Harley-Davidson's Strategic Management: Internal Analysis and Swot (Case Study Sample)
Module 4 - Case STRATEGIC MANAGEMENT: INTERNAL ANALYSIS AND SWOT In Module 4 Case Assignment, we will be looking inside of Harley-Davidson in order to identify its strengths and weaknesses. It is important to consider how these factors will either help the company overcome the threats (or make it more vulnerable), or put it in a position where it can take advantage of opportunities (or will have to let them pass by because they do not have the internal resources to act). To complete Module 3 Case Assignment, please read the information in the background material, look for more information (from previous modules and library resources), and then write a 4- to 5-page report answering the following questions: What are H-D’s top two or three strengths for moving forward in the competitive motorcycle manufacturing and sales environment? Describe what you consider to be two or three of the weaknesses that are likely to have the greatest impact, and what H-D is doing (or should be doing) to overcome these weaknesses? Wrap up by overviewing the more salient points of your entire SWOT analysis (from your Mod 3 and 4 Case Assignment) and give your impressions in relation to whether you think the corporation will continue to be competitive and be able to continue to meet its mission. Note: Please note that your report/assignment will not be accepted without proper citations and references. You must use the sources from the background material together with the sources you find your own. Assignment Expectations This paper should include: An introduction stating the thesis, position, or central theme you plan to take in your paper, a main body discussing focusing on the key assignment specifications, and a conclusion concisely stating the main points of your analysis and the conclusions you reached. Be sure to document your sources and provide in-text citations whenever you use information you obtained from a background reading or other outside source, as well as a separate reference list at the end of the paper. You may use footnotes instead, if you prefer, but you must document where you got the information you are using in your papers! The following criteria will also be used to assess your paper: Precision: Does the paper address the question(s) or task(s)? Breadth: Is the full breadth of the subject (i.e., all the keys to the assignment) addressed? Depth: Does the paper/report address all elements of the topic in sufficient depth? Does it include and apply the background readings and other background resources? Are they included as references? Critical thinking: Are the concepts of this module applied accurately, logically, and relevantly? Organization: Is the paper organized in a coherent and systematic manner? Are headings included in all papers longer than 2 pages? Clarity: Is the writing clear and are the concepts articulated properly? Are paraphrasing and synthesis of concepts the primary means of response to the questions, or are thoughts conveyed through excessive use of quotations? Module 4 - Background STRATEGIC MANAGEMENT: INTERNAL ANALYSIS AND SWOT Required Reading Since you are completing your discussion of SWOT analysis in this module, the materials presented in this module are the same materials you discussed in the previous unit. You may want to visit some of the earlier modules as well for some of the inside information on H-D. Here is an article that discusses some internal and external challenges faced by Harley Davidson: Taylor, A., (2012). The Hurdles at Harley-Davidson. CNN Money – Fortune. Retrieved from: http://money.cnn.com/2012/10/03/autos/harley-davidson-polaris.fortune/index.html Here is a very brief strategic analysis of HD. It will provide you with some useful information in putting together your assignments and should give you some ideas on how to fashion a brief strategic analysis. GlobalData, (2012). Harley-Davidson, Inc. – Financial and Strategic Analysis Review. Retrieved from:http://callisto.ggsrv.com/imgsrv/Fetch?banner=4d609cd7&digest=27b6b6d33026b58ef227e0025dda7d42&contentSet=SWOT&recordID=47405_GDAUT29887FSAHere is a fairly recent article that speaks to HD’s worldwide sales: UMC Staff, (2013) Harley-Davidson | 2012 Worldwide Sales Up 6.2%. Ultimate Motorcycling. Retrieved from: http://ultimatemotorcycling.com/harley-davidson-2012-worldwide-sales-up-6-2/ Here is an article that discusses some internal and external challenges faced by Harley Davidson: Taylor, A., (2012). The Hurdles at Harley-Davidson. CNN Money – Fortune. Retrieved from: http://money.cnn.com/2012/10/03/autos/harley-davidson-polaris.fortune/index.html Here is a press release from 2012 that provides some good overview information on what was going on at HD in August of 2012: Harley Davidson, (2012). Harley Davidson shows continued improvement. Retrieved from: http://www.harley-davidson.com/en_US/Content/Pages/HD_News/Company/news.html?article=en_US/News/1483_press_release.hdnews Here is an overview of SWOT analyses. There are examples at the bottom of the Web page you might want to take a look at as well. Marketingteacher.com (2011). SWOT Analysis. Retrieved August 2011 from http://marketingteacher.com/lesson-store/lesson-swot.html The following PowerPoint is also useful to understand external analysis of the company that may help to understand the difference between the Macro and the Micro perspectives: Be.wvu.edu (n.d.). External analysis. Retrieved August 2011 from www.be.wvu.edu/divmim/mgmt/insch/External.ppt A very useful framework for assessing the internal environment is the “Resource Based View of strategy or RBV.” The idea behind RBV is that a firm gains its competitive advantage by developing and managing its internal resources and capabilities in a manner that is superior to the competition. By examining these resources and capabilities, we can identify strengths and weaknesses in the organization. Resources Tangible: Tangible resources include physical assets (plants and equipment), financial resources (cash balances, debt obligations, debt-to-equity ratios), and human resources (both number of employees and employee productivity). Intangible: Intangible assets include intellectual resources (e.g. copyrights and patents), technical resources (proprietary technologies, etc.), and goodwill (the value of the firm beyond measurable assets—usually reported on the balance sheet). Distinctive Capabilities: Capabilities are concerned with "process" issues in how the firm does business. They include architecture (the nature of the relationships between the firm and its stakeholders), innovation (the speed with which the firm can adapt to change or move into new products/services), and reputation (perception of the firm as being ethical and offering quality goods/services). For a general reading about the RBV approach to strategic analysis, read: 12manage.com (2011). Earning sustainable supra-normal returns by superior resources. Explanation of Resource Based View (Perspective) of Barney '91. 12 Manage: The Executive Fast Track. Retrieved August 2011 from http://www.12manage.com/methods_barney_resource_based_view_firm.htmlsource..
In this report, Harley-Davidson’s three strengths for moving in the competitive motorbike production and sales environment are discussed in an in-depth manner. Three weaknesses of the company are also discussed which are probable to have the most impact. A SWOT analysis is an essential tool that is used to audit a company and its environment. Threats and opportunities are external factors whereas weaknesses and strengths are the internal factors. Thesis: Harley-Davidson has a strong brand name and extensive market share in the United States’ market which is essential in the competitive motorcycle manufacturing sector. However, its motorcycles are very fuel inefficient and costly which deters many potential customers from buying them. H-D can improve its sales greatly by reducing the prices and manufacturing more fuel efficient motorbikes.
(i) Strong brand name and brand image: this is a major strength for the company given that it provides H-D with the capacity of charging higher prices for their motorcycle products since clients place additional value in the brand. Harley-Davidson is well-established in minds of customers in the United States. H-D has created the perception of freedom and strength in the customers’ minds (Rovito, 2011). Currently, H-D is one of the most recognized and admired corporations worldwide. It has a reputation for manufacturing motorbikes which represent American image and spirit. H-D’s reputation is one of durable and tough motorbikes for everyone and its emphasis is good-quality motorcycles as well as after sales service. These qualities are imperative in building brand loyalty (Lenz, 2010).
(ii) Large market share in the United States: at present, Harley-Davidson is the only American brand that makes heavy motorcycles. This has allowed it to gain a substantial market share in the American heavy weight motorcycle market. At present, Popkin (2014) observed that H-D holds a dominant 54.9% of the market share in the United States. To keep improving the sales of motorbikes, Harley-Davidson has focused on increasing the variety and assortment of its clientele-base by way of product innovation and marketing.
(iii) Loyal Customers: H-D has loyal clientele who have enabled the company to maintain a large market share particularly in the United States. The moment a buyer purchases his/her first H-D motorbike, he/she will become hooked to the brand and they will rarely switch to a different, competing brand. This high degree of customer loyalty is primarily because of the high-level of customer support and customer service that the owners of the company offer through the Harley Owners Group (HOG) and its extensive networks of dealerships (Popkin, 2014). At the rallies organized by Harley Owners Group, the company’s top management typically interacts with owners of H...
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