Assignment 2: Harley-Davidson: External and Internal Analysis
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BUS499Module2Assignment2.pptxModule 2 Assignment 2
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Use the Text
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Check the Announcements and the Module 2 Assignment 1 discussion thread for additional information and tips
Assignment directions
Apply concepts and theories from the assigned reading; use unbiased sources; do not restate – analyze and explain
Assignment Directions
This assignment has you complete two parts of a strategic business plan.
To see how those parts fit into a full business plan, see the outline in the link for a strategic business plan outline in the assignment directions or under Doc Sharing and Module 2.
This paper has 3 Parts. The first 2 parts are based on your internal and external analysis (see next slide). The 3rd part includes your analysis of competitors.
Part 1: External Environment Analysis
Part 2: Internal Environmental Analysis
Part 3: Competitor Analysis
Assignment
Part 1: External Analysis
Identify driving forces in the industry
Analyze the dynamics of competition using Porter's Five Forces Model
Part 2 Internal Environment Analysis: Finance
Create a Balanced Scorecard
Conduct a Ratio Analysis based on Harley Davidson’s five-year financial performance
Part 2 Internal Environment Analysis: Competitors
Describe 2 Main Competitors and perform Ratio Analysis
Describe trends in financial performance over five years, and compare the trends to industry averages of the 2 competitors.
Provide statistics on the size of the Motorcycle Industry (revenue, growth rate, number of units sold by manufacturer/country, etc. )
Summarize issues and threats
Address metrics and measures for Financial ; Customer; Internal Business Process; Learning and Growth
Part I – Analysis of the External Environment
As part of the Strategic Business Plan, you have been asked to:
Identify and analyze the major driving forces for change in the external environment of the motorcycle industry.
Analyze the dynamics of competition using Porter's Five Forces Model of Competition.
Correctly assess the dynamics of competition.
Provide at least three statistics about the size of the motorcycle industry such as revenue, growth rate, number of units sold by manufacturer/country, etc.
Summarize the strategic issues firms in this industry face and identify their biggest threats.
Content Information to use as a research and analysis Guide
I. Industry and Competitive Analysis
Questions
involved
What are the boundaries of the industry?
2. What is the structure of the industry?
3. Which firms are our competitors?
4. What are the major determinants of
competition?
Three stages in Porters external analysis
Analyze industry structure
How concentrated is it?
What are the dynamics
Analyze the industry
Are there powerful buyers?
Are there powerful suppliers?
Analyze its long term viability
Will more firms enter?
Will substitute products or services be found?
Section 2 up to barriers to entry
The Firm’s External Environment
THE FIRM
Operating Environment (Global and Domestic)
Competitors
Labor
Suppliers
Customers
Industry Environment (Global and Domestic)
Entry barriers
Supplier power
Buyer power
Substitute availability
Competitive
rivalry
Creditors
Remote Environment (Global and Domestic)
Economic
Social
Political
Technological
Ecological
External Environmental Analysis
A continuous process which includes
Scanning: Identifying early signals of environmental changes and trends
Monitoring: Detecting meaning through ongoing observations of environmental changes and trends
Forecasting: Developing projections of anticipated outcomes based on monitored changes and trends
Assessing: Determining the timing and importance of environmental changes and trends for firms’ strategies and their management
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External Environmental Analysis
Strategic Intent
Strategic Mission
The External
Environment
Analysis of macro/general environment
Analysis of task environment
Analysis of competitor environment
The External
Environment
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Motorcycle Industry
What are the major driving forces in this industry?
Who are the customers? What are they like?
Who care the competitors?
What is the environment like?
Is this organization stable in the uncertainty of the market?
The external review should address the “Big Picture Level” and “The Industry Level.”
Big Picture Level
Economic trends
Political
Society/environmental/ consumer
International
Industry Level
Competition
Technology
Demand patterns
Supply and suppliers
Industrial relations
Skills
External Analysis
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AN ORGANIZATION’S ENVIRONMENT
Industry Sector
Competitors,
Industry size and Characteristics, Related Industries
Raw Materials Sector
Suppliers, Manufacturers, Real Estate
Human Resources Sector
Labor Market, Employment Agencies, Universities, Training Schools, Employees in Other Companies, Unionization
Financial Resources Sector
Stock Markets, Banks,
Savings and Loans,
Private Investors
Market Sector
Customers, Clients, Potential Users of Products and Services
Technology Sector
Techniques of Production, Science, Research Centers, Automation, New Materials
Economic Conditions Sector
Recession, Unemployment Rate, Inflation rate, Rate of Investment, Economics, Growth
Government Sector
City, State, Federal Laws and Regulations, Taxes, Services, Court System, Political Processes
Socio-Cultural sector
Age, Values, Beliefs, Education, Religion, Work Ethic, Urban vs. Rural, Birth Rate
ORGANIZATION
DOMAIN
Task Environment
Macro Environment
Porter’s Five forces model
SUPPLIERS
BUYERS
POTENTIAL
ENTRANTS
SUBSTITUTES
INDUSTRY COMPETITORS
Rivalry among existing firms
1.
Threat of new entrants
3a.
Threat of substitute new products or services
3b.
Bargaining power
of buyers
2b.
Bargaining power
of suppliers
2a.
Porter (1980)
Interpreting Environmental Factors
Environmental Scan
Opportunities?
Threats?
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Assignment Outline
Outline for Part 1
Analysis of the External Environment (This section should be titled "The Analysis of H-D's External Environment.“)
Competitive Environment
Porter’s Five Forces Model
Dynamics of Competition/ Competitor Analysis
Statistics on the size of the Motorcycle Industry (revenue, growth rate, number of units sold by manufacturer/country, etc. )
Strategic Challenges/ Issues facing the Industry
Summary of External Analysis
Part II – Internal Environment Analysis
Financial
Gather the financial information necessary to do a complete ratio analysis and the Balance Score Card (BSC) key metrics information.
If you were going to create a BSC, what would be the key metrics you would measure in each of the four BSC areas:
Financial
Customer
Internal Business Process
Learning and Growth
Perform a ratio analysis using H-D's five-year financial performance.
Interpret the meaning of the ratios and financial performance.
Balanced Scorecard
Use the balanced scorecard or another similar tool to recommend indicators and measurements that will tell you if the company is successful or unsuccessful in progressing toward your vision through execution of strategy.
A balanced scorecard presents organizational performance on four primary groups of measures:
Financial
Customer (external stakeholder)
Learning and growth
Internal process
Considerations
The customer's perspective. Managers must know if their organization is satisfying customer needs. They must determine the answer to the question, How do customers see us?
The internal business perspective. Managers need to focus on those critical internal operations that enable them to satisfy customer needs. They must answer the question, What must we excel at?
The innovation and learning perspective. An organization's ability to innovate, improve, and learn ties directly to its value as an organization. Managers must answer the question, Can we continue to improve and create value for our services?
The financial perspective. In the private sector, these measures have typically focused on profit and market share.
Financial
Internal
Business
Process
Customer
Learning
and Growth
Vision and
Strategy
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Balanced Scorecard
Outline Part 2
2. Internal Environment Analysis (The Analysis of H-D's Current Strategy: Two Views." )
Balanced scorecard
Financial
Customer
Internal Business Process
Learning and Growth
Financial Ratio Analysis/ Five year period
Summary of Internal Analysis
Part II – Internal Environment Analysis: Competitors
Based on your analysis, you must decide which two competitors present the biggest competitive threat to H-D.
Perform a financial ratio analysis for the competitors after looking at trends in financial performance over five years, and compare the trends to industry averages.
Be sure you have a clear ranking of the industries' competitors.
Outline for Competitor Analysis
This section should be titled "Competitor Analysis." Be sure to include the financial ratio analysis. You may also include other graphics to support your narrative.
Competitors
Trends
Industry Averages
Rank order of competitor
Competitor 1
Trends in financial performance over five years
compare the trends to industry averages.
Competitor 2
Trends in financial performance over five years
compare the trends to industry averages.
Summary of competition
Competitive Analysis Comes Out of Customer Analysis
Understand customers needs and wants
Identify current and potential competitors
Perform industry analysis, identify suppliers and common intermediaries
Understand your competitors
Determine competitor strategies (present and future)
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Forces Driving Industry Competition
Suppliers
Substitutes
Industry Competitors
Rivalry Among
Existing Firms
New
Entrants
Buyers
Bargaining power
of suppliers
Threat of substitute
products or services
Bargaining power
of buyers
Threat of new entrants
Variables in Identifying Competitors
How do other firms define the scope of their market?
The more similar the definitions of firms, the more likely the firms will view each other as competitors
How similar are the benefits the customers derive from the products and services other firms offer?
The more similar the benefits, the higher the level of substitutability between them
How committed are other firms to the industry?
To size up commitment of potential competitors to industry, reliable intelligence data are needed concerning potential resource commitments
