Harley Davidson's External Environment

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Based on the case study report, there are external threats in Harley-Davidson’s external environment. These are: the threat of entry, legal factors and political factors. The threat of entry is the determination of how easy it is for Harley-Davidson to enter the industry; and in this case this is fairly low. Economies of scale are crucial for the industry of automation. In the event Harley-Davidson had already established themselves in the industry and established channels for distribution, it would be now easier to carry out operations in production on a large scale. The threat of entry is considerably low in regards to administration; since there are few government and legal constraints in the motorcycle operating company (Barney 2011). In…show more content…
In this focus-differentiation strategy, the company invests in a heavyweight market as opposed to a lightweight market, whereby they consider their motorcycles as luxury products that serve a heavy weight market (Barney 2011). In regard to differentiation, the company bases its strategies on customer’s psychological and social needs. The company is in the market to solely sell lifestyle, not really a means of transportation. As such they encompass more on external and internal product integrity. The critical factors that they seek to address in such a focused differentiation business strategy is the ability of customers and employees to identify with one another, for instance the management might wear biking attire. As such Harley-Davidson’s business strategy has achieved a differentiation advantage by careful examination of customer activities. There are however strategic recommendations to the business structure that would be in place to address the company’s looming threats (Grant 2010). One, the company should reinforce strategic alliance engagement with channels of distribution in the Asian market. This is because Harley-Davidson is faced by a lack of market expansion resulting into fewer market opportunities. The major challenge Harley-Davidson’s business strategy is that a larger market in Europe is taken by BMW and an Asian replacement would imply that the company applies persistence and time investment so that they can operate successfully in the Asian market. They should also put up country based management teams that will assist the company in making wise cultural decisions. As mentioned earlier, there are government and legal threats and these can be reduced through more involvement with foreign governments through the US trade office. More involvement in the activities of the world trade
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