Major Threat To Harley's U.S. Market example essay topic

In the course of the past 100 years the world had undergone a great metamorphosis. Two world wars and astronomical leaps and bounds in technology have changed our lives forever. But one thing remains unchanged; Harley-Davidson is still the undisputed leader in manufacturing and selling motorcycles. Created in 1903 in the Davidson's backyard a new company rose and established itself as a force within the internal combustion transportation industry. It is not surprising that Harley has been around for 100 years, all one needs to point to is their mission statement. According to their 2001 annual report, Harley-Davidson's mission statement is as follows, "We fulfill dreams through the experiences of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles, branded products and services in selected market segments".

Through their strong mission to serve their customers, Harley Davidson has amassed numerous strengths that keep the company as a leading innovator in the motorcycle industry. One of these strengths is buyer loyalty. According to the case, "more than 92% of its motorcycle customers intend to repurchase". This is especially important because it shows that customers are satisfied when they buy a bike from Harley-Davidson. With brand loyalty recognized, Harley created H.O. G (Harley Owners Group) organization which now stands at 660,000 members worldwide and allows Harley enthusiasts to gather and share their love of Harley Davidson motorcycles together.

Some of the other major strengths are their 500+ international retail outlets, being the leading seller of domestic motorcycles for the past 17 years, as well as having their own financial organization which has financed more than 86,000 Harley's and continues to see increased income year after year. Along with any companies strengths are threats that could be problematic. Harley's major threats include new companies penetrating their market and strategic alliances. In November of 2001, Kawasaki & Suzuki formed a strategic alliance which made them just a power as Harley's #2 competitor, Honda.

Also in 1999, Polaris entered into the motorcycle market. Although small now, Polaris has major name recognition and in the future could be a major threat to Harley's United States market. Other threats right now include the decline in motorcycle riding in Europe. Stricter laws are partly to blame because there are fewer riders on the road and consequently lower sales. If the decline continues Harley may want to reconsider their position in the European market. In order for Harley to remain atop their game they must be able to adapt and seek new opportunities.

1998 marked a big occasion for Harley when they took control of majority interest in Buell which develops smaller, sportier bikes. This is a huge opportunity because it would allow Harley to tap a younger market than their other bikes attract. Also the world wide market is always expanding and Harley could try and sell their products wherever the demand exists. Although Harley has proved their longevity as a leader in their industry, I believe there are a few things that Harley might want to do in order to make their company even more successful. The current gross profit margin (which is the total margin available to cover operating expenses and yield a profit) is. 350 (1,180,005 / 3,363,414).

I believe Harley could increase their products profitability if they had more parts created and manufacturing plants outside of the United States. Further inspection of Harley's financial statements revealed that Harley is doing really well. Other than opening facilities abroad and marketing their product in new markets I believe that Harley is doing a great job as a financial entity. The only other recommendation I would have is if Polaris starts cutting into their domestic market Harley might want to form a strategic alliance with Polaris or one of Polaris' rivals and try to penetrate the ATV market.

This could help Harley-Davidson branch out and it would take less risk off their motorcycle division because the risk would be spread over more products. These are the key things I think Harley-Davidson could and should do in order to make their company better for the long run.