Threat from Substitute Products Rivalry among the existing players. Porter Five Forces is a holistic strategy framework that took strategic decision away from just analyzing the present competition.
A Five Forces Analysis of Harley-Davidson indicates that competition is a major force based on external factors in the motorcycle industry environment.
The company has maintained a conservative stance toward global expansion.
However, strategic reform is needed to ensure that Harley-Davidson overcomes these external factors while the business internationally expands.
A Five Forces Analysis of Harley-Davidson reveals competitive rivalry and the bargaining power of customers as the most significant external forces that affect the motorcycle industry environment.
The company is relatively stable compared to other firms. The following are the intensities or strengths of the Five Forces affecting Harley-Davidson: Competitive rivalry or competition strong force Bargaining power of buyers or customers strong force Bargaining power of suppliers weak force Threat of substitutes or substitution moderate force Threat of new entrants or new entry moderate force Recommendations.
Based on this Five Forces Analysis, Harley-Davidson needs to focus on counteracting the effects of the strong force of competition and the strong bargaining power of customers. For example, Harley-Davidson can increase product development efforts, along with investment in technological innovation.
The external factors in the motorcycle industry environment also point to the limited but significant effects of the threat of substitution and the threat of new entrants.
Harley-Davidson can address these concerns through strategic alliances, market penetration, and global expansion. High number of firms strong force High availability of substitutes strong force Moderate variety of firms moderate force Harley-Davidson competes with a considerably large number of firms, including small ones in local markets.
Also, the company faces effective substitutes, such as private cars and public transportation. The moderate variety of firms leads to considerable competition, as customers value product features and uniqueness.
Based on the external factors in this part of the Five Forces Analysis, Harley-Davidson must maintain competitiveness, especially in terms of product quality, to protect its business from other firms. This part of the Five Forces Analysis outlines the external factors that enable consumers or buyers in influencing the motorcycle industry environment.
High substitute availability strong force High quality of information strong force Moderate switching costs moderate force Easy access to substitutes imposes a strong force against Harley-Davidson. In relation, the external factor of moderate switching costs enable customers to move away from Harley-Davidson and use substitutes and other products instead.
Also, companies in the motorcycle industry and the automotive industry now provide high quality information to customers to empower them in making better purchase decisions. This part of the Five Forces Analysis tackles how suppliers influence the motorcycle industry environment.
Assessment of Strengths and Weaknesses of Current and Potential Competitors Porters Five Forces Analysis Source: Vector () Internal Rivalry The heavyweight motorcycle market is justly concentrated with four major companies manufacturing these vehicles.
Harley-Davidson Porter's 5 Forces.
Porter's 5 Forces Threat of New Entrants: Low Like any automobiles, Harley-Davidson's industry requires large manufacturing facilities and equipments to enter. New Entrants would have to have a large amount of capital is start in this industry.5/5(1).
, the Harley-Davidson Motor Company was incorporated. WWI & WWII spurred growth for the company due to the militaries demand for HD’s economical motorcycles.
After WWII, the improved American economy, and higher demands for Harley-Davidson bikes encouraged the company to expand its efforts and purchase additional manufacturing capacity.5/5(1).
Quick Overview of Porter’s Five Forces Analysis for Harley Davidson As compared to the all other firms in this industry, the company is somewhat stable, as already mentioned above. Following is the quick overview of porter’s five forces of Harley Davidson.