Porter’s Five Forces Analysis done on Harley Davidson Essay

Harley Davidson re main(prenominal)s as a dominant force in the heavy weight pedal manufacture upholding 50% sh be in the heavy weight motorcycles. This year they lionise their 110th Anniversary proudly as the only study(ip) motorcycle manufacturer to completely focus on motorcycles. (Melief, Bundgaard & Hathaway, 2006) Other major players in the Motorcycle Industry are, Honda, Yamaha, Suzuki that also hold in their a nonher(prenominal) major product lines inclusive of cars, watercraft, musical equipment and etc.Assessment of Strengths and Weaknesses of Current and voltage Competitors Porters Five Forces Analysis Source Vector (2012) Internal Rivalry The behemoth motorcycle market is justly concentrated with four major companies manufacturing these vehicles. Harley Davidson creation i of the most experienced within the industry, Honda, Suzuki and Yamaha are the competitors that are in all(a) from Japan. Over the past few years many market for hulk motorcycles has incre ased annually, unless experts are predicting even though the market is increase it provide slow down in the years to come.(Melief, Bundgaard & Hathaway, 2006) The combative challenge is high in motorcycle industry. Most of the time motor wheels are counted as a luxury product and pricing the products can be complex. (Oxbridge Writers, 2012) Harley Davidson offers spare parts, extended warranties, and innovative and environmental friendly motorbikes for their customers, this singularizes them from their competitors. Japans companies have marked their success by establishing a strong hawkish place in the market using cheap prices as their strategy.This proceeds customers cognizance on Harley Davidsons place in the market and their prices. However, those having a prevalent place in this sport do have conflicting interests, i. e. Yamaha and Honda have diversified into musical instrument and other motor vehicles. . (Oxbridge Writers, 2012) This progenys Harley-Davidson in di sparateiating themselves as a hard-core, specialized bicycle Company and getting much than customers. Harley Davidson has traditionally been the prevailing competitor in this market with taking over 50% of the market share.With time it has fallen to below 50 % due to other companies expanding their hulk motorcycle performance and growing in the market, focusing on American Consumers. (Melief, Bundgaard & Hathaway, 2006) This is because other products from competitors are becoming less howling(a) and is similar to Harley Davidson Products. Recalling, back to the past it was easier to acknowledge Harley Davidson motorbikes for their unique style, but shortly Japanese Manufacturers are merging popular designs to their products.As a result motorbikes from manufacturers are becoming more similar over time. This forces Harley-Davidson to focus more on their branding to maintain the customers. This can be an advantage to them, since Harley is cognise internationally for their b rand, many people would prefer a Harley over a Honda or Suzuki. But can also be a crepuscule since Japanese companies has been improving their products with time. Threat of New Entrants This industry has a real high entry barrier, as it requires high capital to enter to the market.standardized to most manufacturing industries in that location are significant economies involved in mental synthesis motorbikes. (NCCU, 2012) The manufacturing price of a similar product is extremely high in this industry even for a small scale. This is primaryally one of the main reasons thither are only four major players in the industry. in that location are some small-scale motorcycle creators whose business s richly focused on reputation and appeal to motorcycle devotees, to build utterly customized bikes. They do not produce enough motorbikes to threaten the major players in the industry.They do not affect the position of Harley Davidson in the market but can be an added advantage since it i ncreases interest of motorbikes in the public. Threat of Substitutes and Complements monster motorcycles are a luxury item for the majority of consumers, so there are very less similar substitutes for heavyweight motorbikes that could seriously affect the market and consumers. (Melief, Bundgaard & Hathaway, 2006) The Japanese manufacturers focus their designs more on smaller, speedy motorbikes that is the closest substitute followed by cars and scooters.Heavyweight bikes portray a true persona, which is a part of the buyers influences on choosing a motorbike. smaller bikes are for different riding styles and purposes. They are designed for a different seating position unlike the heavyweight motorbikes. Passenger cars can be a substitute for heavyweight motorbikes but it is a weak substitute. (NCCU, 2012) Motorbike consumers rarely purchase Harleys to fulfill transportation wants. Harley Davidson bikes are more of a luxury item than a necessity to travel. Motorbikes maybe eas y to travel in heavy traffic and consume less flatulency compared to a car.If a consumer choses a motorbike for the above mentioned reasons, it would be more reasonable to buy a lighter motorbike, which would be easier to handle and enkindle efficient than a heavyweight motorcycle. The most profound complement for a heavyweight motorbike is gasoline/petrol. If fuel prices were higher consumers would not matter purchasing a heavyweight bike, because most journeys taken by the bike on such a bike is highly discretionary and will be used for pleasure rather than for transport necessities.Nevertheless, most of the heavyweight bike consumers are willing to pay between $8000 and $30,000 for this luxury vehicle, they would not mind paying just a superficial extra for fuel. negotiate superpower of Suppliers According to Melief, Bundgaard & Hathaway (2006), Harley Davidson operates nearly every stage of the production of a motorcycle, taking raw materials such as steel and basic ele ctrical components and shipping completed motorcycles to its extensive independent dealership network.Because there are many suppliers of all inputs that Harley Davidson requires for its manufacturing operations there is very little that any single supplier can do the exact rents from Harley. This formulate proves that even if one supplier tries to escalate its breads/prices it would not be much of a deal for Harley to switch suppliers without interruption in production. like suppliers approach reduced the number of suppliers Harley Davidson worked with and improved the quality of the suppliers as tumesce these long-term contracts and relationship protected Harley Davidson from supplier price increase.(NCCU, 2012) This also grew self-assurance between the suppliers and Harley and their suppliers gained more profit as Harley improved their business. Bargaining Power of Consumers Similar to the Suppliers, Harley Davidsons customers are of large population of respective(prenomin al) consumers, qualification it difficult to badly affect Harley Davidsons financial situation by refusing to corporate. (Melief, Bundgaard & Hathaway 2006) Even though Harleys dealerships are individually own and operated the companies customers are officially their licensed dealers.But the sheer number of dealers that Harley has all over the world makes situation for dealers not much better than individual riders. Harley needs their customers to buy the product in order to gain profit since Harley is aging they also need to gain more new loyal riders. Each Harley Davidson purchase is by an individual even though one person would not drastically affect the financial earnings of the fraternity it is essential to sell the individual experience to each customer to take more Markets and combine these sales to improve financial strength. (NCCU, 2012)