Harley-Davidson is ranked the fifth largest motorcycle producer in the world. Harley-Davidson joined the New York Stock Exchange as Harley Owners Group, commonly referred to as HOG. The company is famous for its classic motorcycles which are also a representation of the American spirit and image. The company was established in the early 20s and is renowned for its resilience and survival in the Great Depression. The corporation is a significant producer of heavyweight motorcycles which are mainly designed for cruising.
The success of the company is hinged on its capabilities to address the concerns outlined in the SWOT analysis. According to the SWOT analysis, the most relevant and significant factors in any business are the internal strategic points, referred to as its strengths and weaknesses as well as the external strategic issues typically known as the business opportunities and threats. In the case of the Harley-Davidson company, such factors and concerns are the supporting ethics which has helped in the company’s potential expansion as well as the stable performance in the international motorcycle market (Hill & Jones, 2010).
However, the SWOT analytical system indicates that there are various advancements and changes in expansion plans and strategies for the improvement of the company’s stand and rank in the market. Through SWOT analysis, it is notable that the firm is likely to benefit and gain more competitive advantages and edge through more aggressive expansion with the aim of negating the impacts of vigorous competition (“Harley-Davidson Inc”, 2008).
Internal Strategic Factors: Harley-Davidson Strengths.
The strengths of the Harley-Davidson’s company are primarily connected to the brand image of the firm as well as the market culture they established of chopper motorcycles. This factor of the SWOT analysis system singles out the internal strategic plans that have contributed to the industry’s abilities to grow and develop (Hill & Jones, 2010). In the case of Harley-Davidson, the most significant and crucial strengths are as follows:
- About the heavyweight motorcycle market, the firm has about 70 percent of the total market shareholders which makes it the biggest shareholder of the company.
- The company boasts a strong brand image which is a representation of the American culture.
- It has loyal customers making a stable base. This is coupled up by the fact that it is the only American firm producing heavyweight motorcycles. Additionally, the company offers financial services to its customers. The strong relation extends to even the employees making it durable.
- The company also has a limited supply chain increasing its profits by minimizing unnecessary expenses.
- The company has established a robust and well-organized marketing and supply channel in the United States which facilitates its aggressive marketing strategies and plans.
- The firm has established a perfect relation with its suppliers which ensure the achievement of work integrity and performance while still maintaining quality.
As seen, the Harley-Davidson brand image is among the most famous trademarks in the motorcycle market. The brand image stands out due to the chopper or custom biker culture which is firmly attributed to the Harley-Davidson brand. Additionally, the company has over the many years of operation has developed experience thus enhancing their expertise in the business which adds up to its strengths. The Harley-Davidson’s advantages, according to this element of the SWOT analysis, have ensured the stability of the company regardless of the aggressive and low-cost rivals.
Internal Strategic Factors: Weaknesses of Harley Davidson
Through SWOT analysis, it has been noted that most of the weaknesses affecting Harley-Davidson are majorly related to the current and on-going limited focus of the corporation. This feature of the SWOT analysis system assesses the internal issues which limit the business from maximizing its production and performance (Thompson, Strickland, Gamble & Thompson, 2005). The most outstanding and notable weaknesses are:
- A slim and limited mix of the products. The company does not acknowledge other products and thus do not attempt making any hybrid motorcycles.
- The company also suffers a limited market reach which prevents it from exploring broader markets.
- The company has a limited supply chain which slows its supply of products as well as its marketing.
Through the small mix of products, the firm is unable to explore more market segments. Also, its operations and production are centralized in North America thus nonexistent or insignificant sales in developing nations. The limited supply chain prevents the potential expansion of the firm into the international markets. To support and enhance the global growth and development as well as increase, the company must overcome these weaknesses.
External Strategic Factors: Opportunities for Harley-Davidson
Most of the opportunities that the business is likely to enjoy are linked to the potential of the global motorcycle market. The system of the SWOT analysis has identified the external strategic concerns possible to facilitate the growth, development and expansion of the business (Hill & Jones, 2010). The most significant and essential opportunities within the grasp of the Harley-Davidson company are outlined below.
- International expansion regarding production and marketing of the company and its products.
- Diversification of the product through product mixing.
- Formation of alliances with other complementary corporations and industries. This will increase production and maximize profits while eliminating unnecessary competition.
In reality, the company stands a chance of expansion to developing markets. Through product diversification, the company can produce an array of motorcycles and other related products. Additionally, Harley-Davidson business has an opportunity of establishing business alliances. This will diversify the market and increase market reach as was the case with its partnership and merge with Lehman Trikes. It is notable from the above discussion that according to this factor of SWOT analysis, Harley-Davidson firm has outstanding opportunities to expand and develop its business reach more particularly across the international boundaries.
External Strategic Factors: Threats Facing Harley-Davidson
The threats and risks facing the Harley-Davidson industry are mainly related to not only the trends in the market but also the legal structures and frameworks. This aspect of the SWOT analytical system extends to the external strategic features that are capable of reducing the performance of the corporation (Trendafilov, 2015). The most critical risks facing Harley-Davidson establishment are indicated below:
- Aggressive rivalry and competition
- Imitation and copying by other upcoming industries
- Increase preference and choice of the electric vehicles
The company is threatened by the constant competition and rivalry levelled to it by other motorcycle producing companies. This rivalry and game, however, is also depicted by car plants and industries which produce electric vehicles which sell their products at low prices. Another threat, as outlined, is imitation especially from other established industries providing chopper/custom bikes. Consequently, the trends in environmentalism have adverse effects on Harley-Davidson since its brand and products are known for their internal combustion engine system. The Harley-Davidson company is therefore required by this factor of the SWOT analysis to implement more product innovation plans and strategies with the aim of addressing the threats to their corporation.
Recommendations: SWOT Analysis of Harley-Davidson.
According to the analysis of Harley-Davidson Company through SWOT systems, it is revealed that the business needs various reforms. A growth opportunity is present for the firm in the international motorcycle market. However, the industry is underperformed due to the limited supply channel and its fine mixture of products for a hybrid which can perform better in the markets. In the view of SWOT analysis, the business should also account for the environmentalism trends (Thompson, Strickland, Gamble & Thompson, 2005). The key recommendations made include:
- Widening of the product mix through, creativity, innovation as well as diversification.
- Ensure they expand their product, as well as market, reach globally to reach new as well as developing markets.
- Establish an endless supply chain to ensure that their products are diversified. This can be done through decentralization.
- The company should be innovative to ensure their products are environmentally friendly and can address the trending environmental concerns such as emission of greenhouse gases and global warming.
In conclusion, the SWOT analysis is a reliable system to assists such prominent companies as Harley-Davidson. This helps the business identify their strengths and weaknesses internally as well as point out opportunities and risks they are likely to face.
Harley-Davidson Inc. (2008). Mergent’s Dividend Achievers, 5(4), 123-123. http://dx.doi.org/10.1002/div.7728
Hill, C., & Jones, G. (2010). Strategic management cases. Mason, OH: South-Western Cengage Learning.
Thompson, A., Strickland, A., Gamble, J., & Thompson, A. (2005). Crafting and executing strategy. New York, N.Y.: McGraw-Hill/Irwin.
Trendafilov, D. (2015). Chasing the myth: A Harley-Davidson story(telling). Semiotica, 2015(204). http://dx.doi.org/10.1515/sem-2014-0085