Porter’s Five forces Analysis
Harley Davidson’s goal for perfect competition relies on Porter’s five forces framework such as market rivalry whereby a business organization competes favorably in the global market arena as part of maintaining a well established competitive edge. The company’s market share and industrial concentration are favorably stable.
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This is due to its diverse product differentiation and the ability to raise and lower commodity prices without incurring losses. Although it is faced with threats of product substitute that emanates from other market players, Harley Davidson overcomes the challenge of accessory substitutes by making frequent replacements.
On the same note, the global market is threatened by incumbent firms that tend to increase barrier to entry of new and smaller firms. However, Harley Davidson uses the barrier strategically through price reduction in order to gain competitive advantage.
PESTEL analyses for Harley Davidson Company
Managers at the Harley Davidson Company are faced with diverse macro-environment challenges that impact the decisions they make. Some of the macro changes that effect its operations include the changes in government policy, demographic changes, trade barriers, new laws and tax changes.
One key macro-environment factor affecting its operations is the political factor. Additionally, there are myriad of political decisions that impact the operations of Harley Davidson in vital business areas such as health and education of the workforce as well as quality of economic infrastructure like roads.
The economic factors include exchange and inflation rates, economic growth, taxation changes and interest rates. These economic factors impact the behavior of the firm in such areas as deterring investments since it makes the cost of borrowing to increase and exporting of its products becomes difficult due to a strong currency which raises the price of commodities.
In addition, due to the current inflation problem, Harley Davidson faces the problem of raised operational costs and demands from employees who need higher wages.
Socially, one of the factors impacting Harley Davidson’s operations includes massive changes in social trends. This has been found to impact the willingness and availability of its employees to work as well as the demand for its products. The impact of social factors is witnessed among the aging population who are part of its staff and require pension payments.
This increases the cost of payments and hiring of new staff. Besides, it has to deal with the impact of the aged on demand. As usual, the aged do not frequently demand motorcycles what makes the demand among this age group to be lower.
Harley Davidson is making use of new technologies to innovate new processes and products. Its motor cycles, accessories and merchandise are all created for new markets and with room for technological improvements.
Besides, it has adopted online business systems through which it markets and sells its products to online shoppers. Through technology, Harley Davidson has been able to lead in innovation, improve the quality of its products, create better two-wheel designs and reduce costs.
Major environmental factors affecting this business include climate and weather changes. An external factor such as global warming is a significant problem to this company as it impacts both transportation and travel industries. Buyers prefer cars to motorcycles and this affects the sales of motor cycles and its business opportunities due to changing demand patterns.
Certain legal factors such as consumer laws, safety legislation, and employment as well as competition laws control and regulate its operations. Of greatest importance is the employment law that covers the issue of wages for employees, working hours, dismissal procedures and redundancy.
Some of the important competitive advantages at Harley Davidson include the fact that it has employed innovative capacity, strategic flexibility, organizational learning and effective technology. Besides, it has articulate strategic intent, competencies and resources that are non-substitutable and unique.
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Ways for value creation/ ways for customer value creation
Harley Davidson value creation methods include customer engagements, encouraging blogs and debates on products, creating value through transparency, risk benefit, access and dialogue.
Evaluate H-D’s latest segmentation, targeting and positioning (STP) Strategies. What are its major Strengths and weaknesses?
Market segmentation in Harley Davidson is pursued with greater vitality to ensure that the existing market is understood even better and newer avenues to sell the products that have been identified. Lower prices for products to these economies act as part of crucial attraction factors and therefore essential marketing strategy for new products that are being introduced into the market.
Other market segmentation that could result in greater sales includes consideration of individual groups’ behaviors to determine their exact preferences especially in the emerging era of great creativity. In terms of target, its products target transport businesses and companies as well as individuals.
In terms of positioning, following the continued expansion of population in America, Harley Davidson products have not been made more available especially in major towns. However, to promote the availability of these products, the company has resulted to online sales where consumers can order for their choice of products and get them delivered.
Suggest 2-3 contingencies that H-D should contemplate (international/European/Asian markets? Younger generation customers, more focus on women customers? Parts markets? ) . What main changes to their current marketing strategy should H-D consider to minimise impact of these contingencies (just point them out and write 1-3 sentences in support)?
Harley Davidson should concentrate on younger generation customers and international markets. To cushion itself from contingencies, it should be updated periodically such as offering staff training and develop mitigation options as these are key in risk planning and business continuity.
H-D is switching its strategy to Crowd sourcing (last page). Evaluate this strategy in regards to H-D
Is switching to it a threat or an opportunity? Why?
Harley Davidson creative marketing initiatives based on crowd sourcing is a move aimed at engaging the broader community and its customers with its brand and the company. Besides, Harley Davidson intends to adopt crowd sourcing for community collaboration and consumer innovation.
Crowd sourcing is indeed an opportunity for Harley Davidson to increase its marketing initiatives. It will also use it as a production and problem solving model through which it reaches customers and communities and submits solutions to both its customers and employees.
Pros and cons? Would it work for H-D or not? Why?
Crowd sourcing can effectively work for Harley Davidson as it provides a forum where issues affecting workers and customers are explored quickly and at a cost that is comparatively effective. Besides, through crowd sourcing, Harley Davidson has the ability to tap from a wide range of opportunities and talents in the organization.
Additional crowd sourcing provides Harley Davidson with an opportunity to gain first hand information from customers on products and preferences. Lastly, this model creates a crowd sourcing organization that encourages contribution and collaboration key for business growth.
Analyze the major 5 principal factors behind switching to this new strategy?
One major factor why Harley Davidson made a move to crowd souring was to develop a consumer engagement project where a ‘community is involved to ensure that effective contributions or collaborations on products and services are made to enhance the performance of a business. Besides, crowd sourcing model was going to introduce the community to its product designs, innovations and new features.
These were to act as incentives for motivating the willingness of buyers to shop for its products. In addition, it was a step to allow the broader community and customers to feel as a part of the company and to be engaged in its business activities. In addition, the focus of adopting crowd sourcing was to ensure that consumers and the community are satisfied ,with products and services offered.
Advise to H-D of at least 2 major marketing strategies that they should consider strengthening their position. Applying RACES (Resources, acceptability, consistency, effectiveness, sustainability) criteria, which of these strategies would you advise the publication to adopt and why?
Sustainability- Crowd sourcing is strategies that will link Harley Davidson with its customers and the community and as such offer it a unique competitive advantage.
Effectiveness- Crowd sourcing is an effective means of presenting to a community or customers the initiatives of a business as.well as products and services. Crowd.sourcing will strengthen the position of Harley Davidson in the market.
H-D is a company with strong marketing. What changes into H-D marketing department could be made in order to support new Crowd sourcing strategy and help H-D to strengthen its position in the market?
Some of the important strategies that can be put in place include developing leadership capabilities to handle marketing teams and improving marketing skills. Building leadership capability is important in coordinating marketing activities while improving marketing skills is vital for overcoming dynamic challenges that are common in contemporary marketing.