Assignment 1: LASA 2 Strategic Plan and Self-Reflection Summary

The Analysis of H-D’s Current Strategy: Two Views

Hakim Callahan

Argosy University

Part I: The Analysis of H-D’s External Environment

Driving forces in the industry

One of the major driving forces in the motorcycle industry is the customer taste and preference. As time moves, the customers in the motorcycle industry have different preferences in terms of the kinds of products that they want. They demand motorbikes that are fuel-efficient and classy at the same time. They want to feel the comfort of riding a motorbike. This is a driving force that has caused most companies in the industry to adjust the strategy so as to achieve the customer demands (Jones, 2012).

Dynamics of competition

Different factors lead to the competition in the motorcycle industry. It is the responsibility of individual companies to make sure that they utilize the best strategies to deal with the existing competition. Basically, the ability of a business being competitive primarily depends on its strategies. Below is an analysis of the dynamics with respect to Porter’s Five Forces.

1. Industry competitors

This is a force of competition that originates from within the industry. Basically, the rivalry between competing firms. Companies such as Ducati and BMW are among the major competitors of Harley-Davidson in the U.S. market. They are part of the dynamics that shape the industry. When a business makes strategies to be successful in an industry, it has to pay attention to whatever strategies if competitors are using. This enables it to make the right decisions that will improve its competitiveness.

2. Suppliers

Supplies also affect the external environment in the motorcycle industry. The contributed was the competition because the different companies rely on them. It is noted that the quality of raw materials that supplies provide have a direct impact on the quality of the finished product that different companies sell to the market.

3. Buyers

Buyers are basically the customers in the industry (Jones, 2012). They are significant because they determine whether or not a company will be successful. For the purpose of competitiveness, it is important for businesses in the motorcycle industry to make sure that they attract and retain the buyers.

4. Potential entrants

This is a dynamic that is concerned with new businesses that might be interested to enter an existing industry. They will increase the competition in the industry because they provide more options for their customers. Busy break that existing businesses need to utilize the most effective strategies to discourage the new entrants.

5. Substitutes

Substitutes also have the capability of shaping the competition in the motorcycle industry. By providing similar products to what is already available, they give customers options to choose from. This implies that businesses might lose their customers to substitutes. Dealing with substitute involves providing high-quality products at affordable prices.

Statistics

1. Harley Davidson’s net income for 2017 was $521 million.

2. Comparing the company’s revenue to the third quarter, there was a 6.75% growth

3. In 2017, Harley Davidson sold 42,142 motorcycles

Issues and threats

One of the greatest threats to the motorcycle industry is the issue of substitute products. This lowers the market share of existing brands. It also threatens the quality by introducing substandard products.

Part II: The Analysis of H-D’s Current Strategy: Two Views

Balanced Score Card

Area	Key metric
Financial	Financial growth
Customer	Customer satisfaction
Internal business process	Efficiency and effectiveness
Learning and growth	Employee training

Ratio analysis (Current ratio)

	2013	2014	2015	2016	2017
Current Assets	3.99B	3.95B	3.98B	3.85B	3.88B
Current liabilities	2.51B	2.39B	2.75B	2.86B	3.16B
Current ratio	1.59	1.65	1.45	1.35	1.23

Over the past 5 years, the company’s average current ratio is 1.45 (Market Watch, 2018)

Interpretation

The company has good short-term strength in terms of financial growth. The company is performing better than the industry averages.

Competitor ratio analysis (BMW)

Values in EUR Millions

	2013	2014	2015	2016	2017
Current Assets	52,184	56,797	61,778	66,864	71,582
Current liabilities	51,134	59,078	65,591	67,989	69,047
Current ratio	1.02	0.96	0.94	0.98	1.04

Over the past 5 years, BMW has had an average current ratio of 0.93. (The Wall Street Journal, 2018)

This implies that the company is not able to effectively meet its current liabilities.

Harley Davidson’s is performing better than its competitor, BMW, in terms of financials.

References

Jones, P. (2012). Operations Management. Oxford: Oxford University Press.

Market Watch. (2018). Harley-Davidson Inc. Retrieved from https://www.marketwatch.com/investing/stock/hog/financials/balance-sheet

The Wall Street Journal. (2018). Bayerische Motoren Werke AG. Retrieved from https://quotes.wsj.com/XE/BMW/financials/annual/balance-sheet