KTM is an on and off-road motorcycle manufacturing company that has established itself as a player in the European off-road industry with a 13% market share. The European motorcycle market in general has been in decline for the past three years and is forecasted to have even slower growth in the coming years. The off-road market in America, however, has much more potential than Europe because of its open spaces and the sport’s continued rise in popularity. Currently, the CFO of KTM is facing the challenge of achieving the growth needed to facilitate BC European Capital’s exit from its 49% stake in the company. While analysts favor a merger with Ducati, KTM executives also have the option of growing in-house. KTM should look to the growing off-road market as a means for growth in-house and should therefore avoid a merger with Ducati just as the company avoided a deal with Harley-Davidson because not enough synergies exist.
Technological innovation has opened the door for recreational riders to enjoy off-road riding without breaking their bank account. With a young and growing customer base, the off-road market is gaining increasing amounts of publicity through televised events like the X-Games. The sport is becoming more organized as clubs and organizations are forming around the country. Organization combined with technology contributes to the development and maintenance of riding trails in environmentally sustainable ways. Safety is always an important issue but is also addressed through organization with better instruction, safety equipment, and the marking of dangerous obstacles throughout trails.
Although some analysts doubt KTM’s prospects for growth, the company can sustain its current growth by focusing on the grow...
... middle of paper ...
...oducts. Customization will also be important, as it is not uncommon for riders to develop relationships with their sponsors to create a unique rider need. This is, in fact, how Honda differentiates itself in the European on-road market.
The CFO of KTM is faced with many options but capitalizing on the change in customer preferences in North America is the best course of action for KTM. In addition to financing KTM’s shift to the off-road market of North America, an IPO will allow the company to still take advantage of the 5.3% projected global demand for motorcycles for the next four years. Just because there is a focus on North America does not mean that the broad geographic dispersion of KTM dealers will be forgotten. In other words, KTM is doubling down on North America and will still have a moderate degree of dependence on other markets for cash flows.
The operator she take a training If one is properly equipped and following the laws than it should be a safe ride. But with anything there is risk involved so to resolve this are we going to take cars off the road because people keep running into each other or band motorcycles because if they get hit there chance of survival is very small. No we have allowed all these items on are public roads because people are willing to take the risk every time one gets in there car and turns the key they are taking a risk not just for them but the ones that share the road with ‘‘ATVs are dangerous motorcycles are dangerous cars can be very dangerous but using the vehicle in a safe manner and proper education and training on how to maneuver the machine and using right speeds is key’’(bowman) as you can see from the reasoning above ATVs can and should be legalized on public roads. they are a more convenient way to get around and tour the state.
Allstate insurance is the second largest property and casualty insurance company by premiums in the United States. Allstate insurance handles about 12% of the U.S home and auto insurance market. (Allstate, 2014). Many of Allstate’s customers fall under what one could refer to as a traditional selection of insurance for automobiles. Recently, Allstate has noticed a major shortcoming in lifestyle insurance, which includes coverage for motorcycles, boats, and other recreational vehicles, in comparison to its competitors. The motorcycle insurance sector is a 10.4 billion dollar industry and growing (PRWEB, 2012). The U.S. Department of Transportation website reports some astounding figures, including that 5,370,035 motorcycles were registered three years before the article, 7,138,476 motorcycles registered at the time of the article, and grew to 9,477,243 registered motorcycles at the end of 2012 (NHTSA, 2013). It is obvious as to why Allstate would identify motorcycle insurance as a worthy lifestyle product to devote marketing research dollars into in order to develop new strategies for cornering a share of the market.
External Opportunities • More people (94%) have new requirements for bicycles; the customers need bikes in different fields. • The popularity of Lance Armstrong has increased the interest on road bike, which represent 5% of the market. • The growing interest in cycling this is result in magazine coverage and the using of bikes and accessories in window displays that related to cycling.
Mr. Singleton and Montana Mountain Biking (MMB) could extend its marketing power through market affiliates. This report will outline the potential competitive advantage to MMB for partnering with industry sector affiliates.
Young males, and females are buying HD motorcycles over any other competitor. This thought was accomplished through the introduction of the VRSC’S, and the lower and narrow Sportsters, Dyna’s, Softail’s and positioning them in the market to a younger demographic. Secondly, HD needs to position the VRSC’S, Sporster, Dyna and Softail to also appeal to first time buyers of motorcycles.
The motorcycle industry offers products which can be viewed as luxuries or wants as opposed to necessities. When concerning Harley-Davidson, most motorcycle owners have purchased their bikes as a second vehicle, using them more during weekends and off-time instead of during the work week. This implies that the motorcycles serve for recreational purposes and thus are an item which can be expendable at times. This has hurt the industry recently with the slight recession the United States economy is facing. Another interesting thing to note about the motorcycle industry is the different appeal bikes carry in different global regions. In the United States for instance, Harley-Davidson has had much success because of the market trends and tastes people enjoy. Harley-Davidson has benefited from a U.S. market which enjoys casual and recreational riding. This isn’t necessarily the case overseas, as in Europe the trendy pick is a sleeker street bike, with a focus on speed and handling as opposed to power and comfort.
Through Dupont analysis, we have been able to see the specific strengths and weaknesses of BMW and Audi’s management. BMW’s lower profit margin and asset turnover indicate less efficient cost management and asset management. Their debt multiplier indicates that they’re taking advantage of debt, but the benefit of this isn’t realized because of their problems with cost and asset management. Due to Audi’s more efficient use of their assets, and better cost efficiency, it can be said that their management has performed better than BMW’s over the past year.
James, W. B., & Graham, B. (2004). Strategic change in the face of success? Harley-Davidson, Inc. Strategic Change, 13(4), 205.
"We fulfill dreams through the experience of motorcycling, by providing to motorcyclists and to the general public an expanding line of motorcycles and branded products and services in selected market segments."
Since going public in 2000, Krispy Kreme Doughnuts has posted strong growth in same-store sales each quarter, with a consistency that would make most competitors envious. According to the Krispy Kreme’s most recent quarter, which ended August 3, 2003, it posted an 11.3 percents rise in system wide same-store sales, including 15.6 percents growth at company operated units (Peters, 2003). From the financial report of second quarter in 2003, it could foretell there would be more earnings growth in the future as long as Krispy Kreme finds more new markets in which to launch doughnut shops. Its average weekly sales are in large determined by newly opened stores. This also demonstrates that the doughnuts specialist’s soaring results and rise to the top echelon of industry performers can be attributed to successful expansion.
Italian manufacturer Piaggio ranks as one of the world’s top four players in its core business. It has consolidated leadership in the European 2-wheeler market. Piaggio should not miscalculate its competitors. Competition in the industry is very powerful, not only nationally but internationally as well. This is due to two well-established companies in this sector which are the Japanese Yamaha and Honda. Yamaha and Honda strengths are their long-run experience in the sector and the high quality image of products. Due to participations to the motorcycle championships, these two companies constantly receive positive feedbacks to their efforts in researching for first class products. In the future, other kinds of competitors are expected to arise: Chinese companies whose ability to imitate and create similar products at highly competitive prices is getting more and more dangerous (Piaggio, 2008)
On the Ansoff matrix below is shown what growth strategies for new and existing products and markets can be used from the company.
Honda, like other automotive companies, also came to the conclusion of firming a joint venture. At the moment, Honda was already famous for motorcycles in UK, but it was less well known in terms of the automobiles. While Honda’s cars enjoyed reputation for good quality and durability, the import restrictions limited its success it the European market. However, the European market was essential for the company’s global expansion. With the joint venture, Honda could avoid the restrictions on the import quota by assembling cars locally, because these cars would be considered locally produced. Moreover, a local partner could assumedly offer a better insight of the market.
Honda- focused differentiation, medium pricing, breadth of product line is high. Strengths are quality, reliability, overall value, and styling.
The principle of Best Position entails improvement of Honda’s global competitiveness. For Honda and their suppliers to improve in global competitiveness, they need to have a plan. Modine and most U.S. firms need further development in the process of planning. Instead of