Based on the provided information below

Based on the provided information below…. Using Porter’s approach to industry analysis, analyze various competitive forces and discuss whether/how strongly they are contributing to the competitive pressure faced by the company.

CASE: HARLEY DAVIDSON INC. 2008: THRIVING THROUGH A RECESSION 
 Brief Summary

Harley Davidson, Inc. is an American motorcycle manufacturer headquartered in Milwaukee, Wisconsin. Established in 1901, William Harley, a draftsman, and his best friend, Arthur Davidson, came together and began experimenting with different ideas and designs; to create their first motorcycle. Harley and Davidson expanded their team during the experimenting process by including Arthur’s brothers, William, the machinist, and Walter, the skilled mechanic. The motor company started in a small shed in Davidson’s family backyard. In two years (1903), the team of men built and sold their first three motorcycles; over the next few years, the production of motorcycles increased to eight. In 1907, the company moved to what we know now as Harley Davidson, Inc on Juneau Avenue in Milwaukee, Wisconsin. The company has been successful in the motorcycle industry thus far. They expanded operations with their competitors in Africa, the Middle Eastern, Europe, Latin America, and Asia-Pacific.

Fast forwarding to 2008, Harley Davidson, Inc. celebrated its 105th year of operations; the company was undergoing a decline in motorcycle revenues but managed to sustain. Although the company had experienced a similar decrease in the 1980s, they were now facing new rivals in a competitive market, an aging customer base, and a global recession. CEO James Ziemer wanted to maintain the company’s growth; therefore, he opened Harley Davidson, Inc.’s first dealership in China. With the expansion, Harley Davidson, Inc. has maintained its reputation and customers by sticking to its mission statement; we fulfill dreams through the experience of motorcycling by providing motorcyclists and the public with an expanding line of motorcycles, branded products, and services in selected market segments. 

SWOT list

1. Strengths
   1. New Management – installed a Materials as Needed (MAN) system to reduce inventories and stabilize production. The system forced production to work with marketing for a more accurate forecast. This led the company to set precise production schedules each month.
   2. The creation of V-Rod – the first genuinely new motorcycle in over 50 years, introduced in 2001, appealed more to the younger generation. V-Rod is the quickest and fastest production model the company ever built, rather than the original bulky, expensive Harley touring bikes.
   3. Experienced Top Management -President James C. Ziemer started with the company 38 years ago as a freight elevator operator and served as a CFO from 2005 when he assumed the CEO role upon Jeff Bleustein’s retirement.
   4. Harley Owners Group (H.O.G) – over 1,000,000 members. Offered customers organized opportunities to ride their famed bikes. H.O.G rallies visibly promoted the Harley-Davidson experience to potential new customers and strengthened the relationships among members, dealers, and Harley-Davidson employees.
   5. Domestic Distribution -the company implemented a new U.S. motorcycle distribution system to better align demand with the supply of bikes. Approximately 80 percent of U.S. dealerships sold Harley-Davidson motorcycles exclusively. Independent dealers sold smaller parts, accessories, general merchandise, and licensed products through non-traditional retail outlets.
   6. Wholesale Shipment Plan – the company reduced its wholesale motorcycle shipment plan during the fourth quarter to ship fewer Harley-Davidson motorcycles than expected for dealers worldwide to sell at retail. As a result, their international dealer network delivered doubled digit retail sales growth in 2007.
   7. Supplier Relationship – the company dedicated its time to establishing long-term, mutually beneficial relationships with suppliers. Collaboration with suppliers allowed the company to access technical and commercial resources that aided the application of product design and development.
   8. Harley-Davidson Financial Service (HDFS) – provides wholesale financial services to Harley-Davidson and Buell dealers and retail financing to customers. The financial service offers financing accounts for motorcycles and their parts and accessories, computer loans, showroom remodeling loans, and real estate loans.
2. Weakness 
   1. Aging Customers – primarily rockers who grew up in the sixties and seventies and were aging and no longer purchasing Harley-Davidson motorcycles. As a result, it caused a downward spiral in retail sales.
   2. Limited Audience – the average Harley-Davidson motorcycle purchaser was a married male in his late forties, with an average household income of $81,300. Who sought out the motorcycle for recreational purposes rather than transportation.
   3. AMF Inc. Ownership – only favored short-term profits rather than investing time into research, development, and retooling as the Japanese competitors continued improving their motorcycles’ quality. AMF Inc. ignored the malfunctions of a Harley Davidson, such as the noise, heavy vibration, oil leaks, hard-to-handle machines, and poorly finished products.
   4. Supply Chain Management – In 1997, nine purchasing departments operated from different plant locations, fourteen separate sets of terms and conditions, with nearly 4,000 suppliers.
   5. Limited Resources – Major competitors outside the United States have more financial and marketing resources and are more diversified. This allowed competitors to have larger worldwide sales volumes.
   6. Voluntary Recalls – within the last three years, the company initiated 15 recalls that cost them $10.8 million.
   7. Harley-Davidson Financial Services (HDFS) – the retail financial service is limited to most Harley-Davidson and Buell dealers only in the United States and Canada.
   8. Seasonality – in Canada and the United States, motorcycles are primarily used during the warmer months, March through August. They were causing retail financing to increase and wholesale funding to decrease in the warmer months. However, from September through mid-March retail customers do not purchase motorcycles, causing a decrease in retail financing while dealers’ inventories build and turnover at a slower rate.
3. Opportunities 
   1. Relationships with suppliers – A relationship with their suppliers would allow the organization to have better deals and give better quality motorcycles to their consumers.
   2. Supply chain management in the 1990s – once someone can come in and help with supply chain management experience, there will be fewer expenses to build the motorcycles
   3. Technology – having technology used for customer relationships will increase the chances of potential and current customers continuing to purchase from the company and allow the company to track inventory and customer complaints better.
   4. Younger/International markets – current buyers are those in their mid-forties; targeting those younger/international markets will allow the organization to have new potential buyers who can purchase more motorcycles from the company in future years.
   5. Diversification of the Harley-Davison team – to allow other women to see an opportunity for them in this space, there will be a new market to attract and influence, and these women will change how everyone will see bicycling riding
   6. Buell Riders Adventure Group – having these groups allow various riders to connect and market to them why they should purchase a Harley-Davidson motorcycle compared to their competitors.
   7. Rider’s Edge – increasing the programs and having it for an affordable price to allow potential consumers to come into the dealerships to have a safety course, allowing them to see the motorcycles and how the organization cares for those who are on the road
   8. HDFS – consumers who are purchasing HD motorcycles are also using their financing; if HDFS continues to give these consumers deals when their lease/car loan is up, their consumers will continue to come back and purchase every 3-5 years
4. Threats 
   1. Poor quality manufacturing – purchasing parts that were not the best purchase for motorcycles and increasing consumer dissatisfaction
   2. International competition – other organizations out of the United States had more financial and marketing resources, larger “worldwide” sales volume, and diversification
   3. 2008 recession – during the recession, revenue decreased because customers were no longer purchasing new motorcycles because it was not a necessity
   4. The average U.S Harley Davison purchaser is a married man in his late forties – if there are only men who are in their late forties purchasing from HD, there will also be a lack of potential revenue from other potential buyers, ex, college students who enjoy motorcycles
   5. Not making changes for motorcycle designs for 100 years – consumers are interested in the new next item every year or two; if there is the same design for 100 years and potential consumers do not like the design, they will purchase from a competitor
   6. Lack of Social Media Advertising in 2008 – Facebook began to have social media ads in 2008; this was a chance to start the process of marketing to other consumers on the market for a motorcycle
   7. Motorcycle accidents – Many potential buyers are nervous about purchasing motorcycles because of accidents on the road; more buyers would instead take their chances in a car accident than in a motorcycle accident. Making it harder to have them purchase a motorcycle in the future.
   8. Motorcycle recalls – Harley Davidson lost 10 million dollars in revenue due to 15 motorcycle recalls they have done; this money could have been used for potential research for future developments.

 SWOT MATCHING MATRIX