main components of Harley-Davidson’s vision statement:

• Action-oriented business
• International scope
• Leadership in stakeholder management
• Employee empowerment
• Value-added activities

In this vision statement, Harley-Davidson emphasizes the importance of an action-oriented approach to developing its business.

Mission statement:

Harley’s mission statement is “we fulfill dreams through the experiences of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments”.

The following are the components of Harley-Davidson’s mission statement:

-       Fulfilling dreams through motorcycling

-       An expanding line of products and services

-       Selected market segments

Harley-Davidson’s mission for a growing business is to use dream fulfilment and the experiences of motorcycling. Harley-Davidson’s mission is also to emphasizes the significance of expanding its product mix, they are expected add more products to their line to grow its business. Moreover, Harley-Davidson mission is to uses marked segmentation to focus on certain groups of customers in the global motorcycle market. Harley-Davidson’s mission is also to point the strategic objective of maintaining a strong brand-related motorcycling culture to attract and retain customers.

Market concept:

“Fulfilling dreams of personal freedom is more than a phrase. It's our purpose and our passion. We bring a commitment of exceptional customer experiences to everything we do - from the innovation of our products to the precision of our manufacturing - culminating with our strong supplier and dealer networks. We are Harley-Davidson.”

Harley Davidson

In connection with our school trip to Madison and Chicago in the US, we have made an assignment to the American company Harley-Davidson. First, we have made a company description and that, include the company’s vision and mission. After that we have analysed the company’s marketing mix and their target group. We have also looked at the buying behaviour when buying a Harley Davidson. Thereafter we have analysed Harley Davidson’s competitive position and their strategy for growth. Finally, we have made a supply chain before we at the end have a conclusion and an SWOT-analysis.

Company description

Harley-Davidson was founded in 1903. Four ambitious entrepreneurs built the first Harley Davidson motorcycle inside a small wooden shed in Milwaukee, Wisconsin. Three of the entrepreneurs were brothers and shared the same last name Davidson, and the last entrepreneur was Bill Harley.  That is where the brand name Harley-Davidson comes from. Today Harley-Davidson has more than 6400 employees spread around the U.S and abroad. The headquarters is located near the shed where it all started in Milwaukee. Manufacturing is done at different locations in Wisconsin, York, Pennsylvania.