Tows: Motorcycle and Harley Davidson
Harley Davidson –Threats (T)
New Emission Standards One of the growing Threats to Harley Davidson’s reign of dominance in US markets has been a growing awareness of the environment. In response to this, the bar for emission standards is continuously raised. In 2010 model year or newer motorcycles emission standards for both HC + NOx were reduced from 1.4 prior to 2010 to just 0.8 after 2010 (US Government Printing Office. 2013). For at least 5 years now, there have been rumors circulating that Harley Davidson would abandon the traditional air cooled designs in favor of a new liquid cooled lineup in response to ever growing emission standards (Huze. 2011). If emission control standards continue to tighten, Harley Davidson may be forced to do exactly that.
Procurement of Raw Materials Historically, Harley Davidson has relied on limited number of suppliers for raw materials to provide the components used in its manufacturing plants. In some cases, the entire company’s business is dependent on just one supplier to deliver certain raw materials in time. The lack of versatility in this area means that rising input costs could lead to capacity issues in the long run. Additionally, increasing costs for commodities could lead to capacity constraints, ultimately leading to lower production (Harley Davidson, Inc. 2012).
Competitive Landscape Currently, Harley Davidson holds 56% of the market share for heavyweight motorcycles, defined as those motorcycles that displace more than 650cc. To some this may be an impenetrable advantage in the market, to other, a source of vulnerability (Taylor III, 2012). For years, Harley has been the undisputed king of the “bad boys”, but in recent years up and coming companies such as Polaris are trying to muscle in to the motorcycle arena. Polaris, a company known for its snow mobiles has only recently begun selling motorcycles 14 years ago (Taylor III, 2012). Polaris has shown that it understands what its
New Emission Standards One of the growing Threats to Harley Davidson’s reign of dominance in US markets has been a growing awareness of the environment. In response to this, the bar for emission standards is continuously raised. In 2010 model year or newer motorcycles emission standards for both HC + NOx were reduced from 1.4 prior to 2010 to just 0.8 after 2010 (US Government Printing Office. 2013). For at least 5 years now, there have been rumors circulating that Harley Davidson would abandon the traditional air cooled designs in favor of a new liquid cooled lineup in response to ever growing emission standards (Huze. 2011). If emission control standards continue to tighten, Harley Davidson may be forced to do exactly that.
Procurement of Raw Materials Historically, Harley Davidson has relied on limited number of suppliers for raw materials to provide the components used in its manufacturing plants. In some cases, the entire company’s business is dependent on just one supplier to deliver certain raw materials in time. The lack of versatility in this area means that rising input costs could lead to capacity issues in the long run. Additionally, increasing costs for commodities could lead to capacity constraints, ultimately leading to lower production (Harley Davidson, Inc. 2012).
Competitive Landscape Currently, Harley Davidson holds 56% of the market share for heavyweight motorcycles, defined as those motorcycles that displace more than 650cc. To some this may be an impenetrable advantage in the market, to other, a source of vulnerability (Taylor III, 2012). For years, Harley has been the undisputed king of the “bad boys”, but in recent years up and coming companies such as Polaris are trying to muscle in to the motorcycle arena. Polaris, a company known for its snow mobiles has only recently begun selling motorcycles 14 years ago (Taylor III, 2012). Polaris has shown that it understands what its
Citations: Burkey, Brent. (Oct 2009). Harley-Davidson Time for the tough decisions A plan to restructure core local Harley operations is in the hands of the company.York Daily Record. P4. Harley Davidson, Inc. (Aug 2012). Harley-Davidson, Inc. - Financial and Strategic Analysis Review. Global Data. P1-3. Harley Davidson, Inc. (Jun 2012). SWOT Analysis. Company Report. P1-9. P9. Huze, Cyril. (Jun 2011). 2012 Harley-Davidson Liquid Cooled Engines. Cyril Huze Post. Retrieved from: http://cyrilhuzeblog.com/2011/06/17/2012-harley-davidson-liquid-cooled-engines/ on September 17, 2013. Madson, Bart. (Feb. 2013). H-D R&D Product Development Center. Motorcycleusa.com. Retrieved from: http://www.motorcycle-usa.com/684/15599/Motorcycle-Article/H-D-R-D-Product-Development-Center.aspx on September 18, 2013. Miller, Paula M. (Jan-Mar 2012). Harley Davidson in China. China Business Review. P41-43. PR Newswire Rifkin, Glenn. (Oct. 1997). How Harley Davidson Revs Its Brand. Strategy + Business. Retrieved from: http://www.strategy-business.com/article/12878?gko=ffaa3 on September 17, 2013. Taylor III, Alex. (Oct. 2012). The Hurdles At Harley Davidson. Motorworld. Retrieved from: http://money.cnn.com/2012/10/03/autos/harley-davidson-polaris.fortune/index.html on September 17, 2013. UPI.com. (2013). Harley Launches Eight New Models. Business News. Retrieved from: http://www.upi.com/Business_News/2013/08/19/Harley-Davidson-launches-eight-new-models/UPI-14041376934506/#ixzz2fBLrhEjt on September 17, 2013. Weihrich, Heinz. (1980). The TOWS Matrix --- A Tool for Situational Analysis. A Study On Long Range Planning; University of San Francisco. P14