External Analysis of the Motorcycle Industry

You are going to cover quite a bit of ground in this Case Assignment because you are tasked with considering what might be included in a PEST and Porter's 5 Forces analysis of Harley-Davidson's external environment.

Before you start to write (though you might want to take some notes), spend some time considering what might go into such a PEST analysis and also consider what a strategic manager at H-D might include in a Porter's 5 Forces analysis in considering this organization's external environment.

Some of the more interesting things happening in H-D's world right now from a competition perspective includes the introduction/re-introduction of two competing motorcycle companies in past years that can also make the claim of being "American Made." These include "Victory" and "Indian" motorcycles. In addition, most of the foreign competition has entered into the heavy-weight motorcycle market. There are also some concerns nowadays regarding the world economy, and the hefty price-tag that typically accompanies an H-D motorcycle, though H-D tends to rely heavily on a socially based mystique regarding their product line. They have also invested significantly from a technological perspective in relation to logistics and production management efforts. There are also a lot of potential 'substitute' products that one might consider as an alternative to riding a motorcycle (depending on the reason for purchasing the motorcycle, be it gas economy, or something exhilarating to do on a warm, sunny weekend).

Based on this information and your background readings, discuss whether you think PEST analysis and Porter's 5 Forces analysis would be useful tools for H-D executives to help them make wise strategic choices. Give examples to support your arguments and above all, demonstrate that you have a strong grasp of how these analytical tools are used and applied in the strategic management process.

Pay special attention to the following case study related to H-D's efforts to expand their operations and sales overseas. This effort obviously ties into the discussion on the external environment.