Strategic Analysis of Harley Davidson's Business Strategy

This report provides a comprehensive analysis of Harley Davidson's business strategy. It begins with an introduction defining business strategy and its importance, followed by an overview of Harley Davidson. The main body delves into Harley Davidson's competitive position using SWOT, VRIO, Porter's Generic strategy and market segmentation. It then examines the external environment using PESTLE and Porter's Five Forces analyses. The SWOT analysis highlights Harley Davidson's brand strength and weaknesses, such as its dependency on the US market. The VRIO framework evaluates the value, rarity, imitability, and organization of Harley Davidson's resources. The PESTLE analysis assesses political, economic, social, technological, environmental, and legal factors. The Porter's Five Forces analysis evaluates competitive rivalry, the threat of new entrants and substitutes, and the bargaining power of customers and suppliers. The report concludes with a strategic planning section, offering insights into how Harley Davidson can adapt to market changes and maintain a competitive edge.

Business Strategy

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Competitive position using different models..............................................................................3
Environmental analysis...............................................................................................................6
Strategic planning........................................................................................................................9
CONCLUSION .............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy can be defined as the actions, goals and plans which mainly outlines
how the business shall compete in market with the product or service. It takes into account
various factors such as competitors, business environment, market and many others and must
have flexibility so that it can handle the changes prevailing in the market. In order to prepare the
strategy, it takes strong skills in the business analysis and strategic planning so that competitive
edge can be taken (Remane and et. al., 2017). The organization chosen for this report is Harley
Davidson, the manufacturer of American motorcycle which was founded in the year 1903. it is
headquartered in Milwaukee, USA. This report shall cover the the evaluation of competitive
position using SWOT, VRIO and other models, environmental analysis using Porters 5 forces,
PESTLE and Boston matrix and strategic plan using various models.
MAIN BODY
Competitive position using different models.
The competitive position of the organization as a place of company, its offering on wide
understood market. It describes the market share which is relative to other companies which act
on market and also defines the threats and opportunities which may arise out it (Amit and Zott,
2020). In order to make the analysation of the competitive position of Harley Davidson, the
following models are used-
SWOT analysis
It is a framework which involves analysing the strength, opportunity, weakness and
threats of organization so that it can frame its strategy in appropriate manner by keeping these
factors in mind. For Harley Davidson, it is discussed below-
Strength
 The major strength of Harley Davidson
is its brand value which it has created
and positioned itself in the niche
market of the high CC cruiser bikers. Another strength is the high consumer
pull as the company uses promotional
branding and strategies in order to
Weakness
 The company Harley Davidson has its
manufacturing plant apart from USA
only in Brazil and India which results
in high export price. The over
dependency on the 3 plants for global
demand makes its working difficult.

create the strong customers which
results in high TOMA (Top of mind)
score.
 Another weakness is over dependency
on US market which makes risky for
the organisation to generate revenue
from USA.
Opportunities
 The demand in developing nations such
as Asian and European is increasing so
Harley Davidson can attract these
market aggressively. The company can launch low end
heavy weight vehicle for young
customers so that it can attract them in
order to increase the customer base.
Threats
 There is internal distress due to over
dependency on US market possesses
threat on Harley Davidson.
 Another threat is availability of
substitute product such as Royal
Enfield, triumph motorcycles, etc. on
low price may affect the business of
Harley Davidson (Macchi, Savino and
Roda, 2020).
Porter's Generic strategy
The position of firm in the industry determine its profitability which is below or above
the average of industry. The average profitability is driven by sustainable competitive advantage
which the firm can possess by two types of competitive advantage which is differentiation and
low. These two when combined with scope of activities leads to three generic strategies for
achieving performance in industry which are discussed below for Harley Davidson- Cost leadership- In this, the company is aimed to become low cost producer in industry
and the source of the cost advantage is varied and mainly depends upon structure of
industry. Harley Davidson may reduce the price of its products so that it can achieve the
cost leadership and become above the average performer. Differentiation- In this, the enterprise seeks to become unique in industry with some
dimensions which are valued by the customers. One or more of the attribute is selected
which the industry perceives as essential and position uniquely itself n order to meet the
market demand and need. Harley Davidson may introduce innovative offering for
customers so enter new segment by introducing cars so that it can attract more customers.

 Focus- It rest on choice of narrow competitive scope in industry wherein the company
selects the segment in industry and tailor its strategy in order to serve customers. It has
two variants of which first is cost focus wherein the company seeks the cost advantage in
target segment and second is differentiation focus which is aimed to become
differentiated in target segment (Abugr and Anlesinya, 2020).
VRIO framework
This tool is used to analyse the internal resources of the company as that the company can
take sustainable competitive advantage. This framework helps in improving the greater
competitive advantage. It mainly categorizes the resources and capabilities into four categories
and in relation to Harley Davidson, it is discussed below- Valuable- It includes those resources which are highly valuable for the organization
which helps in taking competitive advantage. The financial resources of Harley
Davidson is highly valuable as it helps it to invest in the external opportunities which
arises from environment. It also helps in combating the external threats. Rare- It involves those capabilities which are rare in nature. The patent of the Harley
Davidson is rare for it as it is not available easily to other competitors. This helps the
company to make use of it without any interference from that of the competitors. Imitable- Those resources are covered under this ambit which are not easy to imitate or
copy. The market position of Harley Davidson is very difficult to copy as it has th culture
which involves participation of the suppliers, customers and employees.
 Organized- Tit involves those resources which are organized for the company. The
organizational culture of the company is organized as it makes its organization special for
the employees, suppliers and customers. Without it, Harley Davidson cannot survive in
today's time (Gibe and Kalling, 2019).
Market segmentation
Segmentation is a process which involves segmenting or grouping the customers on the
basis of common characteristics. Different types of market segmentation includes the following- Demographic: It groups the market and customers on the basis of personal attributes like
gender, age, education, etc. Geographic: It segment the customers on the basis of geographical region like country,
town, region, etc.

 Psyhographic- It groups the customers on the basis of psychological characteristic like
personality, lifestyle, values, etc.
 Behavioural- It segment the market on the basis of how people makes use of the product,
what benefits they are looking, etc.
Harley Davidson segment the customers on the basis of psychographic characteristics in
order to cater changing needs of customers especially because it is the lifestyle brand.
Targeting is a process which involves breaking the whole market into many segments
and making strategies of marketing in accordance with it. The target market of Harley Davidson
is mainly the people who have comfortable disposable income and who wants to invest in the
premium vehicles as they identify the motorcycling as the passionate hobby.
Positioning is a procedure which involves developing and associating the mental position
in public consciousness relating to brand and its offering. The positioning of Harley Davidson is
strong enough in consumer's mind as the premium product which has advanced technology and
design which is customized
(Ashjari and et. al., 2017).
Environmental analysis
It is one of the strategic tool which involves the process for identifying the internal and
external elements that may affect the performance of the company. It mainly entails the assessing
of level of opportunities and threats which the factors may present. For Harley Davidson, it is
discussed below by using various frameworks-
PESTLE Analysis
It is a tool which is being used specifically to analyse the external factors of the
organization. In relation to Harley Davidson, it is illustrated below- Political- It is concerned with the political scenario or condition in the state. The political
climate mainly affects the market wherein the company operates. The free trade
agreement may facilitate the global expansion to company but this factor may also
threaten business of Harley Davidson by increasing influx of the cheaper offers or any
other substitute which competes against the company. Economic- It involves the economic factors such as inflation rate, employability rate, etc.
the economic stability of the major market may present several opportunities for the
company Harley Davidson in order to grow stably in core markets such as in USA

whereas the stable credit accessibility may support the competitors of Harley Davidson
which may become threat for it. Social- It is concerned with the socio-cultural changes in environment which may affect
the working of organization. There are many issues in the formulation of strategy which
may be faced by company Harley Davidson such as increasing attitude regarding leisure
may create opportunities for firm to sell its products as the leisure motorcycles but the
increased attitude of people towards green technology may become threat as most of its
offering have combustion engines with the significant emission. Technological- It involves adopting technology in operations of business so that
innovation is driven. For Harley Davidson, the company may avail the opportunity of
green technology so that its performance can be boosted as most of the chopper
motorcycles does not have the high green technology rating. But the high cos of
deploying technology may result in increasing the cost which may affect the sales and
profitability (Bhatti and et. al., 2018). Environmental- It involves the ability to respond to the ecological conditions which may
affect the working of business. The current environmental trend urges for sustainability
and Harley Davidson may address this issue by changing its operations towards high
sustainability rates by using environmental friendly features in product so that those
customers are attracted which have low carbon lifestyle. While the change in climate may
possess threat to it as the attractiveness of its product may be reduced which have
mediocre emission ratings.
 Legal- it outlines influence of regulatory and legal conditions on the firm. The company
Harley Davidson have opportunity to satisfy requirement of the emission regulations by
improving its sustainability policies but the loopholes in the international patent
legislation may threaten the company by weak protection against the imitation.
Porter's five forces
Industry analysis is mainly used to analyse the competitive forces of the organization so
that it can plan its strategies in an effective manner. The Porter's five forces is being used for
conducting the industry analysis which is narrated below in context to Harley Davidson. It is a
tool which is used to identify the power of five forces which may affect the market position of
the company. It is illustrated below for Harley Davidson-

 Competitive Rivalry- It identifies the competition in market against the company. The
power of this force for Harley Davidson is high as it competes with large number of
companies that includes small firms in the local market. Due to high competition, it has
to lower down the price and reduce its profitability. Threat of new entrant- It is concerned with the ability of new entries to enter the market.
The threat of the new entrant is moderate on Harley Davidson as the factors such as
moderate economies of scale, high cost for brand development, moderate switching cost
makes the barrier for new entrants to enter this industry and threaten the market position
of company. Threat of substitute- It involves the availability of the substitute or alternative offering in
which the organization deals. The power of this force in relation to Harley Davidson is
moderate as there are many substitute available of motorcycle such as care, public
transport which may be utilized by customers and affect the sales of the company. But
motorcycles are attractive enough which makes switching power of consumers moderate. Bargaining power of customers- It is concerned with ability of the buyers to lower down
the price. The power of this force for Harley Davidson is high as there are high
availability of the alternative products, low switching cost and high knowledge of
customers makes it easy for the consumers to switch to other substitute as there are wide
varieties available for customers in market which makes bargaining power high of
consumers.
 Bargaining power of suppliers- It is concerned with effect of suppliers on company by
driving the prices high. The power of this force for Harley Davidson is low because of
single reason which is minimum forward integration and the high stability of the supply
makes the effect of them on organization not high but moderate (Lueg, 2020Keelson,
2017).
Boston Matrix
The portfolio of the products may be analysed by using the Boston group Consulting
matrix which categorizes the product into four areas on the basis of their market growth and
share. It is aimed to make decisions relating to where to invest and how products to develop or
discontinue. In relation to Harley Davidson, its application is discussed below-

 Stars- This includes the high growth offering which is competing in market and
compared with competition. These product requires high investment in order to sustain
the growth. The standard, cruiser and touring models of Harley Davidson is a star for it as
it generates high income due to high acceptability rates. Cash cows- These are the low growth offering with the high share of market. These are
successful and mature products which takes less investment but requires continuous
management for the continued profit. The standard model of the Harley Davidson is its
cash cow which less investment but continuous monitoring. Question mark- It includes those products which have low share of market and operate in
high market growth as they have potential but requires substantial investment in order to
grow the market share. The sports bike and dual range of bikes is its question mark as
there are many players in market and company unable to differentiate itself from
competitors.
 Dogs- These are those products which has low share of market in low growth and
unattractive market. They have capability to generate enough case to break even but
investment is rare (Bolisani and Scarso, 2017).
Strategic planning
It is the activity of management which us used in order to set the priorities, strengthen
operations and ensure that stakeholders are working towards the business objectives. In relation
to Harley Davidson, various frameworks are discussed below which helps in making the
strategy for the organization-
Business strategy Corporate: It is the long ranged action oriented and comprehensive plan which is
formulated by top management. Its aim is to ascertain the business lines, growth and
expansion. Business level: This strategy relates to specific business and is developed by general
managers that convert their vision and mission into the concrete strategy.
 Functional: This strategy involves the decision making at operational level which
concerns about the functional areas such as marketing, research, human resource, etc.
The corporate strategy have three main components which are also known as growth
strategies. These are discussed below-

 Growth: It mainly signifies that decision of the management in order to lift the existing
operations. The decision relating to this strategy are aimed to increase the market share,
sales revenues and many others. Stability: This strategy mainly indicates that the management have to continue with same
level of the operations and make utilization of the present resources by sticking to present
objectives.
 Retrenchment: It involves reduction from existing operations as it is like an outcome of
the operational problems which stem either from the external environmental factors or
internal conditions (Arifin and Fadrian, 2019).
Ansoff matrix
It is the tool which provides four different strategies which helps in growth and expansion
of the organization. These are discussed below in relation to Harley Davidson- Market penetration- this strategy focuses on the current market and existing product and
services where the company seeks to growth in its existing market. For this, Harley
Davidson may opt for different offers, discounts to the customers so that the sales of the
existing customers are increased in existing market. Market development- This strategy involves entering new market but with same existing
product or service so that new customer segment is attracted and sales are enhanced in
new market. Product development- In this strategy, the organization seeks to introduce the new
offering in the existing market so that it can take competitive edge in the market and
increase the market share in existing market.
 Diversification- This strategy involves entering new market with new product and
services so that complete new market segment is attracted. It is the riskiest strategy as the
company has to enter new market with new offering (Kim and et. al., 2019).
The present strategy of Harley Davidson for the growth is market penetration. The
organization grows by making use of this intensive strategy in order to reach customers in
existing market. Now the organization may opt for market development and capture the
European and Asian market as there are high demands of the motorcycles in it.
Bowman strategic clock

This model is aimed to make aware the company about its position in market as
compared to other competitors. It consist of8 strategies, out of which Harley Davidson may opt
for one in order to grow and develop. This is narrated below- low price, low vale added- This strategy involves the relatively low price as the
competitive method so that the organisation can compete with contemporaries in market.
The value perceived by consumers is also low. Low price- The organization which follows this strategy produces large quantities of
offer and their offering is also valued in their target market. Here the company is aimed
to become low cost producer. Hybrid- It strategy can be effective of added value of the offering is consistent and well
offered and applied on regular basis. The product differentiation is done in order bring
high value in it and in the minds of customers but with low price. Differentiation- This strategy involves adding the highest perceived value in the offering
so that it is distinct in the market. It involves making innovation in product in order to
bring differentiation for customers. Focused differentiation- it applies to those companies which focus on exclusive and
luxury offering which has high quality and have also high price. The high profits are
earned by company through this due to high price in high perceived added value
products. Risky high margins- This strategy involves increasing the price of the product without
adding any perceived value to it. It is risky as there is no differentiation in the offering
when it was sold at low price ()Luo and et. al., 2019. Monopoly pricing- Here, the company position itself the leader in marker as it only has
the specific kind of product in whole market. The company is aimed to become
monopoly leader.
 Loss of market share- This strategy is opted by company when it has to make exit from
the market and is no longer capable to offer the offering which the consumers value.
Harley Davidson may opt for differentiation strategy and introduce new innovative
product to the customers so that it can generate high profits and capture the market share. This
will help in staying in existing market but offering differentiated product.

CONCLUSION
It is concluded from the above report that business strategy is a document which outlines
the plan for the company with an aim to take competitive edge in market. Harley Davidson is the
global organization which deals in motorcycles. The environmental analysis is done of it by
using PESTLE, Porters five forces and Boston matrix while competitive advantage is analysed
by using VRIO, Porters generic strategy, market segmentation and SWOT analysis. . Further it is
added that strategic planning involves setting priorities and using resources in such a manner that
competitive advantage is taken. It is done using ansoff matrix and bowman strategic clock.