Five-forces and blue ocean strategy analysis

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Reference no: EM132197127

Five-Forces and Blue Ocean Strategy Analysis for the Harley-Davidson Organization

Harley-Davidson (H-D) is a legendary brand name in the automotive industry. The company is very well known for its Research & Development (R&D) of its premium built motorcycles. Harley-Davidson has proved itself as a constant growing company in the automotive industry and has directly affected the business of different automotive manufacturers.

H-D’s differentiation can be defined as follows.

Extremely strong brand image.

Loyal customers

Expert in motorcycle making in their form factor.

An organization’s particular “competitive position” is how it will win and create unique value within its specific industry.

Porter’s Five Forces analysis of the Harley-Davidson company looks at the external factors in the motorcycle industry environment and the motor vehicle industry environment in general. H-D seems rather long-standing compared to other companies, but there are also companies in the motorcycle and motor vehicle industry that provide high quality information to customers that gives them knowledge they need to make better decisions on purchases. The bargaining power of suppliers is a weak force due to forward integration being low in this industry, which give suppliers low control over the distribution of their products. Threat of substitution is a moderate force because customers consider H-D a status symbol and the probability of it being substituted is quite low among those who can afford it. The treat of new entrants is also a moderate force due to the there being moderate economies of scale in this segment, as well as, the market entry barriers being high.

The five-forces of the external environment that most affect the Harley-Davidson company from achieving its strategic goals, sustain goals, sustain and grow its business pertains to the:

Competitive rivalry: Strong force. It helps in identifying similar companies that have a great impact on the motorcycle industry. Various factors such as high availability of substitutes, moderate variety of firms and high number of firms that helps in creating strong force of rivalry. This force is high due to the various established competitors of Harley-Davidson in the market, each with a wide customer base.

Bargaining power of buyers or customers: Strong force. Customers have a variety of options to cater to in the market segment. Various external factors such as high quality of information, switching cost and high substitute availability contributes in bargaining power of the company.

The recommendations are as follows:

The company should focus on counteracting the above two strong forces that are strong bargaining power of customers and strong competitive rivalry. (Increase product development and invest more in technology innovation)

The company should continuously invest in technology, innovation and product development.

The company should maintain competitiveness in terms of the quality of its products to keep it different from other companies.

The company should continuously address the concerns related to these strong competitive forces through strategic alliances, global expansion, and market penetration.

The company should continuously build on its strategy of change in purchaser demography, which has an impact on the industry as it creates new gender into purchasing the product, as well as, increase the demand of product as more buyers enter the market, which can alter the industry and competitive condition.

Expansion of production into countries and pursue these markets aggressively. (Adjusting products to the desires of the specified country)

Increase R&D on branding to the younger generation and make it even more attractive to young people outside the U.S.

The company should create real relationships with each type of customer

The company should keep a strong brand equity throughout all consumer groups

The company should improve brand image among young customers

QUESTION:

A related set of metrics that will enable Harley-Davidson to measure the effectiveness of the above recommended actions.

Reference no: EM132197127

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