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Harley Davidson Case

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Porter’s Five-Force Analysis: 1. Threat of new entrants: (Low) * Requires high capital investment to enter the business of the scale economies in production, research, marketing and service of this industry is high. * Brand identification of Harley Davidson has been strongly established for years. New entrant will have to overcome customer loyalty of Harley. 2. Bargaining power of suppliers: (Moderate/High) * Harley’s suppliers are not fragmented so they have a high bargaining power. * Switching cost of changing suppliers is high because of the nature of Harley’s products- -could require investing heavily to be a supplier. 3. Bargaining power of buyers: (low) * Since product is differentiated, customer tends not to be price sensitive. * Product is differentiated or targeted for niche market therefore the buyer will not find the alternative product. 4. Threat of Substitutes: (High) * Customers’ taste is shifted into Japanese motorbikes. Ex. Suzuki * Frequent product introductions and continuous improvements in price. 5. Rivalry: (high) * Lack of products differentiation or narrow product line. * Rivals like Honda are diverse in strategies, origins and personalities.
SWOT Analysis 1. Strengths: Domestic and International market share, financial status (The company’s revenues had grown at a compounded annual rate of 16.6 per- cent since 1994 to reach $4.6 billion in 2003—marking the 18th consecutive year of record revenues and earnings), and product quality, strong brand quality, strong distribution network. 2. Weaknesses: Difficulty gaining market share in some European countries, Harley Davidson motorcycles are more expensive than their competition. 3. Opportunities: Alliances with other automobile manufacturers are possible, increasing demand in US markets for bikes; Women (Japan have more…...

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