| Name | Harley-Davidson, Inc. (NYSE:HOG) |
| Industry | Consumer Discretionary Products, Sub: Automotive |
| Founded | 1903 |
| Headoffice | Milwaukee, Wisconsin |
| CEO | Jochen Zeitz |
| Revenues | $ 4,054 Million, 2020 |
| Net income | $ 1.3 Million, 2020 |
| Competitors | Suzuki, BMW, Yamaha, Ducati, Kawasaki, Honda |
Harley-Davidson is an American manufacturer and seller of heavyweight cruiser and custom motorcycles as well as offers accessories, parts, general merchandising, and other related services. Harley-Davidson has a market capitalization of $5.7 Billion and it sells motorcycles through a network of independent dealers in the US, Canada, Europe, Asia-pacific, and the Middle East. In 2020, Harley-Davidson ranked 21st in 100-top most powerful brands and ranked 5th in Global RepTrak 100 (Bloomberg, 2021; SyncForce, 2021). Let’s go over the detailed SWOT Analysis of the company.
Harley Davidson Strengths 2021:
- Strong brand image.
With 117 years old brand history, Harley-Davidson has strong brand equity and motorcycle innovation leadership in the US. Scarrow (2021) discussed that Harley-Davidson motorcycles have a unique style, features, innovative design, customization, quality, distinctive sound, and reliability which make it an iconic ‘brand cult’. - Resilient product innovation capabilities.
Harley-Davidson has strong product innovation capabilities to retain its position as the market leader in the motorcycle market. In 2021, the company launched adventure bikes to compete against Honda and BMW. Hyatt (2021) pointed out that the company has launched sleeker and smaller bikes such as Serial-1 and electric bikes in the US. - 50% market share in the US.
In the heavyweight motorcycle market (engine displacement over 600 cc), Harley-division controls half of the US market through manufacturing and selling award-winning motorcycles. The brand cult of Harley-Davidson cemented in American consumer minds continues to attract and retain customers (Harley-Davidson, 2021). - Large distribution and dealership network.
Harley-Davidson has a strong dealership and distribution network for customer retention and experience. The availability of motorcycles, accessories, parts, financing, merchandising, and insurance through a global dealer network is considered a source of competitive advantage. In 2020, the company has 1379 dealerships out of which 630 in the US, 370 in Europe, and 281 in the Asia Pacific region. - Loyal customers and brand community.
According to Forbes (2021), Harley-Davidson maintains a large base of loyal customers who identify themselves with the brand and exhibit pride in owning the company’s motorcycles. The company manages a large brand community in the US managed through events, clubs, and museums.
Harley Davidson Weaknesses 2021:
- Generation gaps and new demographics.
Jacobs (2021) analyzed that Harley-Davidson is struggling to appeal to millennials and Generation Z in the way chopper-type motorbikes appealed to baby boomers. The younger demographics purchase motorcycles for practical and pragmatic reasons when compared to babyboomer love for huge bikes. Harley-Davidson heavyweight and high-cost products do not fit with younger people’s styles and preferences for lightweight vehicles from Suzuki, Yamaha, and Kawasaki (Fortune, 2020). - Flop electric motorcycle (LiveWire).
According to Tim Levin (2021), Harley-Davidson electric bike has failed to attract and capture the younger generation. With the price of $30,000, delayed deliveries, and a highway range of 95 miles, Livewire has cut down the appeal for HOG electric bikes. There is strong competition from Ego, Brutus, Lightening, and Zero motorcycles. - US market reliance and fewer international sales.
Harley-Davidson generates most of its sales from the US market. Globally, the company has insignificant sales outside North America and relying on the US market potentially limits the revenue opportunities from international markets. From a total sale of 180, 246 units in 2020, the 110,127 units were sold in North America (Harley-Davidson, 2021). - Environment concerns.
The younger generation consumers have expressed concern for environmental issues and Harley-Davidson heavy motorbikes are not viewed as eco-friendly and big polluters. The lack of sustainability reduces the brand appeal among environment-friendly customers (Reuters, 2020).
Harley Davidson Opportunities 2021:
- Social media marketing.
Harley-Davidson marketing through social media platforms provides a new way of communicating and understanding younger generation preferences. To improve brand image and appeal, social media marketing allows engaging in two-way communication with the target audience in their comfort and favorite places online (Forbes, 2020). - Global expansion and product development.
Harley-Davidson has an opportunity to expand and penetrate global markets for growth and revenues. Davis (2021) stated in global markets, the company needs to develop motorcycles that fit with local culture and market requirements, as the company already has the experience and potential in design and manufacturing motorcycles. - Sustainability.
In the motorcycle industry, sustainability and urbanization will change the motorcycle and mobility paradigm. The product features and characteristics such as stress-free, accident-free, and emission-free are likely to shape the future of the motorcycle industry. - Digitalization of business.
According to Llopis-Albert, Rubio, and Valero (2021), the digitalization of business operations including products, operations, and commerce provides an opportunity to make the company customer-centric. For instance, the company can leverage big data analytics to understand customers segments and serve their needs efficient manner. The digitalization of the value chain would ensure the brand connects with customers throughout their purchase journey.
Harley Davidson Threats 2021:
- The decline in share price.
The company share price has dropped significantly in the last five years because of profitability and restructuring issues. - Strong competition from international brands.
Aggressive competition from international players such as BMW, Ducati, Kawasaki, and Yamaha is a major threat for Harley-Davidson. The introduction of new products based on cost and quality attracts young generation customers who are less inclined to a Harley-Davidson attitude (MT Newswires, 2020). - Indian market failure.
Singh (2020) pointed that HOG failed to understand customers’ profiles such as price and quality, or product positioning which resulted in poor sales. For instance, the cheapest Harley-Davidson bike cost was 0.6 Million which was out of reach of customers. This highlights the inability of the company to expand and compete in the global markets. - Lack of strategic direction.
The new CEO, Jochen Zeitz has announced to cut costs through reducing geographies and cutting product models. HOG’s ‘Rewire strategy’ has resulted in an exit from multiple international markets and the company has laid off 700 employees. Harley-Davidson has stuck between cost-cutting, retaining core-bike brand,s and targeting new environmentally friendly customers (Bloomberg, 2021). - Old white-guy brand image.
Harley-Davidson has a unique image with a customer who loves rebellious style and outlaw credibility which has helped to create brand cult and biker culture. Voyles (2020) analyzed that the new generation is less inclined towards heavy motorbikes and has a rebellious attitude. The new players such as Triumph and Ducati have appealed to the younger through sustainability and mobility in urban lifestyle.
Harley Davidson SWOT Analysis Conclusion:
The generation gap and sustainability are redefining and changing the motorcycle industry paradigm. For Harley-Davidson, the lack of global image, reliance on the US market, and poor electric motorcycle sales has threatened share price, strategic direction, and market position. Nonetheless, the company has strong brand equity, loyal customers, and innovation capabilities to exploit market opportunities and retain its market position in the market.
- You can find blank SWOT Templates here
- If you need assistance with your project, here are our done for you services
References:
- SyncForce (2021). Harley-Davidson — Rankings per brand.
- Bloomberg (2021). Can Jochen Zeitz Revive Harley-Davidson?
- Bloomberg (2021). Harley-Davidson Inc.
- Davis, Ben (2021). Is Harley Davidson a global company?
- Forbes (2021). Should You Create A Brand Community Or Not?
- Forbes (2020). Simple Social Media Visuals: A Motorcycle Case Study.
- Fortune (2020). Are Millennials Killing Harley-Davidson? Younger Consumers Are Buying Motorcycles for Different Reasons.
- Harley-Davidson (2021). Harley-Davidson, Inc — Annual Report.
- Hyatt, Kyle (2021). Harley-Davidson Pan America 1250 is how Milwaukee does adventure.
- Jacobs, Fred (2020). Can Harley-Davidson Jump Over The Demographic Cliff?
- Llopis-Albert, Carlos, Francisco Rubio and Francisco Valero (2021). Impact of digital transformation on the automotive industry.
- MT Newswires (2020). Harley-Davidson Demand Hurt by Competition, Pre-Owned Pricing as Company Moves Into Electric Market.
- Reuters (2020). Harley struggles to fire up new generation of riders with electric bike debut.
- Scarrow, Katherine (2021). How cult brands are made: The four Ds of difference.
- Karan Deep Singh (2020). After a Long Ride, Harley-Davidson Is Leaving India.
- Tim Levin (2021). Harley-Davidson’s first electric motorcycle has been a total flop.
- Voyles, Bennett (2020). Electric bikes and trade wars are just two of the hurdles Harley-Davidson has to cross to survive.
