Harley Davidson Analysis Plan

The Analysis of H-D's External Environment

The international market is increasing, and has become larger than the United States market. Harley Davidson is currently the only biggest largest motorcycle in the world. Keep in mind that with that recession situation China and Asia are the two countries that are not affected by it. However, it has shown that Harley did some manufacturing in these two countries only to decrease prices and increased production, which it was a good decision made.

There are Five Forces of the Porter’s Model, and it is also known as a very unique and most accurate model. Degree of rivalry or competition is the first force. With this force, it assist determination to know its value and it is created for the industry itself. In doing so, it will diminished and lead on competition. This rivalry force is most likely occurs only on the industries that are afraid of substituting products, suppliers or buyers within the market.

Moreover, it is also a threat of entry as an influence of most likely having competitors profits within the industry. In addition, due to the market entry barriers, the threat of entry is based on it and its modified based on cost per capital. Usually other entry barriers are the capabilities to buy from major parts, procuring, to know the competitors, laws and new legislation, cost advantage, and distinction.

The second force is the threat of substitutes. This force includes substitute products This involves substitute products that eventually raise to profits from the industry only on the type of presented products or services handed over to the buyers. Examples are as follow:

• Fax or email (Product Substitution)

• Common Substitution

• Substituting products or items that buyers can’t live without. For instance, cigarettes.

Industry influenced the created buying power. However, the amount of consumers caused the highest level of buying power as well as other similar elements to which consumers are notify of their different competition. Typically a couple of major players in the market are buying power. It also includes small business that is supplying the larger business as well as the low cost buying in between suppliers.

Supplier Power is the last force. In another definition, it means a mirror image of the consumer power as well as the supplier power results in their participation supplies inputs. When the consumers or buyers are charging different prices only because the value that was created to each buyer shows that the market is charging consumer different prices based upon the value created for each buyer typically indicates the market is presented by highest supplier power. Some power suppliers make use of the following situations:

• Integration

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