KTM Strategies for Growth
Q1. Compare and contrast KTM’s growth direction alternatives regarding new geographies?
KTM’s growth direction alternatives
ktm case study solution
The global economyhas experienced a tilt towards the masses since the mass production, industrial revolution made the European and American markets own major production businesses throughout the world. A significant change is occurring in the 21st century, particularly the global industry is beginning to be dominated by the Asian densely populated countries including the giants like China and India. Primarily because of the availability of competitive and rather cheaper equivalent services and cost of production throughout the world. The consequence of which lead to increase in the per capita income of developing Asiancountries, includingIndia, where their masses now have higher income per capita and disposable incometo spend than ever before.
The KTM’s attractive growth potential also exists in these emerging markets, where more and more people are being employed and require cheaper means of transportation. Data at hand also suggests that the North American market will also be one of the attractions for KTM’s growth. As the indicators are exhibiting around growth of 10% in the revenues that will further expand to 20% in the next upcoming years. In the American region similar to the North America, Latin markets also show significant signs of growth for KTM’s offering, so KTM can also yield synergies while operating in the American continent; not relying and restricting solely to the North American market.
European and Japanese markets are experiencing a decline because of intense competition, rooting primarily because of their native giants operating in those regions. These markets indicate that sooner or later KTM has to decide to specialize in a small niches, which are difficult for the competitors to imitate to save and retain the off-road market share.
Q2. Compare and contrast KTM’s growth direction alternatives regarding new products and new businesses.
Meanwhile, the multitudes are exhibiting significant growth in Asia, more specifically in China and India, followed by the North American and Latin markets in the American continent, this growth cannot be achieved and prove useful for KTM as its offering are not relevant enough that are in demand in these attractive locations. For availing growth and expansion KTM has to position itself as a low-priced and competitive producer in these regions. Relying solely on sports, along with, off-road offerings will not be a beneficial option in these developing countries; where a gigantic portion of the population are not engaging in vehicle-based sporting activities or Motorsports. However, these markets exhibit minor increase in Motorsports as well, but real progression that can be availed will be strictly subjected to the divergence of KTM’s offering tailor made for the masses. This idea can be achieved by KTM by introducing a new product line that offers a competitive on road, city driven, two-wheeled motorcycle and with the addition of highway or broad way or motorway cruisers as well. These new product line expansions can significantly reposition KTM in the minds of the customers in these mass markets as a vehicle manufacturer or manufacturer having intense Motorsport heritage and pedigree. It will further influence on the occasional and infrequent motorcycle enthusiasts, which can itself be a vast market to indulge, same is the case for investing in big engines or long range cruiser as well.
Consequently, if we analyze this situation on the basis of the Ansoff matrix structure we can segment the planning of KTM’s development on two bases, firstly on the product basis and then on the market basis. Starting off with the products, since KTM’s is a producer that is known as a Motorsportassociative, the positioning that is enjoyed by KTM will not be beneficial if they want to capture the upcoming growth patterns and trends. KTM requires significant expansion in their on road offerings as there is no such thing as “a cost competitive, Motorsport vehicle”, this phenomenon is an oxymoron since if an individual wants to enjoy Motorsports he has to spend largely as compared to routine commuters. So to sell to the masses KTM should look into producing the cruisers, tourists, and commuters by mating their existing refine a series of relatively smaller engines, suggesting that there is a need forproduct development in the current scenario that KTM is facing. Furthermore, the need for KTM is that it needs to expand into new geographic markets as well, from where the KTM can cater the needs of the masses which is considered as the market development or market expansion. In fact the product development, in addition to the market development/extension, sums up as the diversification strategy which is deemed to be the riskiest strategy as suggested by the Ansoff matrix framework. But in actual the global trends are not showing a healthysign for KTM. Continuing the current approach by making timely changes might also lead to the demise of the company’s business itself as not necessarily the broader environment will always remain favorable for the company.....................
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