Harley Davidson External Business Environment
Strategic Business Plan Outline
The Analysis of H-D's External Environment
The industry external environment compounds an array of comprehensive forces that relate to the organization. External environment analysis of an industry facilitates an understanding of an organization position comparative to other organizations in the same industry (Worthington & Britton, 2006). An awareness of the external forces working across the industry players plays a handy role in organizations strategic planning. It also facilitates an organization's awareness on their relative opportunities and threats allowing them to plan considering their capabilities focusing on the available resources (Worthington & Britton, 2006).
The understanding of the external environment works to improve an organization's competitive advantage and potential sustainable growth with the industry dynamics at play (Peng, Wang, & Jiang, 2008). The external environmental forces can influence management decisions in running an organization. The results of such influence produce ripple effects on the culture, business performance, leadership style and general organization's response to circumstances in the market (Worthington & Britton, 2006).
Major Driving Forces for Change in External Environment of the Motorcycle Industry
Industry external environment forces are formally defined to describe the important factors that prompt reorientation of an organization's operations towards objective attainment (Peng et al., 2008). The U.S. motorcycle industry has seen major transformations over the years in its evolutionary growth. Among the external environmental factors that impact significantly on the motorcycle industry includes political trends, sociocultural changes and the economic dynamics at play. A discussion on these forces follows.
Political trends
The motorcycle industry faces a likely change effecting force with there being a likely hood of lower trade tariff that allow and encourage competitors for the European and Asian industries to venture in the U.S. market. The global motorcycle industry has grown to incorporate countries with advanced technology and cheaper automobile production means. The observed growth combining with lowering of trade tariffs will threaten existing motorcycle firm's continued existence in the U.S. market (Peng et al., 2008).
Sociocultural Trends
Over the years, people's lifestyle has been changing with the increasing exposure to global trends. The diversity in people's lifestyle creates potential for alteration of consumer preferences for the brands and products produced in the U.S. motorcycle industry. Loyalty to the industry's products is slowly declining with only a few diehard customers keeping their preferences constant. The lifestyle change has seen consumers shifting their preferences to new automobiles, technologically and environmentally-friendly choices (Peng et al., 2008).
Economic trends
Changes and advancements in productions technology are forcing major players in the motorcycle industry to consider shifting their production locations. These changes work hand in hand with preference for fair priced products by consumers and thus lower production costs for the firms in the industry. The awareness that cheaper and highly advanced production technology is available in other regions - such in East Asian countries - is prompting the relocation of production sites. The U.S. motorcycle industry is facing an increasing volume of firms relocating to regions where they will pay lower production costs. These companies will in-turn sell their final products to the U.S. market making their products more competitive price wise (Peng et al., 2008).
Dynamics of competition using Porter's Five Forces Model of Competition
Porter's five forces model avail a framework for use in analyzing the influence external and internal forces has on the industry's competitiveness and profitability. The model gives a better understanding to organization managers of the industry context and the firm's position and potential in the industry. The forces discussed in Porter's model are; rivalry among existing firms; potential entrants; substitute products; suppliers bargaining power and buyers bargaining power (Michael E. Porter, 2008). These five forces Porter gives assess the forces of competition influencing potential profitability win the industry. Either of these forces has capability to reduce profitability or increase earnings in the industry (Michael E. Porter, 2008).
Rivalry among Existing Firms
Over the last few decades, the motorcycle industry has had a few major players with Harley Davidson being the dominant player with a market share exceeding 55%. In the recent years, this share in the market has been slowly declining to below 50%. The decline is attributed changes competitors have taken to increase their product line and seemingly producing motorcycles similar to Harley Davidson motorcycles. The unique design that identifies a Harley Davidson motorcycle is reflected in Japanese motorcycle making their products equally competitive in the U.S. market. Additional to design similarity, motorcycle...
Harley Davidson Harley-Davidson, Inc. is mostly in business of recreational vehicle (rv) Harley-Davidson was integrated in 1981 and is based in Milwaukee, Wisconsin. It is the parent business for the team of businesses working as Harley-Davidson Motor Company (Motor Company), Buell Motorcycle Company (BMC) and Harley-Davidson Financial Services (HDFS). The Motor Company produces heavyweight bikes and provides a line of motorbike parts, devices, garments and basic product. The Motor Company produces 5
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