Research Report on Harley Davidson in UK

Harley Davidson in UK – Introduction

This Research Report Harley Davidson UK paper will try to look into the external assessment of Harley Davidson, which is one of the biggest motorcycle manufacturers of the world. Harley Davidson is an American company which manufactures as well as sells heavyweight (over 750 cc) motorcycles designed for cruising on highways.

Research Report Harley Davidson UK
Harley Davidson

In this paper will be carrying out the environmental appraisal analysis of the company with respect to the UK market for the company. There are various tools which can be used for the environmental appraisal analysis; giving us a sound insight regarding the marketing value as well as other external factors which are currently having or might have great influence on the position of the company. For carrying out an environmental appraisal analysis several tools can be used. However for the purpose of this particular paper we will be carrying out following 3 analyses:

Pestel Analysis: This is the analysis which deals with all the important features of the macro environment of the market. More than a few factors existing in a business’s macro economics environment can have an immense effect on the decisions which are taken in an organization. A number of endogenous as well as exogenous aspects like introduction of various laws, changes in patterns tax, barriers in trade, shifting in terms of demographic traits and changes in the policy of the government can accelerate the process of the macro changes. For analyzing all of these aspects, the Pestel model can be used. The factors which are covered by this analysis are: Political factors, Economic factors, Social factors, Technological factors, Environmental factors, management factors and Legal factors (Haberberg et al. 2008).

Research Report Harley Davidson UK

Swot Analysis: Swot is the acronym for Strengths, Weakness, Opportunity and Threat. As given by the name this method for strategic planning evaluates the mentioned factors and provides a great insight for the company which is under discussion. Since these are the main four factors which can provide a picture for the company’s viability as well as sustainability in the shorter in addition to longer run, it is a very famous tool for analyzing the macro environment as well as the internal capability for the company (Haberberg et al. 2008).

We will start with the Pestel Analysis.

Pestel analysis of harley davidson

Political factors

Although there is very little direct political influence on this company’s trade finance or business transactions, the most important issue related to politics is the import/export rates which are being faced by Harley Davidson for the products they manufacture and market. In UK the taxes are levied for imports as well as exports. Taxes for import have benefits as well as short comings with respect to the company. When the company petitioned for the restriction of entry for the Japanese motorcycle models coming into the country, it showed their intent of getting a strong foothold in the market (Harley-Davidson, 2009b). On the other hand, this may also limit the company’s intent o moving into the some other booming economies of late like India. The political pressure which the company is facing also in form of the motorcycle license costs  is important too (Teerlink, 2000).

Economic factors

One of the burning economic issues which can have a direct effect on the feasibility for the company is the ever increasing prices of fuel on a global basis. This will not only have a negative effect on Harley Davidson but also will have a negative effect on their suppliers in addition to Harley competitors of the company (Jenkinson et al. 2006). On the other hand the competitive rivalry is also ever increasing in this industry segment which adds to the pressure on the company with respect to its pricing for the reason that motorbikes are often considered as “luxury products”. Hence it is important for the company to get its pricing correct.

Economic factors can also affect the power of suppliers for the company by reducing the control which the company has on its suppliers. The recent worldwide economic crisis has also acted as one of the major economic factors for the company which has been able to reduce the demand for the company on a significant basis.

Social factors

Harley-Davidson is one of the most admired as well as recognized motorcycle manufacturers in the world today. It has been seen that the average purchaser of a Harley Davidson motorcycle is a married male in his mid-forties. But the recent economic meltdown along with the soaring price for fuel which are translating into lower purchasing power of the consumers has been acting as the social issues for this motorcycle manufacturer. This particular factor of buyer power is also a high threat to the motorcycle industry.

Environmental factors

Environmental factors are very important factors these days for the vehicle companies. Harley Davidson being one of the biggest motorcycle manufacturers of the world is also facing serious difficulty for this reason. The consumption of fuel which is non renewable source of energy as well as the stringent laws in various with respect to emission reduction issues has affected the financial market and the company alike.

Legal factors

The transportation system of UK is experiencing a number of serious problems which are acting upon the interest for Harley Davidson as well. The basic problem that has been cited as the main culprit in this article is the poor planning and investment process of the British Government in the past (Jenkinson et al. 2006).

As far as the other legal issues are concerned, over certain matters the company has less control. Some of these are the lower boundary of the age required for riding a bike in most of the countries which is in the range of 17-18 years, which in UK is 16 years, in addition to the legal prerequisite of a license for motorcycle riding can hinder the growth of the market for the company for this segment of population. Additionally, the motorcycle must be maintained; have an MOT, tax and the rider must wear a helmet. Therefore, those wishing to enter the market face the same legal requirements as Harley-Davidson and have to follow the same processes.

Swot analysis

 

Strengths:

  • Brand loyalty amongst the target customers of the company. Matt Levatich, a Company executive has opined that “…without the dedication of the riders to Harley, we wouldn’t be here today”
    Also wide variety of products of the company according to standard, performance, touring and custom adds to the strength of the company (Jenkinson et al. 2006).
  • Unique product and brand value.
  • Symbol of strength, power and machismo.

Weakness:

  • The highly priced products which may not fit the reduced buyer power of the consumers.
  • In the aftermath of global financial crisis.
  • The general idea about the company is that the motorcycle manufactured by the company is a luxurious product.
  • In which the quality and design are given more importance than the price of the product.
Opportunities:

  • The demand for Harley Davidson in the Europe is currently the highest in the world which corresponds to the single largest motorcycle market in the world.
  • The company can expand in new markets and area.
  • since interest rates are very low at this point of time which encourages the customers to take a loan and buy the product.
  • Women and younger riders are also increasingly riding bikes which will add a new dimension to the market of the company.

Threat:

  • The motorcycles noise standards of the European Union is very stringent than those of Environmental Protection Agencies in the U.S and
  • Increased environmental Pollution standards.
  •  Threat from the Japanese manufacturers.
  • Perceived as a show off of capital intensiveness.

References

  • Teerlink, R. and Ozley, L (2000) More than a motorcycle, the leadership journey at Harley-Davidson, Harvard Business School Press, P.17
  • Jenkinson, A.  and Sain, B. (2006) Harley Davidson Organisation-led Integrated Marketing, Centre for Integrated Marketing, P.12-87
  • Haberberg, A. &  Rieple, A. (2008), Strategic Management: Theory And Application, Oxford University Press, Page 130-137