Porter’s Five Forces Analysis done on Harley Davidson Essay

Harley Davidson remains as a dominant force in the heavy weight bike industry ; upholding 50 % portion in the heavy weight bikes. This twelvemonth they celebrate their hundred-and-tenth Anniversary proudly as the lone major bike maker to wholly concentrate on bikes. ( Melief. Bundgaard & A ; Hathaway. 2006 ) Other major participants in the Motorcycle Industry are. Honda. Yamaha. Suzuki that besides have their other major merchandise lines inclusive of autos. watercraft. musical equipment and etc.

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Appraisal of Strengths and Weaknesses of Current and Potential Competitors Porters Five Forces Analysis Beginning: Vector ( 2012 ) Internal Rivalry The heavyweight bike market is rightly concentrated with four major companies fabricating these vehicles. Harley Davidson being one of the most experient within the industry. Honda. Suzuki and Yamaha are the rivals that are all from Japan. Over the past few old ages many market for heavyweight bikes has increased yearly. but experts are foretelling even though the market is turning it will decelerate down in the old ages to come.

( Melief. Bundgaard & A ; Hathaway. 2006 ) The Competitive challenge is high in bike industry. Most of the clip minibikes are counted as a luxury merchandise and pricing the merchandises can be complex. ( Oxbridge Writers. 2012 ) Harley Davidson offers trim parts. extended guarantees. and advanced and environmental friendly minibikes for their clients. this singularizes them from their rivals. Japan’s companies have marked their success by set uping a strong competitory topographic point in the market utilizing inexpensive monetary values as their scheme.

This affects clients perceptual experience on Harley Davidson’s topographic point in the market and their monetary values. However. those holding a prevailing topographic point in this athletics do hold conflicting involvements. i. e. Yamaha and Honda have diversified into musical instrument and other motor vehicles. . ( Oxbridge Writers. 2012 ) This consequences Harley-Davidson in distinguishing themselves as a loyal. specialized Motorbike Company and acquiring more clients. Harley Davidson has traditionally been the predominating rival in this market with taking over 50 % of the market portion.

With clip it has fallen to below 50 % due to other companies spread outing their heavyweight bike production and turning in the market. concentrating on American Consumers. ( Melief. Bundgaard & A ; Hathaway. 2006 ) This is because other merchandises from rivals are going less distinguished and is similar to Harley Davidson Products. Remembering. back to the yesteryear it was easier to admit Harley Davidson minibikes for their alone manner. but presently Nipponese Manufacturers are unifying popular designs to their merchandises.

As a consequence minibikes from makers are going more similar over clip. This forces Harley-Davidson to concentrate more on their stigmatization to keep the clients. This can be an advantage to them. since Harley is known internationally for their trade name. many people would prefer a Harley over a Honda or Suzuki. But can besides be a ruin since Nipponese companies has been bettering their merchandises with clip. Menace of New Entrants This industry has a really high entry barrier. as it requires high capital to come in to the market.

Similar to most fabrication industries there are important economic systems involved in edifice minibikes. ( NCCU. 2012 ) The fabrication monetary value of a similar merchandise is highly high in this industry even for a little graduated table. This is fundamentally one of the chief grounds there are merely four major participants in the industry. There are some small-scale bike Godheads whose concern s to the full focused on repute and entreaty to motorbike fans. to construct utterly customized motorcycles. They do non bring forth adequate minibikes to endanger the major participants in the industry.

They do non impact the place of Harley Davidson in the market but can be an added advantage since it increases involvement of minibikes in the populace. Menace of Substitutes and Complements Heavyweight bikes are a luxury point for the bulk of consumers. so there are really less similar replacements for heavyweight minibikes that could earnestly impact the market and consumers. ( Melief. Bundgaard & A ; Hathaway. 2006 ) The Nipponese makers focus their designs more on smaller. quicker minibikes that is the closest replacement followed by autos and scooters.

Heavyweight motorcycles portray a certain character. which is a portion of the buyer’s influences on taking a minibike. Smaller motorcycles are for different equitation manners and intents. They are designed for a different seating place unlike the heavyweight minibikes. Passenger autos can be a replacement for heavyweight minibikes but it is a weak replacement. ( NCCU. 2012 ) Motorbike consumers seldom purchase Harley’s to carry through transit wants. Harley Davidson motorcycles are more of a luxury point than a necessity to go. Motorbikes possibly easy to go in heavy traffic and consume less gasolene compared to a auto.

If a consumer choses a minibike for the above mentioned grounds. it would be more sensible to purchase a igniter minibike. which would be easier to manage and fuel efficient than a heavyweight bike. The most profound complement for a heavyweight minibike is gasoline/petrol. If fuel monetary values were higher consumers would non see buying a heavyweight motorcycle. because most journeys taken by the motorcycle on such a motorcycle is extremely discretional and will be used for pleasance instead than for conveyance necessities.

However. most of the heavyweight motorcycle consumers are willing to pay between $ 8000 and $ 30. 000 for this luxury vehicle. they would non mind paying merely a small excess for fuel. Dickering Power of Suppliers Harmonizing to Melief. Bundgaard & A ; Hathaway ( 2006 ) . “Harley Davidson operates about every phase of the production of a bike. taking natural stuffs such as steel and basic electrical constituents and transporting completed bikes to its extended independent franchise web.

Because there are many providers of all inputs that Harley Davidson requires for its fabrication operations there is really small that any individual provider can make the exact rents from Harley. ” This phrase proves that even if one provider tries to intensify its profits/prices it would non be much of a trade for Harley to exchange providers without break in production. “Preferred suppliers” attack reduced the figure of providers Harley Davidson worked with and improved the quality of the providers as good ; these long-run contracts and relationship protected Harley Davidson from supplier monetary value addition.

( NCCU. 2012 ) This besides grew trust between the providers and Harley and their providers gained more net income as Harley improved their concern. Bargaining Power of Consumers Similar to the Suppliers. Harley Davidson’s clients are of big population of single consumers. doing it hard to severely impact Harley Davidson’s fiscal state of affairs by declining to corporate. ( Melief. Bundgaard & A ; Hathaway 2006 ) Even though Harley’s franchises are separately owned and operated the companies’ clients are officially their accredited traders.

But the sheer figure of traders that Harley has all over the universe makes state of affairs for traders non much better than single riders. Harley needs their clients to purchase the merchandise in order to derive net income ; since Harley is aging they besides need to derive more new loyal riders. Each Harley Davidson purchase is by an person ; even though one individual would non drastically affect the fiscal net incomes of the company it is indispensable to sell the single experience to each client to make more Markets and combine these gross revenues to better fiscal strength. ( NCCU. 2012 )


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