Question 2: What does a Porter five forces analysis reveal about the strategies HD has employed in

recent year?

Answer to the question No 2:

Porter Five Issues/ Factor affecting HD’s Strategies Comment

Forces on HD
The threat of HD focuses on quality, reliability,
the entry of new China and India largely styling and warranty
competitors produce motorcycle
Joint venture with Honda Technological development,
and Kawasaki Nostalgic Traditional Design, Style
and Image, heavyweight market
segment,
Big-Dog, Polaris and
number of small custom- Premium pricing to limit the
shops that cater to the young buyer..
ultrahigh-end motorcycle
market HD has designed some of its bike
to better accommodate
Female riders

HD also offers motorcycle driver

education training and 40% of
them are women

HD’s expansion through acquiring

Buell Motorcycle Company, MV
Agusta to emphasize design and
performance and feature a liquid-
cooled, four-cylinder engine
design like featuring 125 cc air
cooled engine.

Three Strategy: 1. Investing in HD

brand 2. Restructuring
operations and reducing the cost
structure and 3. Obtaining
funding for HDFS

Intends to increase the market

size by reaching out to
nontraditional rider group
including women and minority.

Restructuring operations is to be
accomplished by plant closing
 and out sourcing. This strategy
would reduce product demand
that will loss of 1500 hourly and
salaried positions.

The intensity of Ducati, Teutonic, BMW Changing export policy and

competitive offshore sales 22% to 28% in
rivalry Ducati has dominated 2008
the world Super-bike Combined sales in America and
Championships for over Europe
ten years New design (V-ROD, VRSC)for
European market
As a race proven bikes HD acquired Italian manufacturer
Ducati sold for use on the MV Agusta.
street the ultimate café
race. By 2005 management had
narrowed the gap of demand and
Large diversified supply.
competitors are Honda, The Company was forced to cut
Yamaha, Kawasaki, Suzuki back on manufacturing to avoid
and BMW oversupplying in the market
along with offer any offer and
Three different series of discount.
BMW stressing superior
quality, premium pricing,
standard technology,
environment and safety

Honda has 17 % North

American Market, 22 %
European Market and
23% Asia-Pacific market
share (In 2008) with
excellent engineering and
quality with highly
automated
manufacturing. It can
leverage into low cost
advantage into global
leadership.

Kawasaki makes multiple

model of motor cycles
with high-performance
and low-maintenance
attributives products
Kawasaki holds the third
 largest motorcycle
market share in North
America, fourth largest
share in Asia-Pacific and
fifth largest share in
Europe.

Suzuki, the third largest

motorcycle
manufacturer.
International presence in
190 countries. It has joint
manufacturing effort in
foreign countries.
Position in the industry as
low cost product with
higher efficiency.

Yamaha has
manufacturing facilities,
distribution and R&D in
many international
markets.
Its full-line of motorcycles
ranging from scooters to
heavyweights focusing on
speedy and high
performance racing bikes.
Yamaha hold the fifth
largest market in North
America, third largest in
Asia Pacific and second
largest in Europe.

The threat of
substitute
products or
services

The bargaining Because of the recession

power of customer lost higher
customers purchasing power that
might enhance bargaining
(buyers) power of the customer.
That’s why it was
observed that HD
entered the market place
at bargain price.
The bargaining
power of
suppliers