COURSE TITLE: STRATEGY FOR DECISION MAKING

RESEARCH TITLE: MACRO ENVIRONMENT ANALYSIS: PESTLE ANALYSIS ON HARLEY

DAVISDSON

LECTURER’S NAME: DR MICHELLE KILLIAN

STUDENT NAME: CHRIS-MADU AMARACHI

STUDENT NUMBER: 18209629

WORD COUNT: 2,500

A RESEARCH ON THE MACRO ENVIRONMENT ANALYSIS IN AN ORGANISATION, A

CASE STUDY ON THE PESTLE ANALYSIS OF HARLEY DAVIDSON MOTORCYCLE
INDUSTRY IN EUROPE
TABLE OF CONTENTS

1.0. INTRODUCTION TO HARLEY DAVIDSON

2.0. PESTLE ANALYSIS ON HARLEY DAVIDSON

3.0. COMPETITOR ANALYSIS

4.0. INDUSTRY TRENDS

5.0. CONCLUSION AND RECOMMENDATION

6.0. REFERENCES

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1.0. INTRODUCTION TO HARLEY DAVIDSON

Harley Davidson is one of the world’s largest motorcycle industries which is a US manufacturer with a
very large distribution network worldwide (Harley-Davidson, Inc. | Company Profile | Vault.com, 2020).
The company was founded by Walter Davidson, Arthur and William Harley in 1903 to build motorcycles
in a garage and since then has been able to sustain a very great brand image amongst other motorcycles
manufacturers in the industry [ CITATION Ric07 \l 1033 ]. In the bid to sell an attitude alongside its
prestigious brand name Harley Davidson offers six families used for Tours, Softail, Trike, H-D street,
Sportster and its Customer vehicle operations.

Harley Davidson Motorcycles

This research aims to through more light on the key macro environmental factors of Harley Davidson
motorcycles in Europe that have an impact to the business using the PESTLE analysis, while making a
competitive analysis and identifying the key business sector trends.

Source: professionalacademy.com
Compared to business environments the past, businesses have become more competitive as organisations
have started to pay close attention to the internal and external factors in its environment because they
definitely play an important role in its environment. A good example is the advent of the internet
technology, it’s very certain that most companies wouldn’t have seen this coming but it did and the

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companies that did not prepare for this had tough times adjusting to the development [ CITATION Mar15 \l
1033 ].
2.0. The Macro environment is classified into the following factors:
POLITICAL: These are the trends in the country in which have an impact on how the organisation will
shape their decisions and perform. Some of these trends might be identified as pressure gotten from the
Government, monetary policy which might have to do with tariffs and the likes. For businesses it will be
very wise to realise that the policies of the society will vary from country to country and they have to be
able to flexibly align their goals to suit the customers in the country they want to establish their company
in relation to the government [ CITATION Mar15 \l 1033 ].
ECONOMIC: In a country the economic situations are never certain and they cannot be fully determined
by a company but it’s very smart for organisations to carefully observe the economic environment and
make preparations for contingency plans. These economic variables also involve being able to analyse
what the consumer trends are, their buying behaviours and attitudes and this will enable the organisation
to minimise loss in future.[ CITATION Mar15 \l 1033 ].
SOCIAL: This involves analysing the demographic in the society, the different age groups that the
organisation will be catering to (old, young, middle aged), and their buying behaviours. Once an
organisation is able to understand the various type of individual categories they are dealing with they will
be able to sustain a competitive advantage in that industry because then they are able to understand all
what they need to improve on or how they need to buy the customers interest and then gain their loyalty.
For example different countries have customers with different needs due to the interest in the society. the
Germans and French people have a very high taste in Fashion, media and Romance therefore if
organisations do their research well and understand that these are the interest of the people they an
channel most of their goods and services to fit these categories of people.[ CITATION Mar15 \l 1033 ].
TECHNOLOGICAL: This consist of all the new and emerging innovations and technological trends
that take place from time to time that needs to be observed by organisations such as the advent of internet
and in the case of a given industry it will have to focus on the trend that relates to the industry itself
(Policy, 2016).
LEGAL: The legal and political factors are closely related and have to deal mostly with government
rules and regulations, patent laws and consumer protection rules.
ECOLOGICAL: this has to deal mostly with climate change considering the local, national and
international issues. A good example is the present epidemic which the world is facing on Corona virus
(COVID-19)

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HARLEY NATURE OF CHANGE POTENTIAL IMPACT ON OPPORT STRATEGIC
DAVIDSON CHANGE UNITY/T RESPONSE
P.E.S.T.L.E HREAT
ANALYSIS
POLITICA High rate of Tariff war Reduced flexibility in transaction Threat Build manufacturing
L between the United states of with European countries, the cost of plants in European
America the European Union the bike in EU countries will be countries
and this has to do with the higher than the original cost.
present Trump tenure Fattore
(2018).
ECONOMI Increased demands in the More demands for motorcycles in Opportunit Reduce the price a little bit
C motorcycle industry due to developing countries rather than y so that not just the high
economic development and vehicles as a result of low per capital class can afford but
purchasing power income compared to developed everyone who loves the
countries Pongthanaisawan and idea of motorcycles for
Sorapipatan (2010). luxury and transportation

SOCIAL 1.women Interest in riding 1.The efforts to attract women in as Opportunit 1. Use of advertisement
chopper bikes part of their target markets which is y strategies that will attract
rare in the motorcycle business woman and make
would be increased (Thompson, attractive motorcycles to
2020) suit women’s taste.

2. Be a friendlier brand
with introduction of
2. The hostile nature of the 2. Majority of outsiders’ unfriendly smaller and lighter bikes.
brand as rebellious and response to the brand. Threat
identified as
‘White men bikes’ that are
very huge and look
intimidating known as the
heavyweight bikes.
TECHNOL Introduction of electric Saves fuel , new market Opportunit Move with the trend and

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OGICAL motorcycles with the advent of opportunities y not be left out.
innovation
LEGAL The government in most Increase in cost of production due to Threat/opp Start researching on
Europe Unions have made use change or original designed ortunity alternative noise pollution
of Euro 4 in 2016 and are still motorcycles to suit the government Might solutions.
working on additional rules in rule and regulations. loose
2020 to restrict noise pollution customers
caused by motorcycle users due to high
Piasecki (2016). cost of
manufactur
ing and
also less
noise
pollution
which is
good.
ECOLOGIC Carbon emissions Not environmental friendly and Opportunit More environmentally
AL some customers too are interested in y if they friendly.
environmental products. reduce fuel
consumptio
n to attract
customers
that is
environme
ntally
friendly.
/threat if it
reduces the
attractivene
ss of the
motorcycle
s

3.0 COMPETITOR ANALYSIS

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Harley Davidson has two major competitors in the industry being Honda,Yamaha under the Japanese
manufactures . However what makes the organisation stand out is the level of brand recognition of which
they possess. It is made in America and the way its brands lifestyle is portrayed most people like to be
associated with the organisation. Also the organisation has its strength in the family lifestyle culture that
has been created which makes most families have a sense of belonging to the brand which is hard to take
away. Also the features of the bike such as the loud noise, heavy weight motorcycles is very intriguing to
its customers and makes it stands out. Regardless of this some features that might exist that make them
not to completely stand out in this industry are the fact that they have some difficulties extending to
countries such as china for example because their type of bikes do not suit the category of people in over
there who are more interested in light weight vehicles .
In terms of COMPARATIVE ADVANTAGE Harley Davidson might possess this in:

 Operating using premium strategy: they already have loyal customers that will patronise them
matter what their pries might be unlike Honda and Yamaha that have to offer low discounts and
very reasonable prices to be able to gain customers to buy as much as they do. That is to say
Harley has loyal customers.
 Satisfaction of customers: thought Honda and Yamaha believe in the value for money and
making reliable products , Harley is focused on knowing what their customers actually want and
they are aimed at making sure they are satisfied which is like every customers wish and this is
what sustains them competitively .

In terms of DISTINCTIVE ADVANTAGE Harley Davidson posses this in:

 Making their goal for customers to be nothing more than the thrilling feel and experience you get
when riding the bikes.
 Integrating the customers’ lifestyle and Harley Davidson lifestyle to become more of a family
lifestyle oriented organisation Agnihotri (2013).

4.0 INDUSTRY TRENDS

SOURCE: [ CITATION Luc13 \l 1033 ]

The motorcycle industry is a very competitive one with various key players as seen in the chart above in
2013, and as at 2019 the top three still shuffle between Harley Davidson, Honda and Yamaha. The

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industry has been segmented into various categories and it will be highlighted in the trends based on
Technology, Application and the Type of Motorcycles.
Talking about technology, we now have the electric and the non electric motorcycles and it is safe to say
that the non electric motorcycles are becoming the new trend because a lot of individuals have become
more environmentally aware and obviously are very elated with the idea of having to save fuel money and
the burning of fuel and still enjoy rides.
Referring to its applications, the initial idea of motorcycles being for transport is even not as trendy as the
new motorcycles been used for sport programs and for leisure. This new trend is becoming more popular
than the transport trends in the past years.
When we refer to the types, the industry now has geared and non-geared motorcycles and the trend for
both seems to be very consistent as there is high demand for both types in the industry.
Another significant trend that the industry has is the fact that the motorcycles produced by Honda and
Yamaha and other Japanese manufacturers majorly are known to be very reliable and of good quality,
which are also durable

5.0 CONCLUSION AND RECOMMENDATION

Harley Davidson is a very strong organisation with very high brand recognition; they have unique
features and it will be very great for the organisation to focus more on strategic plans and decisions to
make their products more unique by meeting the needs of everyone and every sector in the society
interested in riding motorcycles, I will also highly recommend that they carefully observe the trends of
their competitors in the industry, of producing highly reliable motorcycles of great quality and not just
motorcycles that end up experiencing issues after they have been purchased within a period of 3 years.
They should spend more time in making sure that as they meet the needs of their customers, they should
make sure it is of great quality. From research it was observed that in the previous year’s Harley
Davidson’s leadership skills within their organisation wasn’t the strongest and it will be wise if they
improve their communication skills within the organisation and the employees, knowing that they are the
first customers in the organisation and they also need to be satisfied to make sure the customers too are
satisfied. All this should be required in other for them to stay ahead in the motorcycle industry.

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REFERENCES

Agnihotri, A. (2013) ‘Turnaround of Harley Davidson–cult brand or strategic fit approach?’, Journal of
Strategic Marketing, 21(3), pp.292-301.

Fattore, C. (2018) ‘Why it doesn't matter if a Harley-Davidson is "Made in America’, CBS news, 6 July.
Available at: https://www.cbsnews.com/news/why-it-doesnt-matter-if-a-harley-davidson-is-made-in-
america/ [Accessed 20 October 2019].

Lucintel, 2013. Top Five Global Motorcycle Companies: Performance, Strategies, and Competitive
Analysis. Lucintel

Marmol, T. d. B. P. C., 2015. Understand and Plan for Your Business Environment. PESTLE Analysis.
Piasecki, C., (2016) Estimation of the effects of new emission standards on motorcycle emissions by
means of modelling. Transportation Research Procedia, 14, pp.3089-3099.

Policy, P., 2016. What is pestle analysis.

Richard L. Nolan, S. K., 2007. Harvad Business School. Harley-Davidson: Preparing for the Next
Century, 9(906-410), p. 2.
Thompson, A., 2020. Harley-Davidson PESTEL/PESTLE Analysis & Recommendations - Panmore
Institute.
Vault. 2020. Harley-Davidson, Inc. | Company Profile | Vault.Com.