Analysis of Automobile and Motorcycle Manufacturers

Industry Analysis Automobile and Motorcycle Manufacturers

A select few companies throughout the history of American capitalism have become iconic figures that are synonymous with the products they sell, and the Harley-Davidson Motor Company has successfully accomplished this rare feat, engraining the moniker “Harley” in the global lexicon as the emblem of premium motorcycles. While today’s generation may consider Harley-Davidson to be a monolith without legitimate competition from domestic motorcycle manufacturers, a careful study of the company’s history demonstrates the wide array of difficulties which were encountered over more than a century of operation. Harley-Davidson emerged from the Great Depression as one of only two American motorcycle manufactures to maintain operations, despite experiencing significant struggles during this era of forced fiscal restraint. After weathering the first of several intra-industry storms and surviving the Great Depression, in under two decades Harley-Davidson had become the largest motorcycle manufacturer in the world, producing more than 28,189 vehicles and maintaining dealerships in 67 countries around the world. While it is true that Harley-Davidson dominated the motorcycle manufacturing market throughout the first half of the 20th century, an influx of cheap competition in the 1960s from Japanese companies like Suzuki, Honda and Yamaha threatened to push their American rival to the brink of bankruptcy. Only through a revolutionary adjustment to the company’s business model — premised on an internal design strategy based on direct customer feedback and the innovative use of test drives to entice potential buyers into making a final purchase — did Harley-Davidson reclaim its position of preeminence within the fiercely competitive motorcycle manufacturing industry.

By applying the Five Forces of Analysis model first pioneered by Harvard economist Michael Porter, who distinguished similar products from substitute products within his study of external market forces, to the case of Harley-Davidson, it is possible to illustrate in real-world terms how the company’s current market situation directly affects its ability to deliver the enhanced value propositions contained in its vision statement. The most effective vision statements used by successful companies typically consist of a clear, direct single-sentence statement of operational goals, a template encapsulated by Harley-Davidson’s vision statement: “Our key goal is to fulfill dreams through the experiences of motorcycling” (2013). By manufacturing affordable, high-quality motorcycles using American parts and labor, Harley-Davidson is also able to take advantage of the dominant value set of its core consumer demographic, as middle-aged males typically prefer their high-dollar purchases to be of products that are domestic in origin. The company also harnessed the power of nostalgia and patriotism, designing their motorcycles with an inherently “retro” and “American” appeal (Wagner, 2003) which aligned with its previously established industry as the quintessential domestic automobile manufacturer. The company immediately recognized the importance of so-called “do-it-yourself” consumers, and Harley-Davidson placed advertisements in the Automobile and Cycle Trade Journal to sell bare motors to enthusiasts. As early as 1907, Harley-Davidson recognized the importance of modern marketing techniques like product placement and branding, and the company equipped local police departments and the U.S. Army with Harleys for transportation in the field (2013).

As a pioneer in the emerging industry known as “car-sharing,” Zipcar is a company founded on the premise of combining technological innovation with environmental sustainability. By offering a viable “substitute for car ownership, especially for those who can commute to work and shopping by taking transit, walking or bicycling,” car-sharing has become an increasingly popular option for residents of urban areas and others who utilize automobiles at rate lower than the average. According to a car-sharing case study published by the Harvard Business Review, “Zipcar launched its first 10 locations in Boston in 2000 & #8230; (and) since 2004, Zipcar has experienced 100-percent-plus growth annually in its membership base,” (Hart, Roberts & Stevens, 2003), and this accelerated rate of growth is astounding for a company that was essentially proving that demand existed within this relatively new market. By demonstrating the viability of car-sharing, Zipcar quickly became “the world’s leading car sharing network with more than 750,000 members and more than 11,000 vehicles in urban areas and college campuses throughout the United States, Canada and the United Kingdom,” (Hart, Roberts & Stevens, 2003) attracting the attention of major transportation firms like Hertz, Enterprise, U-Haul and Daimler, all of which have recently entered the lucrative car-sharing market. By maintaining an aggressive strategy of sustainable growth, while also working in tandem with transit services and infrastructure providers, Zipcar was eventually acquired by Avis in a deal exceeding over $500 million.

Through his famed Five Forces of Analysis technique used to quantify industry and business practices, Porter differentiated between similar products and substitute products. Porter refers to substitute products as “those products that are available in other industries that meet an identical or similar need for the end user,” (2008) while a competitor’s similar products are simply different versions of the same merchandise. To analyze the presence of external forces like competition encountered by Zipcar, it would be informative to apply Porter’s Five Forces of Analysis model, because this framework is essential for reconciling the risks posed by external market conditions and internal strategic alignment. In 2000, when Zipcar was launched, the economic climate in America was at an all-time peak, gasoline prices were extremely affordable, and most families indulged in the culture of ownership by purchasing an additional vehicle, but despite the presence of these adverse external forces, the company managed to prove the concept of car-sharing was viable. Thirteen years later, after a devastating recession crippled the domestic economy, fuel costs have become prohibitive and many families cannot even afford to maintain a single vehicle. When the economic circumstances are combined with the environmental issues associated with fossil-fuel use, the external forces have shifted decidedly in favor of the car-sharing industry. Considering the favorable shift in external market forces described above, it stands to reason the car-sharing experiment will only continue to develop a foothold within the overall transportation industry. Americans have become increasingly budget-conscious, and with gas prices seemingly higher by the day, choosing to forego car ownership in favor of a more sustainable car-sharing program like Zipcar’s partnership with Avis provides has become an option worth considering. The potential challenges standing in the way of Zipcar’s dominance of the car-sharing market come from the presence of firms which consider Avis to be a chief rival, because these rental car titans can quickly and easily mount an effective effort at competitive balance.

Price elasticity of demand is a formula used to measure the relative increase or decrease in the quantity demanded of a product as it relates to changes in the price of the product, provided the remaining variables in the demand function are held constant. Establishing the most profitable price point for a product is central to assuring the economic viability of its continued production. The fact that “the price elasticity of demand measures the responsiveness of quantity demanded to changes in the price of the product itself, holding constant the values of all other variables in the demand function” (Hirschey, 2009) makes this a valuable predictive tool for financial analysts and executive management. Another interesting aspect of this crucial managerial economics concept is that the price elasticity of demand associated with a given commodity is dependent chiefly on the availability of substitutes, and also on the duration that the quantity response to the price change is calculated (Salvatore, 2012). Expanding the parameters of the demand curve can produce accurate calculations of the point price elasticity of demand across any range of time that financial records have been compiled. There is a wealth of evidence to suggest that the price elasticity of demand becomes a larger negative figure when a product’s price is increased, because the price sensitivity exerted by consumers typically grows when prices rise (Elci, 2012), which is why companies like Harley-Davidson and Zipcar must carefully consider the cost/benefit ratios of any potential change in established product price points. Even the most well designed and cleverly marketed product can be rejected by the market if an unsustainable price point is implemented, resulting in a wildly volatile price elasticity of demand. Conversely, when a strong sense of brand loyalty is firmly established among a subset of consumers — as is the case with Harley-Davidson riders — even the presence of several available substitutes will not alter this inelastic demand (Salvatore, 2006).

Because it is true that “in standard microeconomic theory, the concept used for assessing the strength of substitutes and complements is the cross elasticity of demand” (Hill & Jones, 2010), the availability of substitute and complementary products within the market exerts a strong affect on the elasticity of demand. The presence of comparable alternatives to an existing good provides consumers with alternatives in terms of pricing, which means an increased availability of alternatives results in a highly elastic market, one in which minor changes in relative pricing between competitors can produce drastic shifts in demand on the part of consumers (Baye, 2010). An example of this relationship would be the diverse market for motorcycles and automobiles, because with such a high availability of alternative products for consumers to select from, any meaningful change in price points will cause a collective shift to the most affordable alternative. Conversely, when a market is defined by its exclusivity or the relative lack of comparable alternatives to a niche product — as is the case with Zipcar — increases in price often produce minor decreases in demand due to the typical consumer’s preference for preferred brands. The exclusivity of the relatively new Zipcar sharing model results in a negative elasticity of demand, because with so few available substitutes to choose from, and the consumer’s overriding preference for this particular product, price increases do not result in significantly reduced demand. Sound managerial economic practice should take into account the substitution effect, which describes the “change in relative consumption that occurs as consumers substitute cheaper products for more expensive products” (Hirschey, 2009), because the availability of substitute goods is considered to be one of the three major influences on price elasticity.

References

Baye, M.R. (2010). Managerial economics and business strategy. 7th ed. New York:

McGraw-Hill/Irwin.

Elci, C. (2012). Managerial economics: Topic briefs. 3rd ed. London: London South Bank

“Harley-Davidson History Timeline.” (2013). Harley-Davidson Motorcycle Company.

Hart, M.M., Roberts, M.J., & Stevens, J.D. (2003). Zipcar: Refining the business model. Harvard Business Review, 9-803-096, 1-20. Retrieved from http://newentrepreneurship.files.wordpress.com/2012/01/zipcar-refining-the-business-

model.pdf

Hill, C.W.L., & Jones, G.R. (2010). Strategic management theory: an integrated approach.

Mason, OH, South-Western/Cengage Learning.

Hirschey, M. (2009). Managerial economics. 12th ed. Mason: South-Western College.

Porter, M.E. (2008). The five competitive forces that shape strategy. Harvard Business Review, 86(1), 78-93. Retrieved from http://hbr.org/2008/01/the-five-competitive-forces- that-shape-strategy/ar/1

Salvatore, D. (2006). Managerial economics in a global economy: Principles and worldwide applications. 6th ed. New York: Oxford University Press.

Salvatore, D. (2012). Managerial economics in a global economy. 7th ed. New York:

Oxford University Press. ISBN?13: 978″0″19″981178″6.

Wagner, H. (2003). At the creation: myth, reality, and the origin of the Harley-

Davidson Motorcycle, 1901-1909. Wisconsin Historical Society.

---

Get Professional Assignment Help Cheaply

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

• Plagiarism free papers
• Timely delivery
• Any deadline
• Skilled, Experienced Native English Writers
• Subject-relevant academic writer
• Adherence to paper instructions
• Ability to tackle bulk assignments
• Reasonable prices
• 24/7 Customer Support
• Get superb grades consistently

 

Online Academic Help With Different Subjects

Literature

Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.

Finance

Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!

Psychology

While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.

Engineering

Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.

Nursing

In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.

Sociology

Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.

Business

We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!

Statistics

We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.

Law

Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor’s, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

• When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
• We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

• The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
• We will have a different writer write the paper from scratch.
• Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

---

The post Analysis of Automobile and Motorcycle Manufacturers appeared first on Grade Birdie.