The document provides an extensive analysis of Harley-Davidson's internal and external environments, identifying strategic challenges and opportunities in the motorcycle industry. It includes a SWOT analysis, examining strengths like brand loyalty and weaknesses such as competition, while presenting recommendations for globalization to enhance market share. The analysis emphasizes the importance of adapting to external factors, technological advancements, and consumer demands for sustaining competitive advantage.

1. Running head: Harley-Davidson: External and Internal Analysis
1
Harley-Davidson: External and Internal Analysis 2[Title Here,
up to 12 Words, on One to Two Lines]
John E. Lasky
Argosy University
Deborah Shearer
BUS499 – M5A1
19 January, 2018
[Title Here, up to 12 Words, on One to Two Lines]
Table of Content
Executive
Summary……………………………………………….…………...
………….3
Analysis of the External Environment (PART ONE)
…………….….………………..…3
Results from
Scanning…………………………………….………………………3
Results from
Monitoring………………………….………………………………5
Competitive
Environment………………………….……………………………...
5
Strategic Challenges/ Issues facing the
Industry………………………………….6
Internal Environment Analysis (PART TWO)
……………………………...……………6
SWOT
Analysis………………………………………………………………
…...6
Value Chain
Analysis…………………………………...………………………...8
Strategic Plan
Summary……………………………………..………………………

2. ……9
Conclusions…………………………………….……………………
….….…….10
Recommendations……………………………….…………………
…….………10
Implementation………………………………………………………
….……….10
Risks……………………………………….…………………………
….……….10
References……………………………………………………………
…………..11
Executive Summary
There are several challenges that face business ventures which
may be labelled as being generated from an internal or external
environment. The motorcycle industry along with Harley-
Davidson is not immune from in this paradigm. Firms need to
adjust accordingly to these environmental changes for them to
continue surviving and thriving. Some of these major external
and macro-environmental challenges include technology,
demographics, and the economic, socio-cultural, political and
legal environments. This paper will look at the company’s
external and internal environment.
External Environment Analysis
Results from Scanning
As mentioned above, the motorcycle industry and Harley-
Davidson are not exempt. Firms need to adjust accordingly to
these environmental changes for them to continue to survive and
thrive into the future (Schembri, 2009). Some of these major
external and macro-environmental challenges include
technology, demographics, and the economic, socio-cultural,

3. political and legal environments.
Results from Monitoring
From a monitoring perspective, the economic system and
structure that is prevailing around an organization need to be
comprehended for the business to put in place necessary
measures aimed at achieving compliance (Schembri, 2009). For
instance, the conditions of a boom or recession within the
economic systems which may be socialist, capitalist or a
mixture of the two.
Competitive Environment
Porter’s Five Forces Model
Porter’s five forces competition model that shape competition
include competitive rivalry, bargaining power of suppliers,
bargaining power of customers, the threat of new entrants and
threat of substitute products and services in the market (Arline,
2015). Competitive rivalry examines and assesses the intensity
of rivalry in the market. It is assessed by the number of
competitors in business and their strength. Besides competitive
rivalry, bargaining power of suppliers is another competitive
force. The force determines how much strength and power a
business supplier wields over its competitors and encompassing
how much control it has over prices (Schembri, 2009). In
addition to the bargaining power of suppliers, the bargaining
power of consumers is another force which pushes the power of
the consumer towards influencing prices and quality of goods
and services. Fewer customers wield more power in the market
with more sellers as opposed to many customers with few
sellers. On top of the bargaining power of customers, the threat
of new entrants into the marketplace is another competitive
force. It tends to determine the accessibility of the market by
new entrants who intend to join the competition. The easier it is
for a new entrant to join the market, the greater is the risk of
depleting market share and profitability (Arline, 2015). Also
consider that the threats of budding substitute goods and

4. services are equally another significant force. This force is
assessed as having the possibility of prospective consumers
switching loyalty from the current product or service to that of
the upcoming competitor. The threat of substitute products and
services is gauged by either long term or short-term costs
alongside customers leaning towards the change.
Value Net Analysis
H-D’s value net analysis provides strategic insights which have
been at the forefront of the company growth. The company has
based its strategy on low production based on the demands of
the clients. By so doing, H-D has been able to establish itself as
a company that produces high-quality products and one that is
not controlled by the market forces like its competitors Honda
(Schembri, 2009). The company has also based its value on the
traditional V-Twin American bikes which have become the
darling of most bikers. The strategic move to concentrate on
sports motorbikes has also added value to the company.
Dynamics of Competition/ Competitor Analysis
Competition In the industry is very high, and it is based on the
technological environment which is a crucial element in the
motorcycle industry. The nature of technology applied during
production process matter a lot and contributed to success or
failure of an organization. Improved latest technology if
adopted by a firm raises productivity and minimizes the unit
cost of output (Sheth, 1992). Thus, a competitive advantage
over its rivals. The H-D Company tried this during the world
war period with remarkable results realized. Obsolete
technology should be discarded. The demographic trends and
patterns contribute immensely to the sale of products in the
market. The population size and growth rate and the level of
education, affect supply and demand of goods and services.
Strategic Challenges/ Issues Facing the Industry
There are several challenges that face motorcycle industry
which can be explained by the PESTEL analysis. The socio-
cultural aspect of the external environment also comes in as a
major factor to be looked into. Members of the society in an

5. organization's people and their cultural and social beliefs and
practices ought to be put into account so that the business does
not violate them (Sheth, 1992). The possible social and cultural
implication the business has on the local nationals is very vital.
Social responsibility should be a major concern for the
organization. In addition to socio-cultural, the political and
legal environment also matters. The political philosophies and
ideologies in which a business operates contribute to the
shaping of its overall operations. The private sector business
activities are both controlled by national and international
politics and governance (Dyer et al., 2007). For instance, the H-
D motorcycle industry capitalized on the uncertain prevailing
political environment during world wars to enhance the sale of
its motorbikes to the American government. It turned this global
calamity into a cash cow.
Internal Environment Analysis (PART TWO)
SWOT Analysis
Strength
Harley Davidson is the current innovation leader in the
motorcycle industry.
Strong brand equity and customer loyalty.
Strong and reliable financial position and manufacture high-
quality products.
Use of social media to conduct its advertisements which have
popularized the company.
Variety of motorbikes offered by the company.
Weaknesses
Strong competition from other motorcycle manufacturing
companies which has resulted in limited market share.
Pollution of the environment has become an issue that has to
affect the company productions.
Lack of diversification strategy which has reduced company
productivity.
Opportunities
The company has an opportunity o invest I emerging markets
globally.

6. The company has a chance given its huge capital to diversify to
services and expand its market.
It should embrace a strategy that expands its demographics as a
way of expanding area of coverage.
Threats
High level of competition in the industry from other
manufacturers of motorbikes.
Government policies that impact the company revenue through
taxation.
Low pricing policy by the company competitors
Availability of substitute goods from competitors at low price
Value Chain Analysis
Primary Activities
The company has ventured heavily into the manufacture of
high-quality products throughout its different ventures (Dyer et
al., 2007). The company’s primary activity is the manufacture
of motorbikes and bike parts.
Secondary Activities
Harley Davidson provides services to its estimate customers as
its secondary activities. It also provides consultation services
and offers financial services to its valued customers.
Resource-Based Analysis
Internal
The company enjoys the high level of internal resources that
include financial and human resource. The company has been
able to employ highly qualified technicians who manufacture
the company products (Dyer et al., 2007). The human resource
at the company is highly qualified, and this has been possible
because of its high capital and revenue that it realizes from its
sales.
External
The company relies on its reliable suppliers and its chain of
supply to meet the market demands. The company also has
established distributors who ensure that its products are
available globally.
Achieving Sustainable Competitive Advantage

7. Financial Ratio Analysis/ Five-year period
The financial ratio of the company has been steady for the last
five years starting from the full financial report released in
2011 to 2016. The table below shows the financial ratio of the
company for the last five years.
Strategic Plan Summary
Conclusions
Harley Davidson has been able to achieve its current
competitive advantage because f its strategic business plans.
The company has employed internationalization policy which
has seen the company open different factories in different
regions throughout the world. Innovation has also been at the
heart of the company which has helped the company to earn
competitive advantage and became the industry leader.
Recommendations
From the company analysis, it is recommended that the
company embark on the globalization of its manufacturing
plants to increase its market share and cement its place in the
motorbike industry.
Implementation
The company will be able to implement its strategy in phases
since finance is required here to effectively implement its
strategic plan of expanding to other regions (Dyer et al., 2007).
Globalization is the only strategies that will help the company
maintain its place in the motorbike industry. Therefore, the
company should implement the globalization strategy in phases
to allow time for monitoring and assessment.
Risks
The risks associated with the strategy include over-
manufacturing which may result in overstocking (Dyer et al.,
2007). The other risk is the political environment of different
countries which may affect the company operations.

8. REFERENCES:
Arline, K. (2015). Porter's Five Forces: Analyzing the
Competition. Retrieved October 16, 2015.
Dyer, Jeff, Paul Godfrey, Robert Jensen, and David Bryce.
"Strategic management." (2007).
Schembri, S. (2009). Reframing brand experience: The
experiential meaning of Harley–Davidson. Journal of Business
Research, 62(12), 1299-1310.
Sheth, J. N. (1992). Emerging marketing strategies in a
changing macroeconomic environment: a commentary.
International Marketing Review, 9(1).
Business Overview
John E. Lasky
Argosy University
Professor deborah shearer
bus499 – M1A3
11 January 2018
VISION AND OVERVIEW PERFORMANCE
“Harley-Davidson, Inc. is an action-oriented, international
company, a leader in its commitment to continuously improve
our mutually beneficial relationships with stakeholders
(customers, suppliers, employees, shareholders, government,
and society). Harley-Davidson believes the key to success is to
balance stakeholders’ interests through the empowerment of all

9. employees to focus on value-added activities (Johnson, (2003).”
“Harley-Davidson, Inc. is an action-oriented, international
company, a leader in its commitment to continuously improve
our mutually beneficial relationships with stakeholders
(customers, suppliers, employees, shareholders, government,
and society). Harley-Davidson believes the key to success is to
balance stakeholders’ interests through the empowerment of all
employees to focus on value-added activities (Johnson, (2003).”
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ORGANIZATIONAL STRUCTURE AND MANAGEMENT
TEAM
Cross-functional teams
Decentralized Decision-Making
Included workers = Happy Workers
”Buy in”
Management team
Matthew S. Levatich: CEO
James A. McCaskin: Vice President
Enrico D’Onofrio: Managing Director
Cross-functional teams brings specialists from multiple skillsets
together so they can directly cooperate with one another while
simultaneously making design and manufacturing decisions
(Bishop, 1999).
Cross-functional teams build every Harley-Davidson motorcycle
produced beginning with its conception and design of the

10. motorcycles to their assembly and product launch. The different
teams of buyers, suppliers, manufacturing engineers and further
still can make their opinion known. The ideal way to achieve
this goal of building a great motorcycle is to involve everyone
that is responsible for building motorcycles (Brunelli, 1999).
With cross-functional teams, decision-making is decentralized
through the use of lateral decision methods, which accelerates
the decision-making process because it can cut out the lines of
bureaucracy and functional authority, therefore letting more
people from all of the affected departments “buy-in” to the end
product (Brunelli, 1999).
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BRANDS, PRODUCTS, AND SERVICES
Motorcycles
Seven different models including the trike
Prototype Electric Motorbike “Livewire”
Parts and Accessories
General merchandise
Figure 1 (Chakravarty, 2014)
Products and services offered by the organization revolve
around the sale of motor cycles. Below are the various products
and services:
Motorcycle sales average around 78% of the company’s sales.
Manufactures seven different models of motor cycles which is
what they are known for. Many different variations are
available from each model such as the street bike, soft tail,
sportster, touring, CVO and the trike.
Parts and accessories are also available for modification,
upgrading or repairing of motorcycles.

11. General Merchandise is a big money maker for the company as
millions buy t-shirts, key rings, and other collectibles although
they may not own a machine themselves.
4
CORPORATE GOALS AND OBJECTIVES
long-term strategy through 2027 focuses on five objectives:
Build two million new Harley-Davidson riders in the U.S.;
Grow international business to 50 percent of annual volume;
Launch 100 new, high-impact motorcycles;
Deliver superior return on invested capital for Harley-Davidson
Motor Company (S&P 500 top 25%); and
Grow the business without growing its environmental impact
(Anderson, 2018).
As stated by CEO Matthew S. Levatich Harley Davidson plans
to increase the number of riders globally. Believing that a
focused strategy with their dominant brand and commitment to
excellence will put the company in position to grow the demand
for their products while cultivating the sport (Anderson, 2018).
The company’s long-term strategy through 2027 is focused on
five objectives to:
Build two million new Harley-Davidson riders in the U.S.;
Grow international business to 50 percent of annual volume;
Launch 100 new, high-impact motorcycles;
Deliver superior return on invested capital for Harley-Davidson
Motor Company (S&P 500 top 25%); and
Grow the business without growing its environmental impact.
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12. TOTAL REVENUE AND NET PROFIT 2016
Total Revenue 2016 - $5,996,458
Net Income - $692,164
The organization registered a drop in revenues and profits in
2009.
The revenues added up to $4.29 billion compared to $5.58 in
2008 and the net profit was $70.6 million compared to $684.2
million in 2008(Briel & Hall, 2010).
This is 23% drop in revenue and a 90% drop in profits which is
drastic.
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REFERENCES
Anderson, Adam. (2018). Harley Davidson Inc., Retrieved from
http://subscriber.hoovers.com.libproxy.edmc.edu/H/company360
/overview.html?companyId=10706000000000&newsCompanyDu
ns=102224623
Bishop, S. K. (1999). Cross-functional project teams in
functionally aligned organizations. Project Management
Journal, 30(3), 6–12.
Brunelli, M. A. (1999). How Harley-Davidson uses cross-
functional teams. Purchasing, 127(7), 144-148. Retrieved from
https://login.libproxy.edmc.edu/login?url=https://search-
proquest-
com.libproxy.edmc.edu/docview/214447607?accountid=34899
Chakravarty, M. A. (1999). Image 1 (image file) An electric
Harley Davidson Motorcycle is here and its named Project
Livewire. Retrieved from
http://luxurylaunches.com/transport/harley-davidson-electric-

13. motorcycle-project-livewire.php
Johnson, M. (2003, Aug 24). Even corporate CEOS buy into
Harley-Davidson mystique. Knight Ridder Tribune Business
News Retrieved from
https://login.libproxy.edmc.edu/login?url=https://search-
proquest-
com.libproxy.edmc.edu/docview/461465335?accountid=34899
SEC, US. (2017, April 18). Form 8-K, Harley Davidson, Inc..
Project Management Journal, 30(3), 6–12.
Brunelli, M. A. (1999). How harley-davidson uses cross-
functional teams. Purchasing, 127(7), 144-148. Retrieved from
https://login.libproxy.edmc.edu/login?url=https://search-
proquest-
com.libproxy.edmc.edu/docview/214447607?accountid=34899
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