Hayley Davidson Industry

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Industry Analysis

By Irine Mumladze
Yelena Alafyeva
O’Neil Shane
Leonard Simon
TaiquanYoung
Date: 06/13/2012

Introduction
Our group chose to do Industry Analysis on Motorcycles industry. We chose a leader on the market which is Harley Davidson and their competitor which is Suzuki Motorcycle Company. We are analyzed both companies of how they are doing business and what are the strong sides and weak sides of both companies. By identifying companies weakness we implemented Porte’s Industry Analysis and SWOT for each company to resolve some of the issues companies have and help them to improve on market.

Overview

Harley Davidson is one of the leading manufacturers in the world in the motorcycle industry. Harley Davidson controls almost fifty percent of motorcycle sales in North America (Motorcycles.com). Overseas, Harley was unable to do the same in a few markets, but still the company was able to be a market leader in Japan, pushing Honda to second place. Harley has three segments in heavyweight motorcycles: cruiser, touring and performance. The company has been very active creating new models, but always kept its old style and technology. Harley is highly market focused, unlike its Japanese competitors such as Honda, Suzuki, Kawasaki and Yamaha. The company offers a wide range of customization options, while trying to differentiate from its competitors (Harley-Davidson.com). Current economic conditions have affected every industry including Harley. The company has faced some challenges, but it has still been doing well in this economic environment. As the new economic conditions have changed, Harley implemented new marketing strategies in order to gain a competitive advantage over its competitors. Harley implemented non-traditional marketing research to understand customer’s needs and desires. Harley’s brand is a strong company asset, and always was well known for its Harley Experience. Porter’s Industry analysis

One tool I used to analyze the corporation and the motorcycle industry is Porters Analysis. Porter’s five forces analysis is a framework for industry analysis and business strategy, and helps the companies identify the balance of power in a business situation. The areas being measured are rivalry among existing firms, the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, and the threat of substitute products. The forces measured will either be high or low. (Please refer to Diagram) The rivalry among existing firms is high. The market for the motorcycle industry has few competitors including Yamaha, Suzuki, Honda and Kawasaki. While each competitor has their own market niche, new product introductions and innovation of new motorcycle technology, there is still high rivalry between firms. Each competitor offers different type of products and targeting different consumer segments. There is a high level of differentiation between different brands. Because of higher prices on gas, and ability to get away from traffic, the motorcycle industry continues to grow. The threats of new entrants are low, which is beneficial for the company. Like the automobile industry, the motorcycle industry requires large manufacturing facilities and equipments to enter. New entrants have to have large capital to enter. Therefore, barriers to entry are high, and this segment needs big capital investment, and the industry is in a maturity segment. The high level of brand loyalty and the reputation of the established brands make it difficult for new entrants to enter on the market. With the lack of recognition and brand loyalty, it is hard to establish a new brand and new retailers would be afraid to enter the market.

Threat of substitutes is low, because motorcycles are seen as leisure products and some substitute products could be cars, motor scooters, bikes and dirt bikes; but they do not provide much competition. Threat of substitutes from cars will be low, because fuel...
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