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Harley-Davidson Porter's 5 Forces

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Harley-Davidson Porter's 5 Forces

Porter's 5 Forces

Threat of New Entrants: Low

Like any automobiles, Harley-Davidson's industry requires large manufacturing facilities and equipments to enter. New Entrants would have to have a large amount of capital is start in this industry. Already established firms such as Harley-Davidson, Honda, Suzuki, Kawasaki, Yamaha, and Ducati have the advantage of brand recognition from all over the world. These companies also established customer loyalty, especially Harley-Davidson. This means that any new entrants trying to enter the industry have to spend tons of money in advertising and promotion to receive the same amount of brand recognition and customer loyalty that these powerhouse companies in this industry already have gained. With the lack of brand recognition and customer loyalty, retailers would be afraid to carry such product because of the risk it carries if it doesn't give you profit.

Threat of Substitutes: Low

Motorcycles are seen as leisure products and don't take much out of one's income. Some substitute items for a motorcycle is a motor scooter and dirt bikes. Customers will switch to the substitutes if price increases and purchasing a cheaper substitute will be the better choice. However, give the fact that Harley-Davidson has a strong image of a lifestyle, the substitute products are no match to Harley-Davidson products. This will sway customers from buying substitutes because it is just not the same.

Bargaining Power of Buyer: High

Satisfying customer's needs are really important when it comes to Harley-Davidson. Harley-Davidson thrives in their customer loyalty and makes most of their profits off their current Harley-Davidson riders by offering them better products than the ones they own currently. Despite having customer loyalty, pricing will always be somewhat of a factor. Other Japanese manufacturers, such as Honda and Suzuki, offer a cheaper price than Harley-Davidson. Harley-Davidson has differentiated their products from Japanese product lines but price will always be a factor when purchasing a motorcycle.

Bargaining Power of Supplier: Low

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