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External Analysis Motorcycle Industry
External Analysis of the Motorcycle Industry
Harley Davidson
Harley Davidson, the heavy-bike manufacturer holds the purpose of fulfilling dreams of personal freedom (Purpose: Harley Davidson, 2013). The company functions in segments of Motorcycles & Related Products and the Financial Services. It is however globally known for heavy bikes that have engine displacement of 651+cc (Harley-Davidson Inc. 2013). The company enjoys a unique position in the market yet it is exposed to many new market challenges in recent future. The demand for heavy bikes has increased among those that are not necessarily filthy rich and other companies are also entering the industry. Here is the PEST analysis of Harley Davidson to study what challenges it is facing in external environment.
PEST Analysis
The PEST analysis offers a detailed picture of how the macro environment factors affect the performance of Harley Davidson. The PEST stands for Political, Economic, Social and Technological factors. The components of PEST are discussed below:
Political: The Harley Davidson is symbol of biking adventure in USA. The company enjoys political connections that can be used to expand in the economies of China and India. The company, being the American icon, can capitalize and leave its competitors behind. The Environment Protection Agency regulates the industry and HD needs to comply with the ruled set for standard operations.
Economic: It was not merely America and its national markets that were affected by the economic recession after 2008. The global markets are also facing tough economic challenges. The HD is thus not alone in its quest but it should not let the economic pressures overcome its productivity. The price of the race materials has reasonably increased over past few years that can be an economic challenge given the fact that the per capita income has not significantly increased. The foreign economies are also of a great interest for Harley Davidson since McBee (2011) states that overseas markets will make...
The people near retirement are the major clients since they have fulfilled life responsibilities and are about to have excess of money for luxury. The lifestyle of people affects the purchasing trends of heavy bikes.
Lifestyles are changing globally as well as nationally. More and more people are interested in owning the heavy bike to enjoy freedom and power. There are clubs of Harley Davidson where male adults like to have the HD experience. The early retirement trends might affect the market for the Harley Davidson since it may decrease the luxury-item purchasing power of the social groups.
Technological: The economic and environmental concerns demand the energy efficient fuel alternatives. The customers are interested in technology driven to achieve environment friendly solutions. Harley Davidson is manufacturing V-Engine that is used in its bikes. Thus the company is interested in ever new technologies for producing Green solutions. Also the HD bikes offer a variety of bikes that can be used in different areas for example tourism, steep biking etc. Technology affects not only the design of bikes but also the communication systems that drive the marketing and advertisement campaigns.
Porter's Five Forces
The Harley Davidson is a company that faces environmental challenges. These challenges can be discussed in the light of how Porter discussed them. These encounters are by substitutes, bargaining power and competitors.
Threat of New Entrants: The heavy bike industry requires heavy initial investment. There are many complexities in the business as well. It needs to have a strong research and development center and to master in technological understanding and use. This limits the access of new entrants into the market. Also, the brand name counts a lot in luxury item markets. The already established brands…
References
Engel, J., (2013), "Polaris challenges Harley-Davidson with 3 Indian motorcycles," Retrieved
from: http://www.bizjournals.com/milwaukee/blog/2013/08/polaris-challenges-harley-davidson.html?page=all
Harley-Davidson Inc. (2013), Retrieved from:
http://topics.nytimes.com/top/news/busi ness/companies/harleydavidson_inc/index.html
Purpose: Harley Davidson, (2013), Retrieved from: http://www.harley-davidson.com/en_US/Content/Pages/Company/company.html?locale=en_US&bmLocale=en_US
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