Harley Davidson SWOT Analysis (2021): 27 Strengths and Weaknesses

Posted On May 3, 2021 By admin With Comments Off

Harley Davidson is arguably the most recognizable and iconic motorcycle label in autobiography. The label has only one thorough track-record of quality and remaining genuine to its core culture. Is Harley Davidson capable of pivoting, despite its almost 120 -year age, into the electric age? Can Harley HOG culture show it still stood the test of age? Let’s explore the concentrations, inadequacies, opportunities and threats.

Concentration

1. The Harley Davidson brand contacts beyond selling precisely motorcycles and manages to appeal to a broader busines beyond only motorcycle addicts. When one reckons of a motorcycle, one recalls of a Harley Davidson- the symbol has diversified itself into a sect. In addition to providing bikes, Harley Davidson sells products related to motorcycling tailored to those who appreciate the culture and its unique brand of “freedom, ” more are not in the market for a motorcycle.

Just over 20% of Harley Davidson income comes from a mix of “parts and accessories” and “general merchandise.”( DMR)

2. The companionship has a long-standing reputation of gratification devoted its success and loyal following. Harley Davidson is an internationally known brand. In is in accordance with 100 two countries, the label explanation has become synonymous with aspect. Whether a rookie or knowledge motorcyclist, there is a sense of confidence in obtaining Harley Davidson, even among the most elite.

Harley Davidson products are retailed in 100 different countries.( DMR)

3. It has biography, jurisdiction and experience in both motorcycles and roles associated with the company. Harley Davidson was founded in 1903- the same year Henry Ford founded his company. With virtually 120 years of know, Harley Davidson has fostered a stature of suffer and character in its plane. Harley Davidson stands authoritatively as “the worlds largest” iconic and conspicuous American motorcycle firm and is a registered Fortune 500 Company.

Harley Davidson is the# 1 motorcycle make in the USA, with 30.6% of the U.S. market share in 2020.( Statista)

4. Harley Davidson has raised an elaborated culture for itself and a broader faith following because of it. Harley Davidson hosts HOG Rally( Harley Owners Group) in different areas of the United Nation with its 1,000, 000 the member states and 1,400 assemblies worldwide( Harley Davidson ). This helps elicit a feeling of linkage and a bond to the product.

HOG Rallies are a massive informant of money contemporary for the symbol, favorable to the company’s shareholders. HOG grows 167% of the 3-year norm free cash flow for Harley Davidson.( Harley Davidson)

5. The companionship has fairly cash flow to use to generate additional revenue through business in financing. Harley Davidson dominates a cash flow to offer services in financing to those who might not be able to afford a motorcycle outright. Works in finance cater the company with an additional stream of revenue. With the cashflow Harley Davidson has, venturing into alternative superhighway of revenue or expanding the product is also feasible.

Between January and June of 2020, the company generated about $2.16 billion in receipt, $394 million of which came from its financial services.( Statista)

6. The business pose is adaptive, with proved successful strategic plans in the past. The corporation has reworked its strategy three times in two years, with the More Roads to Harley-Davidson road map, followed by the successful Rewire, and then the Hardwire. The Hardwire strategic plan for 2021 -2 025 focused on cutting costs and maximizing efficiency. It too “ve brought” a brand-new CEO in February 2020 to improve profitability.

The business model revamp saved an anticipated $250 million, with its world-wide marketer cyberspace stock-take down 30% more compared to the third quarter of 2019.( Yahoo)

7. Harley Davidson is forward-thinking with plans to continue to move into the electric motorcycle and bicycle markets left prone by tech heavyweights like Tesla. The firm has the Livewire electrical motorcycle, which came out in 2014 and retails for simply under $30,000. Its first and only e-bike, Serial 1, is built for an easy and intuitive ride experience.

The world-wide electric bicycle marketplace was an estimated $15 billion in 2019, with an estimated exponential increase further 6% through 2025.( TechCrunch)

8. Harley Davidson’s usage of social media has allowed it to begin appealing to younger generations, attempting to solve the age issue of its purchasers. The firebrand is effectively abusing social media to try to lure younger demographics. Harley’s average buyer is over 50 years old and generally travels their Harley’s because they are “cool.” Younger beings look to motorcycles for easy transportation and would likely prefer a cheaper and lighter bicycle.( New York Post)

Harley Davidson has over 13 million love on Facebook( Unmetric ).

Weaknesses

1. The core demographic for Harley Davidson, baby boomers, are rapidly aging while younger generations are left uninterested in the same kind of HOG-style bulky motorcycle. Harley Davidson, despite a social information campaign, is struggling to appeal to the younger market. Millennials and younger demographics don’t often acquire motorcycles. If they do, it is often for a more pragmatic, practical, logistical intent rather than simply because “motorcycles are cool.”

The average Harley Davidson owner is a married man in his 50 s with an income in surplus of $90,000.( CNBC)

2. Harley Davidson’s struggles at petitioning to a younger, more environmentally diligent demographic are over-ambitious and out-of-touch. When Harley Davidson launched its first electrical motorcycle- the LiveWire- in 2019, it should not play-act as expected. The retail price of $29,799 could fetch mortal a new electric car rather than an electric motorcycle. The length and load of the motorcycle did not resonate with the younger market, who attempt practicality in transportation rather than spectacle.

In 1999, the average Harley rider was 43.4 year olds; in 2004, the senility is the responsibility of 46.1; by 2008, the average rider was 48 year olds- there is exponential age of the core demographic.( Reuters)

3. The company’s timing of its infiltration into the electrical motorcycle market was miscalculated and delayed. A minor competitor to Harley Davidson, Zero Motorcycles, based in California, retails electrical motorcycles at a much more appealing price point. While there is still room to adapt the business plan, Harley’s pricing is astronomical by comparison for simply the call Harley Davidson.

The Californian company offers bikes at premiums between $8500 and $21,000- nearly $9000 under Harley Davidson.( Reuters)

4. There has been very minimal success outside of the company’s core product and core demographic. Harley Davidson is having trouble expanding outside of what the company is at its core. With an aging core demographic and expensive advertisement and social media campaigns, Harley Davidson is having trouble sustaining relevance in the same way among Generation X and Millennials as it did with Baby Boomers.

In 2020, Harley Davidson began offering a $649 Harley for toddlers in order to help appeal to younger generations.( Bloomberg)

5. A need of diversification of concoctions leaves purchasers with limited buying alternatives, all similar to each other. The only patterns feed outside of Harley’s traditional “HOG-style” bikes were a smaller- yet still rather large and bulky- dirt bike type of model, and the electrical LiveWire, both inserted in 2019. Despite the attempt to branch out of the immensity and heavines of a Harley Davidson in the traditional appreciation, both bicycles remain preferably heavy and bulky.

The company’s major Cruiser line( which includes the LiveWire) webbed really under $17 million in income, while its Sportster line drew in $8.6 million.( Harley Davidson)

6. Reliance on the American market and kitty of resources leaves the company potentially vulnerable. Harley Davidson is a tried-and-true American company. Limiting itself to, and “il rely on”, the American market- prolific as it is- can be potentially harmful in that it keeps the focus of the company narrow-minded. In the case of international tariffs, sure-fire substances may become difficult to procure, driving up the costs of production.

The company’s CEO, Jochen Zeitz, plans to invest in growth in 50 business in The americas, Europe, and the Asia Pacific- eliminating an estimated 700 points but saving the company an estimated ongoing $100 million per annum.( Reuters)

7. Harley Davidson’s equip order is shrink: shortfall of furnish diversification leaves the company easily at risk of misrepresented make, driving costs up or potentially halting production alone. The corporation frequently relies on one informant to produce raw material or a given duty required for production for the entire company. This leaves Harley Davidson at a drastic disadvantage since a lack of diversity in ply can be easily stopped or perverted. If the company’s single supplier for a handed percentage ordeals controversies, the yield in its entirety is disrupted.

Harley Davidson can not seen any firm growing in the last 14 districts.( Reuters)

8. Harley Davidson is at a competitive impediment as it faces event once more diversified. Harley Davidson faces tournament previously contacting into other segments of the market: Powersports and the automotive industry. Rival business via diversity have more of a broader understanding, more experience in other orbits, and more competitive pricing than Harley Davidson offers.

Harley Davidson’s top opponent, the British companionship Triumph- which is approximately the same age as Harley- returns in $4.7 billion less in revenue than Harley Davidson.( What Challengers)

9. Harley Davidson outsources operating and administrative services, arising in threat with pricing, timely delivery, and tone. Outsourcing and third-party material supply can act as a possible cancer in the give chain. Lack of communication, fluctuating pricing, and inadequate delivery are all factors outside of the company’s control but can prove harmful to its operation.

The company estimates that it pays 24 -2 5% in taxes.( Harley Davidson)

Opportunities

1. Building on the lesson learned in expansionism of produce can prove very beneficial for the company afforded its jurisdiction in the following areas of motorcycles in comparison to its race. With the lesson learned in growing into the electrical busines, Harley Davidson were applicable itself to continue expanding its limited prototype pick and appeal to a broader type of motorcyclist.

In 2021, Harley Davidson programme to launch 2 new electrical motorcycle simulates and 4 brand-new example motorcycles to its lineup.( TMW)

2. International expansion can allow the company to out-maneuver international tariffs, increasing production outside the United Regime and by-passing import tariffs in international markets. Investing fund into its international creation embeds- and structure more- will be supported a loophole in avoiding paying international excises, if they are imposed on motorcycle importation. Though Harley Davidson has remarked that it wishes to keep production mainly American, it already has assembly bushes in Thailand, India, Australia and Brazil.

European Union tariffs on motorcycles cost Harley Davidson an average rate of $2200 additional per imported motorcycle to the European market.( BBC)

3. Expansionism of demographics, requesting to a broader audience, and diversifying the target client can help bring marketings in the same way expansion of produce can. Harley understands the appeal of younger sells to the industry of e-motorcycles. With the adjustment of produce wander comes the modification of demographic petition- as is demonstrated in California through its contestant. Electric motorcycles sell so long as they are easy and efficient fairly for the young motorist to operate.

Harley Davidson began to introduce smaller 500 cc and 750 cc bikes in order to appeal to younger purchasers in 2020, starting at $7000.( US News)

4. Marketings and ask in foreign markets are ramping up for Harley Davidson with no foreseeable international competition. Despite a iffy 2020 in domestic American marketings, there is an increased international demand for American motorcycles. Germany, Japan, France, Canada, Australia, and Brazil are massive teeming sells for the company, left ripe for the making by Harley Davidson alone.

In 2020, the United States represented only 58.6% of Harley Davidson’s world sales.

5. The desire to appeal to demographics outside of the dominant client type- adults in their 50 s- has led to the company to sounds into the growing market of female equestrians. The grocery of equestrians in America has traditionally been prone to gender: Harley Davidson’s average patron is a man in his 50 s. In recent years, more and more wives are taking to journeying, resulting in a ripening, diverse, and more healthy grocery that are able is used by Harley Davidson.

In 2018, 19% of equestrians in America were women. Of these women, 34% seem to favor a cruiser mode HOG, while another 33% promote scooters, which max out around 850 cc.( Biker Lawyer)

6. The firm could sell my shares bikes instantly to the public- like Tesla- to decrease the price of its concoctions and abbreviate retailer jeopardy. The corporation retails via independent middleman dealerships, relying heavily on their own auctions rather than sales from Harley Davidson itself. By ceasing wholesale dealership reliance, the company could open its own dealerships and sell directly to the public- a most economical and self-sufficient means of retail- as opposed to relying on independent retailers with external factors outside of the company’s control.

Harley Davidson’s overhead before income taxes was nearly $118 million.( Harley Davidson)

Threats

1. Within the vein of attempts at manipulating the international market as a whole, Harley Davidson has to fight its highway through smaller-scale local motorcycle creators already in operation in these foreign groceries. Some of the most crucial sells in the world today are India, Japan, and China. Taking India as two examples, Indian-owned Royal Enfield proves itself as a capable challenger once dominating the Indian marketplace of 1.3 billion people- four times the size of the United Position. The primarily British company has a history and track record comparable to that of Harley Davidson.

Though the honour Harley Davidson carries heavines in India and enjoys its fair share of Indian purchasers, but its price point is simply too high for 95% of Indian purchasers.( CNBC)

2. Where Harley Davidson neglects, other companies and competitors are beginning to imitate Harley frameworks and employ market vacuum-cleans left by the company. Japanese automotive companionships such as Suzuki, Yamaha, and Honda are beginning to offer bikes dangerously close to the style and ease traditionally offered by Harley Davidson. With product in Japan, “its easy to” for these companies to offer their bikes to the prolific Japanese busines ahead of Harley Davidson.

Entry-level bikes from Suzuki ($ 5749 ), Yamaha ($ 4349 ), and Honda ($ 6199, or a lower cc representation for as low-grade as $4499) are cheaper and more lightweight than the massive American cruiser.( Cruiser)

3. Increasing demand for electrical motorcycles is likely to be peril if Harley Davidson does not rise to meet the motive. The last duration Harley Davidson failed to meet demand, it resulted in the market being saturated with rival- and simulated. If Harley Davidson cannot meet the demand for electric motorcycles, it will likely completely lost to competitors.

As of 2020, there were at least 19 electrical motorcycles- including Harley’s LiveWire- on the market offered by a wide range of pushers.( Cycle World)

4. Conversions in international trade policy, such as excises, could have an adverse effect on the company’s bottom line. With international expansion comes questions. External points outside of the company’s control, such as domestic or international politics, can influence the price of international motorcycle transaction via excises, exportation fees for produces, and importation fees for foreign materials.

The United States excise on the importation of Chinese textiles into the country cost Harley Davidson nearly $15 million.( Harley Davidson)

The timelessness of Harley Davidson is beginning to show its age. Though it has almost 120 years of suffer in motorcycle dealing, the dated modus operandum can be detrimental as the world moves beyond roaring, ponderous, oversized Pigs. Can Harley Davidson save itself?

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