Harley Davidson SWOT Analysis 2024 With Recommendations

Harley Davidson is a sensation for motorcycle enthusiasts. Featured in many war and action movies, series such as “Sons Of Anarchy”, and many more. With a hundred years of history, it has a loyal and solid customer base.

With excellent operational skill management, it has a robust financial ratio and R&D wing. But, with the various environmental concerns and economic recession, and premium product prices, there have been sales declining issues, which we will learn in this Harley Davidson SWOT analysis.

Let’s dive in!

Harley Davidson: Company Overview

From building the company’s first bike in a shed in 1905, it is now one of the biggest bike manufacturers in the world. Founded in 1903 by William S. Harley, Arthur Davidson, Walter Davidson, and William A. Davidson, it has gone through many great economic depressions and two world wars.

With around 6000 employees, 1400 dealerships and a presence in more than 100 countries all over the globe, it is one of the oldest and most reputed brands. With substantial financial performance and revenue of more than $1.649B in 2022, it’s going strong.

But, in the past decades, it has been facing new challenges.

Product & Services of Harley Davidson
Motorcycles | Accessories for Bikers

Harley Davidson Competitors
Yamaha | Ducati | Triumph | Kawasaki | BMW | Honda

Did You Know?

One of the significant and loyal customers of Harley Davidson is the police department of the USA. Since the company’s inception, the company has continuously been making customized police bikes.

Strengths – Harley Davidson SWOT Analysis

Positive Brand Reputation: Harley-Davidson is one of the most well-known and reputed brands worldwide, not just for its long history but also for its excellent product. Their bikes have catered for thousands of motorcycle enthusiasts. They are highly reputed globally with more than 100 years of history, iconic brand culture, image, and most loyal customer base.

Committed R&D Wing: Innovation is one of the significant parts behind a company’s success. In the year 2021 alone, the total R&D expense was 175.1 M. For its continuous innovation, most products are hit because of their outstanding service and long-lasting performances.

Community Dealership: it’s no wonder why and how Harley Davidson reached this mass target audience. The massive reach was possible because Harley-Davidson has more than 14 hundred dealerships in more than 100 countries and around 700 dealerships in the USA alone.

Product Variety: Harley-Davidson has produced many famous and quality products over a hundred years. Not just that they have all kinds of products for all types of target markets, but they fulfil the enthusiasts’ needs. With more than 50 bikes in the mainline and more to join, it’s going strong.

Excellence Operation: Harley has one of the most experienced management teams and has excellent coordination among the departments. Having a CEO, Jochen Zeitz, who has more than three decades of experience and manufacturing capabilities to produce more than 45K bikes in around ten countries, says about their operational excellence.

Strong Finance: They have one of the most robust financial ROI and other metrics. The cash flow is excellent, with $1.649B in revenue in 2022, a 20% growth from the last year. Besides, the 1.36 current ratio says everything about their financial capability.

Weaknesses – Harley Davidson SWOT Analysis

Unbalanced Revenue Model: The company’s revenue highly depends on the USA market, as almost 70% comes from here. With the economic recession hanging in the neck, the risk is always there if any minor convenience shakes the entire economy, and the company will see a downfall in revenue.

Low International Market Share: The motorcycle industry is growing and is now valued at over $119.33 B. And most market growth is happening in the Asian markets. But, with a low presence in those markets and various restrictions, the market share of Harley-Davidson is significantly lacking in other continents.

Declining Demand Curve: As the world is going through new ways of things and so are the people of these generations, Harley-Davidson is considered classic. Besides, the demand for electric bikes has significantly affected the market, so we are seeing declining sales.

Expensive Product: In this economy, price plays an essential factor. As Harley Davidson is a premium brand with premium products and price ranges, it has become a significant weakness. People can get the same offering from other brands at lower prices in this market.

Lack of Product Diversification: Harley Davidson has tried to expand their product line in other segments but significantly failed. They even tried basic producing electric bikes, and they couldn’t go ahead with the strategy, and they have proven to be incompatible with their mainline.

Opportunities – Harley Davidson SWOT Analysis

Expand Target Market: As the global economy is on the rise, so is the opportunity to expand to new markets in other continents. Many third-world developing countries and Asian markets are the perfect markets to grab, as these countries have young generations, and the motorcycle industry in these countries is growing.

Grow Global Presence: Even though Harley Davidson has almost 1400 dealerships in 100 countries, 70% are in the USA alone. As a result, it has a comparatively low presence in other continents, where it can increase its global presence and make more dealerships.

Introducing B2C System: The old way of selling a Harley Davidson is through dealers. But, in this modern world, people want authenticity and direct communication. The company has the perfect opportunity to communicate directly with customers and sell them on their doorstep.

Strategic Business Expansion: The company’s target audience is mainly the young generation and people who are into cultural trends. The company can expand and make more strategic plans with various businesses, as it did a strategic deal with Marvel Studio.

Electric Motorcycle Segment: With the rising demand for the electric vehicle market, it’s about time they start expanding the product line to electric bikes. As the CEO, Jochen Zeitz mentioned that the company will renovate the entire product line and will all be electric bikes.

Threats – Harley Davidson SWOT Analysis

Saturated Market: As the motorcycle industry is growing, so is the competition. Harley Davidson is facing challenges in both the local market and globally. In the USA, many competitors are trying to capture the market, and Harley Davidson had to leave the Indian market because of poor sales.

Economic Recession: In 2023, another economic recession is knocking at the door, and there are already signs of it. These times, people are more reserved about spending money on expensive products. Harley Davidson will likely face sales challenges this year as a premium-priced product.

Growing Environmental Concern: Carbon emissions and other concerns lead people toward green energy and products. As a result, people prefer electric vehicles. As bikes’ carbon emissions are a considerable number, it’s a concern for people, and we already see the effect of increasing demand for electric vehicles.

Price Increase: With the price increase, you can get the lowest-priced Harley-Davidson at $14,399. The amount is considered very high compared to other competitors. And in the middle of the recession, it is one of the biggest threats to the company.

Trade Policies: In the global village era, companies rely on each other, as does Harley Davidson. But, with the economic war, the price of the imported parts is rising, and it is getting challenging to cost as minimum as possible. Besides, Europe’s carbon emission policy became a restriction for non-electric vehicles.

[Bonus Infographic] SWOT Analysis of Harley Davidson

Recommendations for Harley Davidson

As we can see, with hundreds of years of experience and history, Harley-Davidson is facing new problems. But here are the things that they can do to improve the overall situation;

• The priority should be introducing world-class electric bikes that speak and deliver the highest quality product in the industry.
• They should focus more on expanding the market to other continents.
• Another path is to grow a presence globally, especially in developed countries.
• More strategic planning with various entities will grow the overall presence and reach new target markets.
• Reaching and delivering products to the customer will be a new addition similar to Tesla and will reduce costs.

Frequently Asked Questions (FAQs)

Final Words on Harley Davidson SWOT Analysis

With globalization and new ways of life, Harley Davidson is still going strong with its loyal customer base, increased number of dealerships, positive reputation, and strong R&D wing. But on the other hand, economic recession, tough competition, environmental concerns and other trade issues have led the company to face new challenges. But, if we learn anything from the company’s history, they will always get back to the top through these challenges.

References

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