Harley Davidson Five Forces Analysis Essay

In our manifest competitive world in the business where customer preferences argon ceaselessly changing, prices of raw materials and cost of confinement are increasing and orbicular economy is decorous unstable, it is always been a difficult task for companies to pr pointtative and perform business. And these barriers turn out been a familiar scene in the global business. That is wherefore for close companies in disposition to all overcome such of these difficult challenges, innovativeness and the desire to be very critical and around anticipative of the changes in the industry and the whole global economy is highly necessary.Just same(p) for Harley Davidson as the important focal point of this mull over, even though the confederacy currently arrive ated itself for being the highly rated motorcycle shuffle in the world, it is quiet down feather non enough for the union to be relaxed and feel that they bottom be paid and enticing to the market as years goes on . That is why in this musical theme it ordain directly focus on how do Harley Davidsons antagonists are doing at the present, what are nearly of the strategies that they do to compete. With this information near the competitors, how does this information be used by the alliance in terms of opportunities for them to use it as a dodging against them?Also, making use of this information to handle future threats as salubrious, this is in order for them to betoken and provide some immediate actions. In the second part of this paper, it get out focus on how the club disregard retain Porters five forces tool in order to continually grasp competitive advantage over its competitors. Also at the second part of this use up it will handle on how motorcycle companies resembling Harley Davidson, bottom still earn above average return even though the association falls at the high-end market with more on the luxurious and recreation posture and non as necessity for customers.Al so, with that, what are the actors or contributors that will lead to that conclusion or will help attain that goal? Study of Harley Davidsons Major Competitors As the pi maviner and one of the oldest cognise brands in the motorcycle industry in the world, Harley Owners Group has been in the industry since 1983 and due to its growing model worldwide, it already has over 1,000 chapters and over a million members worldwide. But, not all of its members own a steering wheel it is besides the prestige and respect about the Harley machines that made them decide to be a member.As one of the effectiveness of the telephoner, it has been continually establish its brand as the number one brand in the world, with over 5 billion USD annual revenue annually. In terms of its competitors, the comp some(prenominal)s of import competitors, most specially in terms of design are the following BMW, Victory, Honda, Suzuki and Yamaha, but among these lists, Honda has become the closest and toughest competitor of Harley Davidsons motorcycles. (Harley Davidson Motorcycle, n. d. ).With the companys master(prenominal) focus on design, quality and most specially durability, it continuously has been in the forefront of the high-end and luxurious motorcycle business in the world. That is too why 80% of the fall revenue of the company comes from motorcycle sales. With regards to the companys competitor, even though the company clearly dominates the American market as its origin, which has registered in the 2006 market share, the company has eaten up half of the market or 50% while far second and third are Honda and Suzuki with 15. 1% and 12. 9% respectively.But the question flat is not just the American market but instead what this paper is focusing is what the competitors are doing in the global scene. Which is unquestionablely smaller, like for Canadian market, it drops to 38. 4% still relatively high, but what is more grand and getfully to be focus on by the company is on the European market which is only 10. 2%, but still the company has a noticeably high market share globally as it generates at an average of 33%. And this is more alarming because it will in addition follows that the companys net revenue growth also shows very small in other major regions in the world.With this event, it is necessary for the company that it needs to strengthen its presence in these main regional markets, because in the farsighted run, it will be a problem that the company needs to focus on. The cardinal main reasons why these competitors kickoff to entice substantial number of customers are (1) they have greater financial resources, like Honda and Suzuki, with their global presence, they have enough financial support in every region that they operate.Meaning to say these companies comes that they know how to make use of their money in enticing potential customers and retaining current customers as well and they can even compete with price and that will soon be a serious problem with Harley Davidson, since the arguing is on how to innovate with technologically funded studies that will still provide quality as well as make the product still not that so pricy.Lastly, (2) these companies, like Honda and Suzuki are obviously more versatile than Harley Davidson they sell a lot of products with a lot of brands and choices that customers can choose, from cars, to simple scooters up to high-end luxurious brands of motorbikes and not only that with wide variety of choices to choose from. This is another serious problem by the company in the long run, since these competitors knows how they can be well-trusted by the customers and if you made such products with quality in all of it, it will be a positive sign for these companies and that will create problem for the company.With these two main reasons, Harley Davidson needs to shape a strategy that will tot upress these problems in order not to further add problem in the future and also not to wa it until the companys edge in the global market be removed or at least be reduced. Also, based on this study, the company must(prenominal) also discover forward in addressing these issues while they are still get on to operate due to its continuing edge in the global market. (Harley Davidson (HOG), n. d. ). In the second part of this paper, the main focus is on how the company can in effect apply Porters fiver forces model in attaining competitive advantage.The five forces of Porters method that are popularly applied by companies are (1) Potential entrants, (2) Buyers, (3) Substitutes, (4) Suppliers, and (5) Industry competitors. In each of these five forces, in that respect is an important component part that contributes to the chance uponment or failure of each forces and this will be discussed separately as to how the company can effectively apply it. In the entry barrier, where it chiefly focus on the potential entry of new products or brands, the company must continue t o be very pro-active in this part as the competitors are becoming very aggressive in this area.What Harley Davidson should do is to increase the customer awareness of their motorcycle brand in some of the regions that they are starting to have a very low market share like in the European and Asian market. Studying cost advantage and relatively access to distribution are two of the most important focus that the company should do. Also, can be added to that is to have an in-dept study on the Government policies which might be the effect of low market share, because the territories that the company operates must also need to be well represented and not just putting up a business.In the aspiration determinants, which mainly focus on both the industry competitors and new entrant forces, the company should be mainly focus as usual on how they can have advantage over its competitors by not only anticipating future challenges and innovation that their competitors may bring but also be able to establish a well defined marketing and research and development study that will help the company confident enough in dealing with the market.particularly, the factors that it needs to focus are industry growth, always research on the potentials in the business and be first in formulating it to the market, product differences, at this point, which is already been the strength of the company, but still needs to do more and that is innovativeness where it also been the main focus of its competitors. The company must look on how they can provide its clients new and very attractive designs, but it should also have to look on the cost side as well.And lastly, is switching costs, for any company there should also be some intelligent cost study on how the company can still be appreciated by the customers and these can either come from service and parts and of course these should be well accompanied with excellent service and availability of parts which is also a big factor during actua l competition. In the side of threat, what the company should look closely on how the innovative trend and pricing strategy trend that competitors is doing.Most of the time these is what is being target to Harley Davidson, since it has been recognized as a very expensive brand and at the same time more on respecting traditional design, competitors compete through these factors. So, what the company needs is that they have to anticipate these by introducing new and innovative styles and at the same time study some possibilities of offering some not so high cost brands which may also elapse additional leverage for the company.Another important study and important advantage of Porters five dollar bill Forces is supplier power, in this side it is also important for the company not only to look for the most efficient supplier but also study closely in terms of cost. Harley Davidson must be careful in forming up agreement with suppliers. Like they can have global partnership with some s uppliers, most specially if some of these suppliers are proven that they serve the company well. This reduces the cost by having opposite suppliers in the different regions.That is why there are two ways that the company may apply (1) the company must carefully look into suppliers that are effectively performing for the company, if there is, Harley Davidson must look into how they can formulate a global partnership in order to lessen the cost. And lastly (2) the company must also re-visit some suppliers that are not performing well and be able to transpose it or make some better arrangement on how the company as well as the partner can have a more favourable output. Lastly, in terms of buyer concern, where two of the important force involved, buyers and competitors.At this point these are the greatest challenges that the company must look at since the competitors are very aggressive in this area, most specially in the price sensitivity and not much on the bargaining leverage. Pric e is always a problem with the company, since it continuously in the high-end brands. What the company should do is on how they can study on introducing brands that may target other markets which will still not compromise quality and cost. In the bargaining leverage, the company must look on how they can provide some better offers for some big markets, like in terms of wholesalers.Lastly, with regards to the question how can motorcycle companies like Harley Davidson, where its business falls more on luxurious and recreation brand of products which also targets high-end markets, which the question is on how they can continue to earn above average returns. It is obvious that for company like Harley Davidson, they have to focus more on how to deal with innovations is one aspect that they need to do. By change its research and development and the usual attention to customer needs and preference is the key to continually achieve above average returns.Most specially the latter where stil l it is considered as the most important factor in the business. The main actors or contributors that needs to work on this one in order for it to bump are the following (1) Companys human resources, which means that it should continually strengthen the technical expertness of the company, and lastly, (2) is to build partnership with some of the global and most recognized industries or companies which is what is lacking with Harley Davidson.People expertise and partnership through reliable and very influential companies are very important to the success of companys these days. That is why with the help of the management team and its top executives, they need to recognized it as the main key to continually have a better return in the business. Conclusion In this study, it shows that for any company to survive in this very competitive world of business, companys needs to be sensitive enough in understanding the competition and on how they can overcome it.In this paper it shows that even company like Harley Davidson, who still has substantial edge in the market, it still needs to be aggressive and continue to study on how they can attain competitive advantage. Like what resulted in this study that even though the company seems to have control in the American market, competitors are however starting to focus on targeting on market outside the American region, which shows that the company starting to slow down and competitors like Honda and Suzuki are rising up.This also resulted that due to financial capabilities and diverse status of these competitors which starting to kick the bucket problem to Harley Davidson. That is why the company must look on these growing advantages and be able to formulate a strategy that can offset it. In the second part of this paper, it also shows that in order for the company to be aggressive and effectively achieve competitiveness, Porters five forces has been presented and for each forces, there are important discussions on how t he company can apply it effectively and efficiently.