1. Presented by Team Three

2. Agenda Company overview and timeline Analysis
Industry overview and external analysis
Internal analysis and core competencies
Business level strategy
Decision Making
Issue Identification
Strategy Formulation
Strategy Implementation

3. Company Overview
Segments: ORV/Snowmobiles, Motorcycles and Global Adjacent Markets
Company Overview
External Analysis
Internal Analysis
Issues

4. Company Timeline Company founded, repairing farm machinery Growth
Increase of 42.8% to $638 million
Victory Motorcycle line introduced
Founded early snowmobile
Started manufacturing ATV’S
1945
1955
1984
1998
Company Overview
External Analysis
Internal Analysis
Issues

5. External Analysis Company Overview External Analysis Internal Analysis
Issues

6. Demographic Economic Technological General Environment
Technology
Keep up with latest technology advances (motorcycle parts & performance characteristics)
Failure to do so can result in poor-quality
Focus on implementation of new technology that can lower operating expenses & increase efficiency
New technology has helped domestic producers maintain edge against low-cost foreign competitors
New technology = computer-aided design & manufacturing and numerically controlled machine tools
More accurate than manually controlled technology, more cost effective than labor
Many companies are using robots
Management and staff are performing detailed and timely cost analysis of production by product and facility
Economy
Revenues grow at same rate as economy, cyclical product
Economies of Scope
Manufacture multiple products or product lines  increase efficiency and profit margins
Smaller operations are likely to struggle long term
Price plays important factor in determining demand and industry competitiveness
Demographics
Older men (Avg. age = 48 yrs old)
Retired
Rebels, “Hard Ass” appearance
Middle Class (Avg. Income ~$85,300)
Familiar with motorcycles
Company Overview
External Analysis
Internal Analysis
Issues

7. The Competition: Company Overview External Analysis Internal Analysis
Issues

8. Unattractive Industry Overview
The industry is mature and competition is high. Demand correlates with disposable income of consumers.
Bargaining Power of Suppliers
Threat of New Entrants
Threat of Substitutes
HIGH RIVALRY
Threat of New Substitutes (HIGH)
Multiple other bike brands if customers do not want Victory
Also many other means of transportation besides motorcycles (cars, trains, buses, planes, etc.)
Threat of New Entrants (HIGH)
Need to establish brand recognition, high sources of capital, and distribution channels available
Larger companies buying out smaller companies
IBISWorld estimates in 2016, the top 3 companies in the industry will make up 70.5% of total industry revenue
Harley Davidson  58.9% market share
Polaris  10.2% market share
Bargaining Power of Buyers (MIDDLE)
High for customers since there are so many different motorcycle companies to choose from
Number of American made motorcycles is low for “American Only” buyers  good for Polaris
Bargaining Power of Suppliers (LOW)
Polaris is capable of producing their own materials
Only few small parts are imported from other companies
Intensity of Rivalry Among Competitors (VERY HIGH)
Everyone is fighting to become first movers in the industry
Strategies implemented by one company and improvements in technology used are soon to be copied by competitors
Bargaining Power of Buyers
Unattractive
Company Overview
External Analysis
Internal Analysis
Issues

9. Industry Overview
The industry is unattractive, therefore it would be difficult for a new entrant to enter this market.
Company Overview
External Analysis
Internal Analysis
Issues

10. Internal Analysis Company Overview External Analysis Internal Analysis
Issues

11. Tangible Intangible Resources Financial Management Manufacturing
Technology
Intangible
Ideation/Innovation
Relationships
Reputation
Company Overview
External Analysis
Internal Analysis
Issues

12. Capabilities Capabilities Value? Rare? Hard to Imitate?
Hard to Substitute?
Core Competancy
Marketing: promotion of brand N
In-house Manufacturing
Ideation/
Innovation
Relationships/
Partnerships
Distribution
Financial Management

13. Capabilities Capabilities Value? Rare? Hard to Imitate?
Hard to Substitute?
Core Competancy
Marketing: promotion of brand N
In-house Manufacturing Y
Ideation/
Innovation
Relationships/
Partnerships
Distribution
Financial Management

14. Capabilities Capabilities Value? Rare? Hard to Imitate?
Hard to Substitute?
Core Competancy
Marketing: promotion of brand N
In-house Manufacturing Y
Ideation/
Innovation
Relationships/
Partnerships
Distribution
Financial Management

15. Capabilities Capabilities Value? Rare? Hard to Imitate?
Hard to Substitute?
Core Competancy
Marketing: promotion of brand N
In-house Manufacturing Y
Ideation/
Innovation
Relationships/
Partnerships
Distribution
Financial Management

16. Capabilities Capabilities Value? Rare? Hard to Imitate?
Hard to Substitute?
Core Competancy
Marketing: promotion of brand N
In-house Manufacturing Y
Ideation/
Innovation
Relationships/
Partnerships
Distribution
Financial Management

17. Capabilities Capabilities Value? Rare? Hard to Imitate?
Hard to Substitute?
Core Competancy
Marketing: promotion of brand N
In-house Manufacturing Y
Ideation/
Innovation
Relationships/
Partnerships
Distribution
Financial Management

18. Capabilities Capabilities Value? Rare? Hard to Imitate?
Hard to Substitute?
Core Competancy
Marketing: promotion of brand N
In-house Manufacturing Y
Ideation/
Innovation
Relationships/
Partnerships
Distribution
Financial Management

19. Capabilities Capabilities Value? Rare? Hard to Imitate?
Hard to Substitute?
Core Competancy
Marketing: promotion of brand N
In-house Manufacturing Y
Ideation/
Innovation
Relationships/
Partnerships
Distribution
Financial Management

20. Business-Level Strategy
Lowest Cost
Distinctiveness
Broad Market
Have some evidence in facts to back up your claims in the chart. ?
Narrow Market Segment(s)

21. Issue Identification Company Overview External Analysis
Internal Analysis
Issues

22. Identifying the Issues
2. Behind Emerging Technology Curve
1. Unclear Business-Level Strategy
Company Overview
External Analysis
Internal Analysis
Issues

23. Issue #1: Unclear Business-Level Strategy
Company Overview
External Analysis
Internal Analysis
Issues

24. Issue #1: Unclear Business-Level Strategy
No Niche Market
Current target demographic is already saturated.
No “face” behind the brand name.
Lack of research to further the brand.
Company Overview
External Analysis
Internal Analysis
Issues

25. Our strategy is to change the target demographic to a less saturated, but growing market: young professionals.
Lowest Cost
Distinctiveness
Broad Market
Narrow Market Segment(s)

26. Why young professionals?
Customer Profile:
Aged 25-39
Lives in an urban area
Has a steady job
Mid-level income
New Demographic: “Our customer is the modern-day young professional with a cool, confident, and accomplished attitude.”
Company Overview
External Analysis
Internal Analysis
Issues

27. Tactics
Tactic #1: Create a celebrity partnership- commercial advertising
Michael Phelps: All-American, confident, victorious
Estimated Cost: $5 million for 10 Commercials
Stress Victorious…………
Commercial with
Lincoln- best year since 2008
Benchmark:
Matthew McConaughey and Lincoln Commercials
Lincoln sales increased 15.6%
*See Appendix A
16.7%
Company Overview
External Analysis
Internal Analysis
Issues

28. Tactics Tactic #2: Create a stronger exclusive loyalty program
Will allow Victory to create brand loyalty with younger customers that will stay with them for a lifetime
As Appendix C shows, implementing this tactic will lead to 6,492 new club loyalty members for the year
Harley Owners Group
Honda Gold Wing Road Riders
Yamaha Owners Club
Suzuki Owners Club
Victory Motorcycle Club
# of Members
900,000
75,000
38,000
26,000
11,000
Founded
1983
1977
1996
1982
1998
Brand loyalty, demographic will be younger and stay with us for a lifetime, and pass on from generations
Signed up on website, nonexclusive, my “thanks” was free desktop backgrounds
Imperative that we up the growth of victory motorcycle club
Company Overview
External Analysis
Internal Analysis
Issues

29. Tactics Tactic #2: Motorcycle Victory Tour Victory Competitor
*See Appendix B
Victory
Competitor
Average Length
3 days
7-9 days
Average Cost
$378
$570
Cincinnati Victory Lap Tour
Has 5 stops: Cincinnati, Louisville, Nashville, Knoxville, Lexington
Exclusive deals with hotels/restaurants in Nashville, TN, attractive to our demographic
Total trip time: 7 hours 30 mins
Average tour cost:
Company Overview
External Analysis
Internal Analysis
Issues

30. Issue #2: Behind Emerging Technology Curve

31. Issue #2: Behind Emerging Technology Curve
Efficient electric motorcycles are considered a key in the future of the industry
Currently getting beat to the market by companies such as Zero Motorcycles
The electric vehicle industry is emerging globally in countries such as China and India
Our strategy is to capitalize on growth in the electric vehicle market
Company Overview
External Analysis
Internal Analysis
Issues

32. Harley Davidson Livewire
Tactics
Tactic #1: Beat Harley Davidson “Live-Wire” to the market
In a recent Sustainable Business Council Meeting, Harley’s COO Matt Levatich stated that the “Live-Wire” would cost $50,000 if released today
Beating Harley’s “Live-Wire” would give Victory a first mover advantage
Victory Empulse
Harley Davidson Livewire
Cost
$20,000
$50,000
Current Market Share
10.2%
58.9%
Projected Sales (100,000) Sample
$204,000,000
$2,945,000
Adjusted Market Share
30%
Adjusted Sales
$600,000,000
($1,500,000,000)
ROI
$396,000,000
($1,445,000,000)
% Increase
294%
-49%
Company Overview
External Analysis
Internal Analysis
Issues

33. Tactics Tactic #2: Form a strategic partnership with Tesla
Benefits for Polaris
Allows them to attach name to Tesla’s innovation
Access to Tesla’s technology in vehicle efficiency
Benefits for Tesla
Gives them opportunity to gain stake in motorcycles
Continue track record of effective strategic alliances
Company Overview
External Analysis
Internal Analysis
Issues

34. Thank You!

35. Appendix

36. Appendix A- Michael Phelps Benchmark
Company
Revenue Increase
Weight
Lincoln
15.6%
50%
Speedo
11%
25%
Under Armor
Projection: 16.7%

37. Appendix B- Tour Cost Breakdown
Victory Motorcycle Tour Expenses
Gas
$35.58
Food
$72.00
Accommodation
$202
Motorcycle potential maintenance
$39
Miscellaneous
$30.00
Total
$378.58

38. Appendix C- Objections
How will implement loyalty program?
647 mill * 16.7%
How many people do you think you will add by “X” date?
108 mill
How will that drive up your sales?
6,492 year