Harley-Davidson stands as a bastion of the chopper motorcycle culture. This branding and competitive position represents the company’s strategic fit in addressing concerns raised in this PESTEL/PESTLE analysis to ensure long-term profitability. The PESTLE analysis identifies the external factors in the remote or macro-environment of Harley-Davidson. The analysis determines if these external factors create opportunities or threats for the business. With its strong brand, the motorcycle manufacturer expects to continue as a major player in the motorcycle industry. However, long-term profitability and the achievement of business goals and Harley-Davidson’s mission and vision in domestic and international markets depend on strategies for addressing the opportunities and threats identified in this PESTEL analysis.
This PESTEL/PESTLE analysis of Harley-Davidson shows that the company has many opportunities to grow its business and improve its resilience. However, the PESTEL analysis also highlights the importance of strategic reform based on external factors in the motorcycle company’s remote or macro-environment. Effective reforms can improve the competitive advantages identified in the SWOT analysis of Harley-Davidson and increase organizational capacity to solve issues linked to the external factors considered in this PESTLE analysis.
Political Factors Affecting Harley-Davidson’s Business
The political climate affects markets where Harley-Davidson operates. Governmental influence on motorcycle companies is evaluated in this component of the PESTEL analysis. The following political factors significantly affect Harley-Davidson’s external environment:
- Free-trade agreements (opportunity & threat)
- Increasing support for e-commerce (opportunity)
- Improving inter-governmental support for patent protection (opportunity)
Harley-Davidson benefits from free-trade agreements, which facilitate the company’s global expansion. However, such an external factor threatens the business by increasing the influx of cheaper products or substitutes that compete with Harley-Davidson. On the other hand, the increasing support for e-commerce creates opportunities for improving the motorcycle company’s market reach through online media. Harley-Davidson also has better patent protection for its products, based on intergovernmental efforts on patent law. This component of the PESTEL analysis indicates that the current political factors in the remote or macro-environment bring opportunities for Harley-Davidson’s global growth.
Economic Factors Important to Harley-Davidson
Harley-Davidson must address the economic aspect of the market. This component of the PESTLE analysis examines the economic aspect of the external environment of the motorcycle company. The economic factors relevant to Harley-Davidson’s business are as follows:
- Economic stability of major markets (opportunity)
- Economic growth of developing countries (opportunity)
- Stable credit accessibility (threat & opportunity)
The economic stability of major markets presents opportunities for Harley-Davidson to stably grow its business in its core markets, especially the United States. Also, the company has opportunities for rapid growth and expansion in some developing countries where there is demand for chopper motorcycles. On the other hand, stable credit accessibility enables competitors, such as Ducati, Honda, and Yamaha. Nonetheless, Harley-Davidson can capitalize on its economies of scale to protect its business from competition in the remote or macro-environment. The external factors in this component of the PESTLE analysis show that Harley-Davidson has significant opportunities for domestic and international development. Business strategies must account for these opportunities. For instance, Harley-Davidson’s generic competitive strategies and intensive growth strategies can focus on goals for competitiveness and growth based on the global economic opportunities identified in this PESTLE analysis.
Social/Sociocultural Factors Influencing Harley-Davidson’s Business Environment
Sociocultural changes can impact the remote or macro-environment of Harley-Davidson’s business. In this component of the PESTEL analysis, social conditions are considered. The following sociocultural factors are important to Harley-Davidson:
- Increasing attitudes about leisure (opportunity)
- Increasing involvement of women in chopper biking (opportunity)
- Increasing attitudes about green technology (threat & opportunity)
Harley-Davidson must include social issues in strategy formulation based on the company’s remote or macro-environment. For instance, the increasing attitudes about leisure create opportunities for the firm to market its products as leisure motorcycles. Also, the increasing involvement of women in chopper biking presents an opportunity for Harley-Davidson to increase its marketing efforts to target female customers. The increasing attitudes about green technology are a threat to the company because most of its products have combustion engines with considerable emissions. Nonetheless, Harley-Davidson can improve the green technologies in its products to address this concern. This component of the PESTEL analysis points out the significant opportunities for marketing and product development based on the effects of external factors in Harley-Davidson’s sociocultural environment. Adjustments to the characteristics of the motorcycle business organization can help take these opportunities. Harley-Davidson’s organizational culture (work culture) can support strategic decisions based on the social factors in this PESTEL analysis.
Technological Factors in Harley-Davidson’s Business
Technologies are an essential aspect of Harley-Davidson’s products and business operations. This component of the PESTLE analysis evaluates the impact of technological changes and trends on the company and its remote or macro-environment. In Harley-Davidson’s case, the following technological factors are relevant:
- Increasing availability of green technologies (opportunity)
- Moderate R&D investments in the motorcycle industry (opportunity)
- Increasing use of computing technology in vehicles (opportunity)
Harley-Davidson has the opportunity to improve its products by integrating green technologies. This opportunity can boost the company’s performance because most chopper motorcycles do not have high green-technology ratings. Also, Harley-Davidson can increase its research and development (R&D) investments to develop features of products or technologies as a major selling point. Moreover, the firm can integrate additional computing technology features to make its motorcycles more attractive. The external factors in this component of the PESTLE analysis indicate that Harley-Davidson has opportunities to improve its products’ features to boost business performance in the remote or macro-environment of the motorcycle industry. Also, Harley-Davidson’s operations management can implement process enhancements for the technological opportunities in this PESTLE analysis.
Ecological/Environmental Factors
Harley-Davidson’s business performance responds to ecological conditions. The effects of ecological trends and changes are considered in this component of the PESTEL analysis. The following ecological factors are most notable in Harley-Davidson’s external environment:
- Increasing interest in business sustainability (opportunity)
- Low-carbon lifestyles (opportunity)
- Climate change (threat & opportunity)
Current ecological trends emphasize business sustainability. Harley-Davidson can address this concern through changes in its business operations for higher sustainability ratings. Also, the company can highlight the environmentally friendly features of its products to attract customers with low-carbon lifestyles. However, climate change can reduce the attractiveness of Harley-Davidson’s products, which tend to have mediocre emissions ratings. Nonetheless, the company has the opportunity to improve the fuel efficiency of its products to attract environmentally conscious riders. This ecological component of the PESTEL analysis shows that Harley-Davidson must consider changing its business processes and product features to address the effects of external factors on the industry environment. Harley-Davidson’s corporate social responsibility strategy and corporate citizenship programs help address the ecological factors in this PESTEL analysis.
Legal Factors
Harley-Davidson must satisfy legal requirements. This component of the PESTLE analysis outlines the influence of legal or regulatory conditions on the motorcycle company’s remote or macro-environment. Harley-Davidson must address the following legal factors:
- Expanding emissions regulations (opportunity)
- Environmental protection laws (opportunity)
- Loopholes in international patent laws (threat)
Harley-Davidson has the opportunity to satisfy and exceed the requirements of emissions regulations. In relation, the company can improve its sustainability policies as well as contributions to environmentalist programs. Despite intergovernmental efforts, some loopholes in international patent laws threaten Harley-Davidson through weak protection against imitation, which also affects other firms in the remote or macro-environment. Based on the external factors in this component of the PESTLE analysis model, Harley-Davidson can improve its business processes and products to satisfy environmentalist regulations.
Insights & Recommendations – PESTLE/PESTEL Analysis of Harley-Davidson
The external factors enumerated in this PESTLE analysis of Harley-Davidson emphasize major opportunities for competitiveness, business growth, and resilience. These opportunities are based on conditions of the remote or macro-environment. It is recommended that Harley-Davidson implement changes in its global growth strategy. These changes must address the opportunities based on free-trade agreements and the economic growth of developing countries. Also, Harley-Davidson can further develop its online marketing campaigns to take advantage of increasing support for e-commerce. Based on opportunities for product development, it is recommended that Harley-Davidson improve the green technology and environmental impact of its products. Such an improvement addresses the opportunities based on attitudes about green technology, low-carbon lifestyles, and expanding emissions regulations. Moreover, this PESTLE/PESTEL analysis indicates the benefit of reforming Harley-Davidson’s marketing mix (4P) and related aspects of its marketing strategy to address the opportunities based on increasing attitudes about leisure and women’s interest in chopper motorcycles. The company can significantly increase its business performance through these opportunities in the motorcycle market.
References
- Cadavid, L., & Salazar-Serna, K. (2021). Mapping the research landscape for the motorcycle market policies: Sustainability as a trend – A systematic literature review. Sustainability, 13(19), 10813.
- Harley-Davidson, Inc. – Form 10-K.
- Harley-Davidson, Inc. – Our Strategy.
- Martinez-Contreras, R. M., Hernandez-Mora, N. C., Vargas-Leguizamon, Y. R., & Borja-Barrera, S. M. (2022). PESTEL Analysis and the Porter’s Five Forces: An Integrated Model of Strategic Sectors. In Handbook of Research on Organizational Sustainability in Turbulent Economies (pp. 292-314). IGI Global.
- Wang, P., Tan, X., Wang, G., Li, J., Su, Q., Shen, C., & Zhang, Y. (2021). A digital modeling framework for the motorcycle industry with advanced computer design. Soft Computing, 25(18), 12465-12476.