Porter’s Five Forces Analysis done on Harley Davidson Essay

Harley Davidson ashes as a dominant force in the heavy weightiness motorcycle assiduity upholding 50% sh ar in the heavy weight motorcycles. This year they celebrate their 110th Anniversary proudly as the lone(prenominal) major(ip) motorcycle manufacturer to completely focus on motorcycles. (Melief, Bundgaard & Hathaway, 2006) some former(a)(a) major players in the Motorcycle Industry be, Honda, Yamaha, Suzuki that also crap their other major product lines inclusive of cars, watercraft, musical equipment and etc.Assessment of Strengths and Weaknesses of up-to-the-minute and Potential Competitors Porters Five Forces Analysis Source Vector (2012) Internal ambition The heavyweight motorcycle food trade is justly concentrated with four major companies manufacturing these vehicles. Harley Davidson being one of the well-nigh visitd within the industry, Honda, Suzuki and Yamaha ar the competitors that be every from Japan. Over the past few years many merchandise for heavy weight motorcycles has increased annually, but experts be predicting even though the market is growing it will slow down in the years to come.(Melief, Bundgaard & Hathaway, 2006) The agonistic challenge is exalted in motorcycle industry. Most of the time wheels atomic subjugate 18 counted as a extravagance product and pricing the products derriere be complex. (Oxbridge Writers, 2012) Harley Davidson offers sp be split ups, extended warranties, and innovative and environmental friendly motorbikes for their customers, this singularizes them from their competitors. Japans companies have marked their success by establishing a strong militant place in the market using cheap expenditures as their strategy.This strickles customers comprehension on Harley Davidsons place in the market and their prices. However, those having a preponderant place in this sport do have conflicting interests, i. e. Yamaha and Honda have diversified into musical instrument and other motor vehicles. . (Oxbridge Writers, 2012) This results Harley-Davidson in diverseiating themselves as a loyal, specialized Motorbike Company and getting more customers. Harley Davidson has traditionally been the prevailing competitor in this market with taking over 50% of the market sh are.With time it has fallen to below 50 % due to other companies expanding their heavyweight motorcycle production and growing in the market, focusing on American Consumers. (Melief, Bundgaard & Hathaway, 2006) This is because other products from competitors are becoming less distinguished and is comparable to Harley Davidson Products. Recalling, back to the past it was easier to acknowledge Harley Davidson motorbikes for their unique style, but currently Nipponese Manufacturers are merging popular designs to their products.As a result motorbikes from manufacturers are becoming more similar over time. This forces Harley-Davidson to focus more on their branding to maintain the customers. This can be an advantage t o them, since Harley is known internationally for their brand, many people would prefer a Harley over a Honda or Suzuki. only if can also be a downfall since Japanese companies has been improving their products with time. Threat of New Entrants This industry has a very high entry barrier, as it requires high capital to enter to the market.Similar to most manufacturing industries in that location are significant economies involved in building motorbikes. (NCCU, 2012) The manufacturing price of a similar product is extremely high in this industry even for a small scale. This is basically one of the main reasons there are only four major players in the industry. There are some small-scale motorcycle creators whose business s fully rivet on reputation and appeal to motorcycle devotees, to build utterly customized bikes. They do non produce enough motorbikes to threaten the major players in the industry.They do not ingrain the authority of Harley Davidson in the market but can be a n added advantage since it increases interest of motorbikes in the public. Threat of Substitutes and Complements Heavyweight motorcycles are a luxury item for the majority of consumers, so there are very less similar supersedes for heavyweight motorbikes that could seriously affect the market and consumers. (Melief, Bundgaard & Hathaway, 2006) The Japanese manufacturers focus their designs more on smaller, quicker motorbikes that is the closest alleviation followed by cars and scooters.Heavyweight bikes portray a certain persona, which is a part of the grease ones palmsers influences on choosing a motorbike. Smaller bikes are for different riding styles and purposes. They are designed for a different seating position unlike the heavyweight motorbikes. Passenger cars can be a substitute for heavyweight motorbikes but it is a weak substitute. (NCCU, 2012) Motorbike consumers rarely acquire Harleys to fulfill transportation wants. Harley Davidson bikes are more of a luxury item tha n a necessity to travel. Motorbikes maybe easy to travel in heavy traffic and consume less gasoline compared to a car.If a consumer choses a motorbike for the above mentioned reasons, it would be more reasonable to buy a lighter motorbike, which would be easier to handle and fuel efficient than a heavyweight motorcycle. The most profound complement for a heavyweight motorbike is gasoline/petrol. If fuel prices were higher consumers would not consider purchasing a heavyweight bike, because most journeys taken by the bike on much(prenominal) a bike is highly discretionary and will be employ for pleasure rather than for transport necessities.Nevertheless, most of the heavyweight bike consumers are willing to pay between $8000 and $30,000 for this luxury vehicle, they would not mind remunerative just a little extra for fuel. Bar come throughing Power of Suppliers fit to Melief, Bundgaard & Hathaway (2006), Harley Davidson operates nearly every stage of the production of a motorcycle , taking sore materials such as steel and basic electrical components and shipping completed motorcycles to its extensive independent mussinessership network.Because there are many providers of all inputs that Harley Davidson requires for its manufacturing operations there is very little that any single supplier can do the exact rents from Harley. This phrase proves that even if one supplier tries to escalate its receiptss/prices it would not be much of a deal for Harley to switch suppliers without interruption in production. Preferred suppliers approach reduced the number of suppliers Harley Davidson worked with and purifyd the quality of the suppliers as well these long-term contracts and relationship defend Harley Davidson from supplier price increase.(NCCU, 2012) This also grew trust between the suppliers and Harley and their suppliers gained more profit as Harley improved their business. Bargaining Power of Consumers Similar to the Suppliers, Harley Davidsons customers are of large population of respective(prenominal) consumers, making it difficult to badly affect Harley Davidsons financial situation by refusing to corporate. (Melief, Bundgaard & Hathaway 2006) Even though Harleys dealerships are individually owned and operated the companies customers are officially their licensed dealers.But the sheer number of dealers that Harley has all over the world makes situation for dealers not much better than individual riders. Harley needs their customers to buy the product in order to gain profit since Harley is aging they also need to gain more new loyal riders. Each Harley Davidson purchase is by an individual even though one person would not drastically affect the financial earnings of the company it is essential to sell the individual experience to each customer to reach more Markets and combine these sales to improve financial strength. (NCCU, 2012).