Harley Davidson
I. Uncertainties that may affect industry structure &
II. The plausible assumptions about each important causal factor
The uncertainties that exist for the Motorcycle Industry are fluctuations in the following categories: government regulations, price of supplies, Fuel Cost, Global Demand for motorcycles, Product innovation, customer loyalty value (CLV), target market, and market share.
The casual factors that drive these uncertainties are an important factor when forecasting the future of the Motorcycle Industry. The most likely scenario for government regulations will push the industry towards going “Green” and becoming more environmentally friendly by requiring lower emissions. They will require the industry to improve these emissions standards. Currently the average motorcycle averages 40 MPG (miles per gallon) in the city and 50 MPG on highway but they still emit smog into the environment. The industry will most likely use the fuel consumption statistics to their advantage by relating to the current price of gasoline and the fact that the average car gets 20 MPG and SUV’s get even less at about 16 MPG.
Price will be a major uncertainty for the industry. The industry relies on other companies to provide them with materials so that they could assemble the bike. The increasing cost of transporting these materials from the manufacturers to the motorcycle assembly plants are going to increase and therefore lead to increase in the operating cost for the industry and lead to higher price for the finished product resulting in no value added. The price of the finished product is a very important factor for the industry because all the players in the industry are trying to attract the younger target market and are competing on price. The Japanese manufacturers have a mindset that they are willing to incur short-term loss so that they could gain market share. This strategy is bad for the industry because every...
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