Harley-Davidson Inc. (also known as Harley or H-D) is one of the biggest motorcycle manufacturers in the world. This SWOT analysis assesses the internal and external strategic factors that influence the company’s competitive advantages and overall development, especially against other players, such as Yamaha, Honda, Ducati, Kawasaki, BMW, and Suzuki. With a strong American brand, Harley-Davidson succeeds by maximizing the business benefits of its strengths and opportunities, against the weaknesses and threats outlined in this SWOT analysis. The company optimizes its performance to ensure the long-term sustainability of its automotive business. The net effect of the internal factors (strengths and weaknesses) allows Harley-Davidson’s operations to expand internationally. However, the market is dynamic and highly competitive, especially when considering the presence of low-cost motorcycles. Harley-Davidson needs to account for the effects of the external factors (opportunities and threats) impacting the business. These SWOT factors determine how the motorcycle business evolves. Long-term strategic planning with innovative solutions is needed to fully address the issues detailed in this SWOT analysis of Harley-Davidson Inc.
The changing global market and competitive forces impose strategic challenges against Harley-Davidson. With such considerations in the motorcycle market and the automotive industry, this SWOT analysis highlights the need for change in the company’s product mix, innovation, and global market strategies. The generic strategy and intensive growth strategies of Harley-Davidson are responses to the SWOT factors. Also, the company’s competitive advantages and stable customer base help in addressing such strategic challenges.
Harley-Davidson’s Strengths (Internal Strategic Factors)
Despite the challenges in the industry and issues within its organization, Harley-Davidson maintains strengths that support the continuation of its business. This element of the SWOT analysis identifies the internal strategic factors that contribute to the automotive company’s capabilities for growth and development. The company’s strengths are primarily linked to brand image and the chopper motorcycle market culture. The following are among the main strengths that affect business growth and improvement in this case of Harley-Davidson:
- Strong image of the Harley-Davidson brand
- Organizational culture that attracts a stable base of loyal customers
- Expertise in custom/chopper motorcycle design and production
Harley-Davidson is one of the strongest brands in the motorcycle market. This brand image is especially notable because of the custom/chopper biker culture, which is strongly associated with the company. Harley-Davidson’s corporate culture supports and reflects such a biker culture. This organizational culture maintains a stable base of loyal customers who exhibit pride in using the company’s motorcycles and identify with the business and what it represents. In the SWOT analysis context, this strength helps Harley keep a stable market share and stable revenues. In addition, more than a century of custom design and production experience creates the company’s strength of expertise in the business. The SWOT analysis framework views this internal factor as a capability and competitive advantage that protects Harley-Davidson from other firms, especially low-cost producers. For example, the company’s designers are experts in satisfying customers’ expectations and preferences when it comes to chopper/custom motorcycles. In this element of the SWOT analysis, Harley-Davidson’s strengths ensure business stability despite aggressive and low-cost competitors. These strengths also help shield the business from new entrants that imitate the company’s designs and strategies in the chopper market. Such strengths facilitate profitability and effective product design and manufacturing, which are key factors in Harley-Davidson’s corporate vision and mission statements.
Weaknesses of Harley-Davidson (Internal Strategic Factors)
Harley-Davidson’s weaknesses are based on the current limited focus and reach of the business. This element of the SWOT analysis tackles the internal strategic factors that prevent the motorcycle company from growing, expanding, and maximizing its revenues and overall performance. The following are Harley-Davidson’s most notable weaknesses:
- Narrow product mix focused on chopper/custom motorcycles
- Limited market reach despite multinational presence
- Limited supply chain strategy for supporting global expansion
Harley-Davidson’s narrow product mix is a weakness because it prevents the business from reaching more market segments. For example, the company focuses mainly on chopper-type motorbikes. In the SWOT analysis framework, this internal factor limits the company from maximizing its potential revenues, such as from the production and sale of other automotive products. Harley-Davidson is also weak because it generates the majority of its sales in North America. In motorcycle markets outside North America, the company has small, insignificant, or non-existent sales. This SWOT analysis views such an internal factor as a strategic challenge in growing the motorcycle business through multinational operations. Moreover, the automotive company has a limited supply chain strategy for supporting its multinational production, with suppliers focused mainly on supporting existing operations. This internal strategic factor hampers Harley-Davidson’s potential global expansion despite the strengths enumerated in this SWOT analysis. The motorcycle company needs to adjust its strategies to remove such a limitation and gain more revenue from sales in more markets worldwide. In overcoming the weaknesses in this element of the SWOT analysis, Harley-Davidson’s marketing mix (4Ps) reinforces business capabilities, especially in maximizing sales despite limitations in product offerings and market reach.
Opportunities for Harley-Davidson (External Strategic Factors)
Harley-Davidson’s opportunities are related to the global motorcycle market’s potential as well as the company’s competitive advantages and strengths for growth. This element of the SWOT analysis identifies external strategic factors that facilitate the growth and improvement of the automotive business. The following are among the opportunities available to Harley-Davidson:
- Global expansion of automotive manufacturing and sales
- Product diversification beyond chopper/custom motorcycles
- Alliances with complementary businesses in the automotive industry
Harley-Davidson has the opportunity to expand, especially in high-growth markets. In the context of the SWOT analysis, this external factor could raise revenues and profits, while maintaining the company’s stable presence in the chopper market segment. On the other hand, diversifying the product mix is viewed as an opportunity in the SWOT framework, pertaining to possible expansion of Harley-Davidson’s business. For example, the company could develop other types of motorcycles and other automobiles, considering that the business already has the potential and experience in design and manufacturing. Strategies for expansion and diversification could require changes in Harley-Davidson’s corporate structure. Moreover, the company has the opportunity to establish alliances or partnerships to increase its market reach and grow the business, similar to its past partnership with Lehman Trikes. In this SWOT analysis, such alliances can give rise to a stronger multinational market presence and faster market penetration for Harley-Davidson products. The business organization could then grow its automotive business based on such alliances, while maintaining a mutually beneficial relationship with partners. This element of the SWOT analysis of Harley-Davidson Inc. presents significant opportunities to grow the business, especially internationally.
Threats Facing Harley-Davidson (External Strategic Factors)
The threats facing H-D are based on market trends and legal structures. This element of the SWOT analysis covers the external strategic factors that reduce the motorcycle company’s performance or prevent it from growing. The following are major threats against Harley-Davidson:
- Aggressive competition with various international players
- Imitation of motorcycle designs
- Increasing preference for electric vehicles
Harley-Davidson experiences aggressive competition, which in the SWOT analysis framework is a threat against the business. For example, Honda and other motorcycle manufacturers are aggressive in selling low-cost products. In addition, Harley-Davidson faces the threat of imitation, which is an external factor that could reduce the competitiveness of the company’s products. In this SWOT analysis, this threat weakens the company’s sales and enables imitators to benefit from the company’s chopper designs. These external factors are contributors to strong competitive rivalry in the industry (See Porter’s Five Forces Analysis of Harley-Davidson Inc.). Furthermore, this SWOT analysis points to the increasing preference for electric vehicles as a threat to the motorcycle business. The PESTEL/PESTLE analysis of Harley-Davidson Inc. establishes that this threat is a trend that supports business sustainability and ecologically sound products. Preference for electric vehicles could reduce the attractiveness of the company’s motorcycles, which are known for internal combustion engines. The threats in this SWOT analysis put emphasis on strategic changes, such as a more stringent corporate social responsibility strategy with regard to Harley-Davidson’s stakeholders.
Key Points & Recommendations – SWOT Analysis of Harley-Davidson Inc.
This SWOT analysis of Harley-Davidson reveals the need for reforms in the business. The global motorcycle market presents opportunities for growth, but the company has a narrow product mix, limited market reach, and a limited supply chain. The firm also needs to address environmentalism that impacts the competitiveness of gasoline-powered motorcycles. The following are some recommendations for Harley-Davidson Inc. to further address the issues raised in this SWOT analysis of the business:
- Broaden the product mix through innovation and diversification beyond current motorcycles.
- Globally expand manufacturing and sales, especially in developing markets.
- Change strategies for the purpose of globally expanding the supply chain to support the multinational expansion of manufacturing and sales.
- Innovate to make Harley-Davidson’s brand and products known for environmental friendliness.
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- Harley-Davidson, Inc. – Form 10-K.
- Harley-Davidson, Inc. – Our Strategy.
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