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Strategic Alternatives Essay

1542 words - 6 pages

There are many ways in which Harley-Davidson can improve its operations, all of which can be found through conducting a thorough analysis of the strengths, weaknesses, opportunities, and threats the company is presently facing. The executives of Harley-Davidson considered the company’s internal strengths and weaknesses by completing an internal factor analysis summary (IFAS). Next, the external opportunities and threats were analyzed by completing an external factor analysis summary (EFAS). The analysis of these two summaries in turn produced the viable strategic alternatives outlined in the company’s strategic factor analysis summary (SFAS). The resources, capabilities and diverse leadership team of Harley-Davidson have provided the foundation for the company’s continuing ability to be both versatile in its product offerings as well as adaptive to consumer desires. The strategies of adjusting pricing, refocusing the company’s corporate culture and targeting a new consumer market will assist the company in fine tuning its operations over the next several years to ensure Harley-Davidson maintains its position as the leader in the motorcycle industry.
The first strategic alternative for Harley-Davidson (HD) to address is that of adjusting pricing. Throughout the years HD has been known for its ability to provide high quality motorcycles to its customers, however this quality comes at a high price. To those customers who are willing and able to pay HD’s higher price for quality the present pricing schedule is acceptable. Unfortunately, to those unable to pay this higher price HD’s motorcycles are unattainable. In order to increase HD’s sales, and consequently increase HD’s market share, an adjustment needs to be made to the present pricing schedule.
Many analysts believe that HD’s sales margins have peaked and will consequently fall in the near future as HD continues to face the pricing pressure from foreign motorcycle manufacturing competition. These analysts also believe that HD may lose some of its economies of scale as certain lines of motorcycles will have to be produced in lower quantities due to decreased demand. The issue HD is facing is the fact that consumers are price conscientious, as well as conscientious of quality and efficiency, something HD did not have to worry about in its early years. If HD met, or exceeded, its competitors pricing, quality, and efficiency they would be able to claim a larger portion of the lower budget market segment. The downside to decreasing prices, however, would be the consumers’ misconceived belief that HD would decrease the quality of its motorcycles in order to reduce its pricing schedule.
The second strategic alternative for HD to address is that of refocusing its employee’s activities to ensure they continue to align with the long-standing corporate culture. Urging employees to maintain their focus on HD’s culture will undoubtedly cause an increase in both quality and efficiency from the employees....

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