The macroeconomic environment of any enterprise is indeed a very vital thing to all the operations of the enterprise. This is brought about by the fact that both the present and the future operations of the business are dependent on the surrounding business environment. Harley Davidson has continued to embrace the changes that happen around its operations in order to ensure both sustainability and profitability. The modern global motorcycle manufacturing sector is characterized by stiff competition. It is therefore very essential for all the manufactures to critically assess their strengths and weaknesses and thereafter identify the opportunities to exploit in order to gain competitive advantage. Research and Development (R&D) and innovation in the manufacturing process mark the epitome of Harley Davidson's competitive advantage. It is very essential for a corporation to bank on its competitiveness and maintain it for the prosperity of its product and services.
The macro-environment of a firm is composed of various aspects of the firm's surrounding that are capable of affecting the strategies of the business. The macro environmental variables of an organization are having minimal impact on the operations of a firm as compared to the organization's task environment. The macro-environmental variable consists of socio-cultural, economic, technological, political and legal variables. It is important for a firm to consider these variables in order to understand the various threats as well as opportunities that can be created by the specific variables. They also help in indicating how the strategic plans can be effectively adjusted so that a firm can acquire as well as retain a good level of competitive advantage. The microenvironment is made up of forces that emanates from outside the firm and can never be effectively altered by any form of actions of the firm. This is to say that the organization can be influenced by the macro-environmental forces but it can never influence these environmental forces.
Socio-cultural and demographics
Lifestyles and societal values vary over time. Several socio-cultural and demographics factors directly affect the motorcycle manufacturing industry. The fact that in this generation women can work outside their homes and join the workforce means that they have an improved spending power (Newsweek, 2010). This increase in the spending power of women is an economic factor that can effectively be employed to develop products and services that target women in the motorcycle manufacturing industry. The other socio-cultural factor that needs to be considered is the attitude towards new scientific marvels of going green.
In terms of demographics, the BRIC countries (Brazil, Russia, India, and China) which are experiencing exponential growth offer a perfect opportunity for the sale of motorcycles.
Demand for green products
The demand for green products is a part of the natural macro-environmental force which can closely be associated with the larger socio-cultural environmental forces that effect product sales. Nature is the main source of raw materials that are use in the production of most products. The raw materials could be renewable, depleting or infinite in its supply. It is important that all the raw materials be preserved and any form of wastage be curtailed. The ecology should be preserved by appropriately minimizing pollution. This is by means of eco-friendly (green) technology. The concept of eco-friendliness and going green can effectively be used by marketers in the motorcycle industry in order to win more customers. The concept of going green in the motorcycle industry involves the research and development of hybrid, e-motorcycles as well as hydrogen-fuel-cell motorcycles. The process has several merits. It however also has its fair share of challenges as pointed out by Schwartzapfel (2008). The fact that companies such as Harley Davidson are already established means that the incorporation of green technology in their production and marketing mix can effectively bring a positive jolt to their brand and corporate image. This would in turn be reflected on their performance. This is reinforced by the fact that green demand amongst customers is rapidly getting stronger (PWC, 2008).
In regards to demographics, the statistical figure that baby boomers comprise of approximately 25.8% of the United States population (Briand, 2009) is a factor for motorcycle manufacturing industry to consider in their marketing mix. The fact that they have higher income than the media United States population is another opportunity that can be exploited by the motorcycle manufacturers (Dell Web, 2010). The opportunity is derived from the fact that baby boomers have a higher income and are constantly refusing to acknowledge that that are aging. This makes them a perfect target for luxury products and services. The threat to the reliance in this market segment is based on the fact that the baby boomers eventually get too old to use the luxury products that they thought were appropriate to their lifestyle thereby leaving a demand vacuum.
Legislation is yet another important micro-environmental force that the motorcycle manufacturing industry must reckon with. The legal environment that firms are facing is rapidly becoming complex and has a rather direct effect on their operations (Thomas, n.d). This has made it very difficult for the businesses to operate without being affected by a legal, compliance or regulation problem. The most significant legislations that affect the motorcycle manufacturing business are in the domains of positive consumerism, competitive practices, environmental issues and employee relations. Most of these laws are associated with several regulatory bodies. They include Environmental Protection Agency (EPA), Equal Employment Opportunity Commission (EEOC), and Occupational Safety and Health Administration (OSHA).An analysis by Thomson Reuters' Governance, Risk and Compliance (GRC,2011) indicated that the cost of compliance is to continue rising with time. In the motorcycle manufacturing arena, corporations such a Harley Davidson must comply with the various regulations that affect their trade. The noise statutes for example are one of the regulatory compliances that they face. In the U.S. foe example the federal laws require all motorcycles to have their noise below 80 decibels from a point located 50 feet away from the motorcycle (Fredrix, 2007). This could negatively impact their sales. The regulatory requirements are very expensive to meet and maintain. This is therefore a great threat to the motorcycle manufacturing industry.
The economic environment is crucial for the sales and manufacture of motorcycles. The current status of the economy is not very good as a result of the recent economic downturn. It is therefore important for Harley Davidson to understand the current economic condition as well as predict the future economic conditions. It is worth noting the current oil prices calls for the manufacture of fuel efficient motorcycles. The decline in the median income also has an effect on motorcycle sales. A report by the Motor Cycle Industry Association (MCIA, 2010) indicated that the recent economic downturn reduced the sale of motorcycles by roughly 20%. The global economy is however in recovery but the high unemployment rate coupled with a decline in the level of media income means that fewer people are likely to indulge in the purchase of the high-end, luxury motorcycle products and services.
Technology presents both a potential threat as well as potential opportunity to the established Harley Davidson products. Other competing firms have introduced and are in the process of introducing new and complex technology that is more refined making it extremely hard for Harley Davidson to assess their true market potential. The introduction and enforcement of the CAFE standards has seen the fuel economy of cars and motorcycles improve. This has been coupled with the introduction of hybrid versions of the cars and motorcycles as well as technology for alternative fuels such as hydrogen. The improvement of fuel economy is important to the current global economy as a result of the decline in the median income as well as the ever rising price of fuels. The downside of the hybrid technology is that some of the hybrid cars and motorcycles may end up being more expensive when compared to their conventional counterparts. The opportunity presented by this technology is that it can allow for the production of more economical and fuel efficient motorcycles to replace the expensive car whose maintenance has been worsened by the decline in median income, lack of employment and exorbitantly high prices of gas.
Business Level Strategy
The business level strategy at Harley Davidson is in line with its enterprise and corporate strategies. In the motorcycle industry, the corporation is striving to build its products and services very close to its customers in a total of 21 plants that are spread across 21 countries. The corporation also conducts Research and Development (R&D) in a total of six countries. The research and development system is tailored in its approach in order to produce products and services that are…