Harley Davidson, established in 1903, is a largest producer of motor bikes in the United States. When Harley Davidson dominates the moto market in the United States, it is extremely small when compared to international market which is compromised with huge Japanese companies such as Kawasaki, Honda and Yamaha who produce different categories of motor bikes. Harley Davidson has deep rooted company equity in the usa and remains to be loyal in it’s style. It has as well remained regular in manufacturing only heavyweight motor bikes.
By showcasing only just one model type, Harley Davidson has established itself as being a leader in the United States market.
Various other international market segments, especially Asia and europe, produce many lines of sports motorbikes (street cycles, scooters etc), as this meets the demands of these marketplaces. Harley Davidson classifies their very own bikes in to three primary heavyweight categories (1) Traveling Bikes, (2) Custom Bicycles, and (3) Sportster Bikes. More than half of Harley Davidson’s revenue is usually generated coming from sales from within the United States, which has a much smaller presence in Europe, Asia and Latin America.
Harley davidson Davidson features tried unsuccessfully to acquire additional motorycle businesses twice since its origination although ultimately features continued to keep its catalog simple and focused around a couple of primary items. Description of information and Sources
Initialal research was conducted on the great Harley Davidson Motorcycles by simply researching their website. Data was then obtained from a variety of options including industry journals, annual sales reports, and company websites. By comparing revenue and gross annual (10k) reports to those of its competitors, we were capable to determine marketplace patterns and explain the industry structure by which Harley Davidson Motorcycle competes. Sales information
compared units offered by the Harley Davidson, as well as competition among firms internationally displayed by the type of bikes sold and which geographic areas.
Justification of Strategies
In order to establish preliminary market structure and competition, we accumulated data on the total devices of Top quality motorcycles sold in 2012 in the United States. We gathered data within the numbers of units sold simply by Harley Davidson’s top 3 competitors, which in turn we discovered were Honda, Kawasaki and Yamaha, respectively. In order to set up a price every unit, we-took the typical price of each and every firm’s high quality inventory then took a typical based on these figures.
The quantity of units offered multiplied occasions average selling price per unit gave all of us an accurate representation of above sales for 2012 when cross referenced with annual report data. Our data had several limitations as being a firm’s data did not emphasize units offered or product sales revenue from the heavyweight industry. We had to deduce and infer while using data we were given. An additional limitation in data collection came when ever gathering details about price tag up and marginal price. We searched for information from industry experts who insight in this field. Analysis and Results
The C4 four-firm concentration ratio of. 880 indicates that there are only a few companies who produce most of the industry’s output. The heavyweight industry is highly targeted. Most of this kind of industry’s result is created by Harley Davidson, Honda, Phazer and Kawasaki. The Herfindahl-Hirschman Index (HHI) is several, 586 out of 10, 000. This kind of suggests that you will discover multiple organizations in the industry whom consume some considerable part of the market share. The top several firms be the cause of almost 40% of the marketplace. This amount would prevent an investor when contemplating a possible combination. Demand and Pricing Structure/Lerner Index
The Lerner Index for a Harley Davidson is definitely. 25 as well as the mark-up can be 1 . 3. HD costs a price 25% over the limited cost or 1 . 3 times the actual little cost. Put simply, for each buck paid in the consumer towards the purchase of a new motorcycle, $. 25 is markup. Marketplace Structure
Harley davidson Davidson (HD) Motorcycles have sufficient different aspects that contribute to the industry structure, especially the classification of motorcycles by size, the number of organizations in the market both equally national and international, company equity promoting which includes access to the attire, accessories and licensing marketplaces, barriers to entry and various combination attempts before.
HD Motorbikes are grouped into top quality classes just like Touring, Custom made, or Sportster. In 2011 Visiting motorcycle made up 92, 002 bikes out of a total of 233, 117 bikes sold for Harley davidson Davidson (Harley Davidson Inc., 2012). Second leading in sales had been Custom cycles at 91, 459 bikes (Harley Davidson Inc., 2012). Overall, Harley Davidson distributed 152, 180 units in the usa and 70, 937 units internationally to get FY 2011 (Harley Davidson, Inc., 2012).
In foreign markets Harley Davidson marketed 83, 505 units in comparison to 151, 683 units in the United States (Harley Davidson, Inc., 2012). Outside of the United States, sales in Europe and surrounding areas were the second largest place for Harley Davidson with 44, 340 units sold in 2011 (Harley Davidson, Inc. 2012).
Devices sold in the Asian Area came in third at twenty one, 416 models, and the least number of devices sold for Harley davidson Davidson was in the Latina American Location, at several, 247 devices. All locations saw an increase in the number of models sold from 2010 to 2011 nevertheless the United States even now remains accountable for 68% of total units sold (Harley Davidson, Inc., 2012). In 2012 HD experienced continued development as they distributed 145, 391 units throughout the world in the initial 6 months; this really is a being unfaithful. 3% boost from the yr before. Full sales also increased simply by 12% in the usa with a 16. 5% embrace Asia/Pacific and a 58% in Latin America (Harley Davidson, Incorporation., 2013). Harley davidson Davidson offers seen regular growth lately.
Harley Davidson has not usually sustained annually growth. While the economy was slowing slipping during the economic depression of 08, Harley Davidson was required to make several decisions in order to survive. Last season Harley Davidson announced they can discontinue the Buell Motorbike brand from their line to focus all of their methods on generating their major products to ensure Harley Davidson to stay undone (Crowe, 2009). In year 1994 Harley Davidson became a 49% owner in Buell Motorcycle Business, a company that was founded by a former Harley Davidson professional, Erik Buell (Autoevolution, 2013).
In 1998, 4 years after entering organization together Harley Davidson bought an additional 49% of Buell Motor Firm leaving the creator with only 2% ownership (Autoevolution, 2013). Harley davidson Davidson will continue functioning with Buell motorcycle brand for the next 11 years creating over 17 models of innovative motorcycles, however in 2009, because profits reduced, HD made a decision to end business with Buell.
In 2008, during these same difficult monetary times, Harley davidson Davidson bought an Italian motorcycle company MV Agusta for $109 million hoping to increase sales and industry expansion overseas in an region dominated by Japanese competition (Barrett, 2010). Shortly after purchase the market tanked and Harley davidson Davidson got recorded $162 million in losses while using MV Agusta line (Crowe, 2009). The relationship lasted just over a year prior to Harley Davidson decided to offer the brand in 2009, at the same time it discontinued the relationship with Buell.
Finally, accessories and licensing sales is another segment of the marketplace heavily completely outclassed by Harley Davidson. Through the economy crash while bike sales stunted revenue produced from the sales of attire and products helped to contribute to the overall bottom line intended for Harley Davidson. In 2012 $69. 3 , 000, 000 was generated from the product sales of basic merchandise trademarked as “MotorClothes was up 12. 8% from FY 2011 (Harley Davidson Inc., 2012).
Overview and Conclusion
Although Harley Davidson dominates the marketplace in the United States, it has been the smallest in Europe as well as the 4th in Asia/Pacific region which is focused by Western brands. One reason for Harley’s smaller business in the Asia and europe region is usually that the company cannot produce enough motorcycles to fulfill the demand as well as its prices often be more than competitive types. Shortages of Harleys lead many customers to purchase competitive bikes and there is 2-year waiting lists for some Harley models (“Company spotlight: Harley-Davidson).
This would lead us to think that Harley Davidson provides for a leader within a Stackelberg Oligopoly as it selects its degree of output available in the market. In the United States Harley Davidson is usually one of some firms that creates motorcycles pertaining to touring or cruising. Harley davidson Davidson makes differentiated companies remains the best in selling all of them. Competitor organizations such as Honda and Phazer sell a significantly smaller sized number of motor bikes in the US market segments compared to Harley Davidson. Limitations to entry have been exemplified by businesses such as Polaris and Sucess who have attempted to enter the marketplace but continue to be at 2-3% of business.
Market Percentage
In United StatesUnits Sold
(in K units)Revenue (in M $)
Harley Davidson57%161$2, five-hundred
Honda17%48$744
Kawasaki9%25$587
Yamaha5%14$217
Other12%34$527
References
Autoevolution. (2013). Buell Brand History. Gathered from http://www.autoevolution.com/moto/buell/history/
Barrett, R. (August, 2010). Harley Davidson takes conquering on MV Agusta. Retrieved from http://www.jsonline.com/blogs/business/100759404.html
Company Spot light: Harley-Davidson Motor unit Company. (2006). MarketWatch: Global Round-up, 5(10), 14-19. Crowe, P. (November, 2009). Harley davidson Davidson and Buell ” Unfinished Organization. Retrieved coming from http://thekneeslider.com/harley-davidson-and-buell-unfinished-business/
DATAMONITOR: Harley-Davidson, Inc. (2011). Harley-Davidson, Inc. SWOT Analysis, 1-9.
Delmont, J. (2013). LEANING IN TO THE CURVE. Dealernews, 49(1), 20. Harley Davidson, Inc. (January, 2012). Harley Davidson Income, Retail
Motorcycle Revenue Shows Ongoing Strength. Retrieved from http://investor.harley davidson. com/phoenix. zhtml? c=87981&p=irol-newsarticle&ID=1651657
James W. Kelleher, 3rd there’s r. (2013, Summer 30). Harley-Davidson looks further than the aging white colored male. St Paul Pioneer Press (MN)
Meters. L. Manley The Linked, P. (2013, June 10). Stripped-down Harley-Davidson rebounds coming from recession. Charleston Gazette (WV). Motorcycle Daily (August, 2010). Victory Bike First Drive. Retrieved via http://www.motorcycledaily.com/2010/08/2011-victory-motorcycles-md-first-ride/ Motorcycle USA. (February, 2008). Triumph Motorcycle Record. Retrieved via http://www.motorcycle-usa.com/690/2587/Motorcycle-Article/Victory-Motorcycle-History.aspx
Muller, J. (2013). Return from the Indian. Forbes, 191(1), 36-38.
(2013, February 14). StockCall Examine on Polaris Industries and Harley-Davidson: Recreational Vehicle Companies Raise Dividends. PR Newswire Europe.
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