Harley Davidson is arguably the most recognizable and iconic motorcycle brand in record. The label has only one thorough track-record of quality and remaining true to its core culture. Is Harley Davidson capable of pivoting, despite its virtually 120 -year age, into the electric period? Can Harley HOG culture show it still stood the test of time? Let’s explore the strengths, imperfections, opportunities and threats.
1. The Harley Davidson brand contacts beyond selling time motorcycles and manages to appeal to a broader market beyond only motorcycle lovers. When one beliefs of a motorcycle, one makes of a Harley Davidson- the firebrand has diversified itself into a sect. In addition to bikes, Harley Davidson sells commodities related to motorcycling tailor-make to those who appreciate the culture and its unique brand of “freedom, ” yet are not in the market for a motorcycle.
Just over 20% of Harley Davidson income comes from a combination of “parts and accessories” and “general merchandise.”( DMR)
2. The corporation has a long-standing reputation of happiness afforded its success and steadfast following. Harley Davidson is an internationally known brand. In is in accordance with 100 two countries, the symbol explanation has become synonymous with aspect. Whether a fledgling or experienced motorcyclist, there is a sense of confidence in acquiring Harley Davidson, even among the most elite.
Harley Davidson products are retailed in 100 different countries.( DMR)
3. It has autobiography, permission and ordeal in both motorcycles and personas associated with the company. Harley Davidson was founded in 1903- the same year Henry Ford founded his companionship. With virtually 120 years of know-how, Harley Davidson has stimulated a honour of experience and excellence in its workmanship. Harley Davidson stands authoritatively as “the worlds largest” iconic and noticeable American motorcycle company and is a cross-file Fortune 500 Company.
Harley Davidson is the# 1 motorcycle producer in the USA, with 30.6% of the U.S. market share in 2020.( Statista)
4. Harley Davidson has cultivated an elaborated culture for itself and a broader sect following because of it. Harley Davidson hosts HOG Rallying( Harley Owners Group) around the United Government with its 1,000, 000 the member states and 1,400 chapters worldwide( Harley Davidson ). This helps elicit a feeling of connection and a attachment to the product.
HOG Rallies are a massive beginning of money generation for the label, favorable to the company’s shareholders. HOG creates 167% of the 3-year norm free cash flow for Harley Davidson.( Harley Davidson)
5. The fellowship has fairly cash flow to use to generate additional revenue through services in financing. Harley Davidson owns a cash flow to offer services in financing to those who might not be able to afford a motorcycle outright. Assistances in finance support the company with an additional stream of revenue. With the cashflow Harley Davidson has, venturing into alternative roadway of revenue or expanding the product is also feasible.
Between January and June of 2020, the company engendered about $2.16 billion in income, $394 million of which came from its financial services.( Statista)
6. The business modeling is adaptive, with confirmed successful strategic plans in the past. The corporation has rewritten 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 also brought in a brand-new CEO in February 2020 to improve profitability.
The business model revamp saved an anticipated $250 million, with its global marketer web 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 sells left prone by tech whales like Tesla. The busines has the Livewire electric motorcycle, which came out in 2014 and retails for really under $30,000. Its first and only e-bike, Serial 1, is built for an easy and instinctive riding experience.
The world electrical bicycle grocery 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 contemporaries, attempting to solve the age issue of its clients. The brand is effectively exploiting social media to try to lure younger demographics. Harley’s average buyer is over 50 year olds and generally goes their Harley’s because they are “cool.” Younger parties look to motorcycles for easy transportation and would likely prefer a cheaper and lighter motorcycle.( New York Post)
Harley Davidson has over 13 million love on Facebook( Unmetric ).
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 acquisition 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 unveiled its first electric motorcycle- the LiveWire- in 2019, it did not accomplish as expected. The retail price of $29,799 could fetch somebody a brand-new electric car rather than an electric motorcycle. The length and heavines of the motorcycle did not resonate with the younger market, who search practicality in transportation rather than spectacle.
In 1999, the average Harley rider was 43.4 year olds; in 2004, the senility was up to 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 overestimated and retarded. A minor competitor to Harley Davidson, Zero Motorcycles, based in California, retails electric 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 specify Harley Davidson.
The Californian company offers bikes at prices between $8500 and $21,000- roughly $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 relevant 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 contemporaries.( Bloomberg)
5. A shortcoming of diversification of makes leaves purchasers with limited buying alternatives, all same to each other. The only prototypes inserted 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 introduced in 2019. Despite the attempt to branch out of the width and force of a Harley Davidson in the traditional impression, both bikes remain instead ponderous and bulky.
The company’s major Cruiser line( which includes the LiveWire) webbed precisely under $17 million in receipt, while its Sportster line plucked in $8.6 million.( Harley Davidson)
6. Reliance on the American market and reserve of resources leaves the company potentially susceptible. Harley Davidson is a tried-and-true American company. Limiting itself to, and relying 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 event of international excises, sure-fire textiles may become difficult to procure, representing an increase of the costs of production.
The company’s CEO, Jochen Zeitz, plans to invest in growth in 50 sells in The americas, Europe, and the Asia Pacific- eliminating an estimated 700 plights but saving the company an estimated ongoing $100 million per annum.( Reuters)
7. Harley Davidson’s ply chain is restrict: shortcoming of supply diversity leaves the company easily at risk of distorted yield, driving costs up or potentially halting product perfectly. The corporation routinely relies on one root to produce raw material or a rendered segment required for production for the entire company. This leaves Harley Davidson at a drastic impediment since a lack of diversity in give can be easily interrupted or distorted. If the company’s single supplier for a established place experiences topics, the yield in its entirety is disrupted.
Harley Davidson has not seen any corporation emergence in the last 14 fourths.( Reuters)
8. Harley Davidson is at a competitive hardship as it faces rivalry once more diversified. Harley Davidson faces race already reaching into other segments of the market: Powersports and the automotive industry. Rival firms via diversity have more of a broader understanding, more event in other battlefields, 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 Adversaries)
9. Harley Davidson outsources operating and administrative services, developing in probability with pricing, timely delivery, and tone. Outsourcing and third-party material supply can act as a potential cancer in the quantity order. 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 remunerates 24 -2 5% in taxes.( Harley Davidson)
1. Building on the lesson learned in expansionism of make can prove very beneficial for the company granted its authority in the following areas of motorcycles in comparison to its competitor. With the lesson learned in growing into the electrical sell, Harley Davidson were applicable itself to continue expanding its limited simulate selection and appeal to a broader type of motorcyclist.
In 2021, Harley Davidson is planning to unveil 2 new electrical bike frameworks and 4 new framework motorcycles to its lineup.( TMW)
2. International expansion can allow the company to out-maneuver international excises, increasing product outside the United Mood and shunning import tariffs in international markets. Investing money into its international yield bushes- and structure more- will provide a opening in avoiding paying international tariffs, if they are imposed on motorcycle importation. Though Harley Davidson has remarked that it wishes to keep production primarily American, it previously has assembly bushes in Thailand, India, Australia and Brazil.
European Union excises on motorcycles expense Harley Davidson an average of $2200 extra per imported bicycle to the European market.( BBC)
3. Expansionism of demographics, petitioning to a broader audience, and diversifying the target client can help bring auctions in the same way expansion of product can. Harley understands the appeal of younger sells to the industry of e-motorcycles. With the change of produce wander comes the adaptation of demographic entreaty- as is showed in California through its challenger. Electric motorcycles sell so long as they are easy and efficient enough for the young motorist to operate.
Harley Davidson began to introduce smaller 500 cc and 750 cc bikes in order to appeal to younger customers in 2020, starting at $7000.( US News)
4. Auctions and requisition in foreign marketplaces are ramping up for Harley Davidson with no foreseeable international competition. Despite a precarious 2020 in domestic American marketings, there is an increased international demand for American motorcycles. Germany, Japan, France, Canada, Australia, and Brazil are massive teeming groceries for the company, left ripe for the taking by Harley Davidson alone.
In 2020, the United Government represented only 58.6% of Harley Davidson’s world-wide sales.
5. The desire to appeal to demographics outside of the dominant client type- humanities in their 50 s- has led to the company to tap into the growing market of female riders. The sell of equestrians in America has traditionally been susceptible to gender: Harley Davidson’s average patron is a man in his 50 s. In recent years, more and more women are taking to journeying, ensuing in a stretching, diverse, and more healthy sell that can be is used by Harley Davidson.
In 2018, 19% of equestrians in America were women. Of these women, 34% seem to favor a cruiser form HOG, while another 33% favor scooters, which max out around 850 cc.( Biker Lawyer)
6. The firm could sell its bikes directly to the public- like Tesla- to decrease the price of its makes and shorten retailer probability. The companionship retails via independent middleman dealerships, relying heavily on their own auctions rather than marketings from Harley Davidson itself. By ceasing wholesale dealership reliance, the company could open its own dealerships and sell instantly to the public- a more economical and self-sufficient means of retail- as opposed to relying on independent retailers with factors of outside of the company’s control.
Harley Davidson’s expense before income taxes was approximately $118 million.( Harley Davidson)
1. Within the vein of assaults at manipulating the international market as a whole, Harley Davidson has to fight its way through smaller-scale local motorcycle manufacturers already in operation in these foreign groceries. Some of the largest business “in todays world” are India, Japan, and China. Taking India as two examples, Indian-owned Royal Enfield proves itself as a ability challenger previously reigning the Indian marketplace of 1.3 billion people- four times the size of the United Regime. The initially British fellowship has a history and track record comparable to that of Harley Davidson.
Though the reputation Harley Davidson carries load in India and experiences its fair share of Indian customers, but its price point is simply too high for 95% of Indian buyers.( CNBC)
2. Where Harley Davidson flunks, other corporations and entrants are beginning to imitate Harley prototypes and exploit market vacua left by the company. Japanese automotive companies such as Suzuki, Yamaha, and Honda are beginning to offer bikes dangerously close to the style and consolation traditionally offered by Harley Davidson. With yield in Japan, it is easy for these companies to offer their motorcycles to the prolific Japanese market ahead of Harley Davidson.
Entry-level bikes from Suzuki ($ 5749 ), Yamaha ($ 4349 ), and Honda ($ 6199, or a lower cc representation for as low-pitched as $4499) are cheaper and more lightweight than the big American cruiser.( Cruiser)
3. Increasing demand for electric motorcycles can be threatening if Harley Davidson does not rise to meet the occasion. The last-place hour Harley Davidson failed to meet demand, it resulted in the market being saturated with rivalry- and mimicry. If Harley Davidson cannot meet the demand for electric motorcycles, it will likely lose it to competitors.
As of 2020, there were at least 19 electric motorcycles- including Harley’s LiveWire- on the market offered by a broad range of merchants.( Cycle World)
4. Converts in international trade policy, such as tariffs, could have an adverse effect on the company’s bottom line. With international stretch comes difficulties. External influences outside of the company’s control, such as domestic or international politics, can influence the price of international motorcycle craft via excises, exportation rewards for products, and importation fees for foreign materials.
The United Government excise on the importation of Chinese substances into the country overhead Harley Davidson nearly $15 million.( Harley Davidson)
The timelessness of Harley Davidson is beginning to show its senility. Though it has almost 120 years of knowledge in motorcycle coping, the dated modus operandum can be detrimental as the world moves beyond resounding, heavy, bulky Swine. Can Harley Davidson save itself?
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