Harley Davidson SWOT Analysis

 

Harley Davidson SWOT Analysis

 

Harley Davidson is a motorcycle company that specializes in two-wheelers and is primarily located in the US. The company targets men who “want to have respect” by going on bike rides (Harley Davidson, 2012). This strategy has worked well for the company especially in the US.

The company has many strengths that have ensured its competitiveness. First, it has built a strong customer base which has guaranteed loyalty. Most bikers choose Harley Davidson motorcycles since they have a reputation for being reliable on the road. When men choose to go on long bike rides with their friends, they automatically associate with the company, which has built a reputation for having the best motorcycles for this venture. The innovativeness of the bikes is such that there is prestige associated with having them. People seen cruising on them are respected and even admired which has helped create a very strong brand loyalty. Market segmentation has been key to the company in selling the idea of biking in the American environment. The bikes usually target young and middle-aged men who are looking for an adventure with their friends. This culture has grown in the US and is now identified with Harley Davidson.

Due to markets having a wide variety of products, companies have been forced to be continuously innovative to ensure that they retain a competitive edge. In the US, the culture of biking has proliferated meaning that more and more companies are positioning themselves in order to exploit this market. Harley Davidson prides itself with having high quality products that are superior to those of the competitors. Companies like Royal Enfied and Boulevard are continuously improving their products so that they can capitalize on the increased interest in biking. Harley Davidson has a history of being innovative thereby having products that keep customers interested. This strength is one that will guarantee continued patronage to the company’s products. If the motorcycles produced continue to be tread setters, then, the future outlook of the company will be brighter as this will translate into more sales.

Improvements in technology have had profound impacts on a number of forward thinking companies. Harley Davidson not only applies technology in manufacturing high quality bikes but also in marketing its products. This has seen the company take advantage of the social media in order to reach a wider range of clientele. The social media has unlimited marketing capabilities. Its major advantage is that it cuts across all age groups and cultures the world over. This mode of marketing is also far cheaper than conventional modes. Harley Davidson has high presence on social media that guarantees its visibility among both the old and the young. The company uses very well planned designs and images in order to attract attention in social media enthusiasts. Another advantage of using these media is that word spreads after an individual has been attracted to a product. The network of friendships and acquaintances ensures that any interesting developments go “viral” on the media. This is very strong positioning by the company and can only have positive results going forward.

Harley Davidson has some weaknesses that need attention if the company is to achieve and surpass its goals. For starters, the company’s products are too expensive (Taylor, 2012). It is understandable that the company produces high quality motorcycles that are costly to make. However, competitors have nearly the same quality of bikes but at more customer friendly prices. The company should strive to maintain its quality image while attempting to reduce the cost of production which will in turn lead to reduction in the price of the products in the market. Continued investment in technology is one way of guaranteeing quality while reducing costs. This is because there are newer materials and methods of production that are less expensive being continuously developed. For example, the use of carbon fibers has been found to reduce the costs associated with using plastics and metals in some parts of most products especially motor vehicles. This technology can be transferred so that it is used in making high quality motorcycles at lower costs.

Secondly, Harley Davidson only deals with exclusive products. This means that it has not diversified into different market segments. The business environment is very risky. Less financial strength among consumers occasioned by constant fluctuations in the economy means that customers are looking for different, cheaper products that might adequately address their needs in their financial states. Since Harley Davidson deals with exclusive high quality motorcycles, it does not have other avenues for spreading the risk associated with reduced consumer buying power (Taylor, 2012). Having several clusters of middle to low priced products can help the company adequately spread the risk which could be the difference between its survival and collapse in case of an economic crisis.

The third weakness is that the company has a very limited customer base. This is partly due to its limited range of products. The lack of different clusters of motorcycles means that the company targets only a certain type of clientele that can afford its expensive products. Another reason for having a limited customer base is that the company has failed in its overseas marketing endeavors. Harley Davidson motorcycles are almost exclusively sold in the US. Its overall presence in the global market is very minimal. This thus subjects the company to all the rigors affecting the US economy. Aggressive marketing needs to be done in order to expand the presence of the company in the global market.

People are becoming more conscious about their carbon footprints. This has led to most shifting from use of motor vehicles that use a lot of fuel and thus pollute more, to motorcycles using less fuel. The fact that people has lesser disposable incomes due to global economic crises means that they are seeking alternative cheaper means of transport. This means that there are numerous opportunities for motorcycle companies like Harley Davidson to expand. However, this expansion must be in line with the demands of customers. Due to necessity, most people cannot afford the cost of Harley Davidson motorcycles. Therefore, the company must diversify its products and expand its range of services so as to have a wider target base (Taylor, 2012). Failure to do this will mean that the company will shrink into a regional player dealing with exclusive, expensive products that target a small privileged part of the market. It is prudent for the company managers to realize that, not only are they competing with other American companies, but also with international players like Honda, Yamaha and Hyundai which produce cheap imports that meet a wide range of needs for a large number of people.

 

 

References

Harley Davidson, (2012). Harley Davidson shows continued improvement. Retrieved from: http://www.harley-davidson.com/en_US/Content/Pages/HD_News/Company/news.html?article=en_US/News/1483_press_release.hdnews

Taylor, A., (2012). The Hurdles at Harley-Davidson. CNN Money – Fortune. Retrieved from: http://money.cnn.com/2012/10/03/autos/harley-davidson-polaris.fortune/index.html

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