Harly Davenson is operating in a highly competitive market. The UK market has various forces that would influence the performance of the firm. The motorcycle industry has a lot of potential, as well as threats. For a clear understanding of the operations of Harly Davenson, a SWOT analysis would be of great importance.
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The strength of this firm lies in various factors. One of the major strengths of the firm is its brand name. Although this brand has not managed to make a huge impact outside the home country, it is fast gaining acceptance in this industry.
The name is expected to attract the youths, who make the majority of the market share in the industry. This firm also has considerable financial strength following years of growth in its sales. As such, this project is in a position to implement its strategies, including those of research and extension.
Despite the above strengths, the firm has some weaknesses that might see some of its competitors in the UK eat up a section of its market share. It is evident that one of the weaknesses that many environmentalists have repeatedly talked about is environmental degradation.
The rubber materials that this firm uses in making the bicycle parts and are causing havoc to the environment in the US. It is disappointing that this firm is yet to develop a solution to this problem because according to a simple market research, it is yet to replace completely the plastic and rubber with better alternatives.
The firm operates in an environment with some opportunities, which can make it experience massive growth in its market share in the UK. Harly Davenson would have exploited a vacuum that existed in the UK. It is apparent that there is no stiff competition for this firm in the UK market and this company would be able to make enough profits.
Harly Davenson would provide the market with a completely new product that is not comparable with any other in the UK market. Harly Davenson would find it easy to embraces change, which comes about because of the changing technologies. This is accelerated by its size, unlike other organizations, which would not adopt change due to their large sizes. Technological advancements would also enable the firm to conduct trade easily due to improved means of communication and transport.
The threats that this product is forced to deal with include competition and piracy. The market is very competitive, which calls for the stakeholders to come up with new strategies to counter the effects of competition. It is apparent that many firms are likely to come up with products, which are close substitutes of the products offered by this firm.
Analysis of the External Business Environment (PESTEL)
Environmental scanning can be done using PESTEL Analysis. This involves the analysis of political, economic, social, technological, and legal environments. Politically, this firm would not meet challenges in the UK. The UK, where the firm plans to relocate, is one of the leading democracies in the world. It has a very stable government that is supportive of business operations.
Economically, this firm has had difficulties. The firm has been faced with economic recession that hit various countries in the world, especially the US economy, which is its main market. This had serious negative effects on the firm’s revenues as many of the customers considered the products as non-basic.
However, there are other reasons why the firm has experienced economic boom in various markets hence increasing its revenues. Currently, the US, and many other countries making up the market of this firm including the UK, is experiencing steady economic growth, making it have a favorable economic environment.
The socio-cultural environment of this company is diversified. This is because this firm operates in the global market. There are those countries that cherish equality, and women have equal economic strength just as men. In such countries, the firm does not segment the market based on sex, but age. The UK is one such country.
The technological environment of this firm is very dynamic. Technological inventions and innovations, especially in the field of communication, have been the main challenge and strength of this firm. While this firm is left with nightmares of trying to guess what its competitors are going to come up with, it has used this technology to emerge as the leader in the market.
Legally, the firm has not faced major challenges. The laws that govern trade in the US and the UK have been very favorable to this firm. There are no occasions that this firm has faced a major litigation over an infringement of another firm’s right.
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Porters Five Forces
The strategic analysis of this firm can also be done through porter’s five forces. It has been able to implement Porters five forces. To tackle the threat of new competition, the firm has been keen on producing new products to rival those of new competitors. It has been keen to introduce new products in the market to counter any possible threat.
To manage the threat of substitute products, Harly Davenson has developed different lines of products to satisfy different markets so that it may not be adversely affected if substitute products invade one line. To increase its bargaining power with the buyers, it has continued to produce high products with qualities that make it easy for the customers to appreciate its high prices.
In so doing, the firm has been keen on ensuring that the lower end of the market is not assumed. To increase its bargaining power with suppliers, it has created a scenario where it is a single buyer with various sellers.