Strategic Management: SWOT and Internal Analysis (Coursework Sample)

Strategic Management: SWOT and Internal Analysis
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Strategic Management: SWOT and Internal Analysis
Harley-Davidson (HD) Motor Company
Harley-Davidson Inc., abbreviated HD, is one of America's greatest motorcycle manufacturers. HD was founded in Milwaukee, Wisconsin in the first decade of the 20th century. The company was founded by William Harvey and Arthur Davidson, who designed the company's first engine. HD has a good performance track record, and its business success began in the First World War, when the company provided all the motorcycles used by the United States military. The company is known for producing heavyweight motorcycles including racing, militant and high power street motorcycles. The purpose of this paper is to analyze the strengths and weaknesses of HD in the highly competitive motorcycle market. To achieve this objective, a full SWOT analysis is first outlined and followed up by a discussion of the greatest strengths and weaknesses of the company.
SWOT Analysis of Harley-Davidson
Strengths
* Strong brand equity, high brand awareness and brand history
* Product promotion: Publicity through film
* Customer loyalty
* High market share
* Stable contracts
* E-commerce
* Social media marketing
* Use of innovation
Weaknesses
* High cost limits the customer base
* Limited product range
Opportunities
* Expansion to new markets
* Product diversification
* Acquisition of smaller firms to expand the HD empire
Threats
* The end of the ‘baby boomers' era
* Stiff competition in the global market
* The expansion of the motor vehicle market
* The invention of electric, zero-emission vehicles
Internal Analysis
Strengths
Strong brand equity, high brand awareness and brand history
Harley-Davidson is an established, strong brand in the United States and in the global motorcycles market. The HD brand motorcycles are regarded to as ‘Harleys' and reflect classic designs. These designs are mainly refined vintage cycles from earlier decades and highly customized motorcycles that provide pride to the customers. The Harley-Davidson brand has a strong identity, awareness and image. The strong brand gives HD a competitive advantage over competitor motorcycles because it customers have a predilection for ‘Harleys'. The HD brand derives much of its great brand identity from its good brand history. The company started from a barely successful experiment by two young men. For the past century, HD has provided high value and quality motorcycles that even fought in the World Wars. This good brand history attracts customers to the HD motorcycle experience CITATION Gle11 \l 1033 (Rifkin, 2011). The company has taken bold steps to preserve its strong brand. The company keeps a strong brand community through clubs, racing events, and the HD museum, in which the firm's vintage designs are displayed. HD's strong brand is a key strength for the company's future. Some of HD's brand community clubs include the Harley owners group, which has more than a million members across the globe, the Harlistas, a club for Latino riders, Women riders, Iron Elite and the Military and Veteran riders CITATION Har14 \l 1033 (Harley-Davidson Inc., 2014).
Product promotion: Publicity through film
Harley Davidson has been using community clubs to market its brand since the 1950s, when sales boomed after the World War II. The image of the company was severely damaged by a riders' club known as Hells Angels. This was a gang of riders who were raucous and notorious for drug trafficking and organized crimes. Hell Angels used only Harley-Davidson bikes, and tarnished the company's brand image in the 1960s. The release of the film Easy Rider in the year 1969 mend HD's image and boosted its sales CITATION DMi97 \l 1033 (Mitchel, 1997). The company's bikes have been starring in several films ever since and have given the company great publicity. HD's new Street 750 bike is featured in Captain America: The Winter Soldier, a film that will be released in April 2014 CITATION Jef132 \l 1033 (Engel, 2013). The film is a part of the renowned Captain America sequel. The appearance of HD bikes in movies gains the bikes great publicity and increases the sales of featured products.
Customer loyalty
One of Harley-Davidson's goals is to improve customer satisfaction. The company's strong brand also has a great customer loyalty. The company's brand marketing strategy of maintaining contact with customers through community clubs fosters loyalty among existing customers as well as attracts new customers. The company also has a competent e-commerce strategy through which customer loyalty is established.
Weaknesses
High cost limits the customer base
HD's bikes are very expensive and majority of the bikes are above $4,000 CITATION Har14 \l 1033 (Harley-Davidson Inc., 2014). This means that the company's target market comprises the affluent and people above the medium social class. The high cost of the company's products is a brand weakness because it locks out the less affluent clientele. Despite the high cost, HD may have high sales in America because of its strong brand. However, in the global market, buyers are more price conscious than Americans and may buy cheaper high performance bikes from Yamaha, Honda and BMW. The high cost of HD's bikes henceforth reduces its global market share. The high cost of HD products gives other firms a competitive advantage over the company's products. HD should not engage in price wars but should consider the reduction of costs through greater production efficiency.
Limited product range
HD stocks heavyweight and middleweight motorcycles. The company's attempts in the lightweight motorcycles have been unsuccessful, and the company has abandoned that sector since the sale of Aermacchi HD in 1978. The baby boomers have been the greatest customer segment for HD, but they have aged or declined in health. HD's luxury motorcycles are not well-suited for the later generations which prefer lightweight but sporty motorcycles CITATION DMi97 \l 1033 (Mitchel, 1997). Lightweight bikes such as scooters and mopeds have gained popularity and have a wide market among the young and the less affluent. HD should adjust its product range to secure sustainability for the future.
Overview
Harley Davidson Inc. is a renowned American Motorcycles producer that has been in operation for the past century. Harley Davidson's SWOT above indicates that the company's strengths outweigh its weaknesses. One of the greatest strengths is that the company has a strong brand with a good brand history and great brand awareness and identity. The Harley Davidson brand is well known in America due to the company's history and its contribution to the World Wars I and II through militant bi...