Ktm Case Notes

BC European Capital owned 49% of company and would look for exit strat

Keys for off-road:

• flexibility in the marketing mix

• trends

• latest equipment

• strong dealer network: to two stroke vs harder to repair four strokepick up on trends and be quick to market

•

geographic trends:

• Pff road sales increase 18-18% in next three years

• European market sales to decrease

• Japanese market to decrease as well

• Asia = promising (no recreational use bikes though)

o Price competitive market

• Latin America = promising

o Growing middle class

o Popularity of motor sports

Competitiors

• Big 4

• Europe – BMW, Ducatii, and KTM, had international presence

• Off road = exhibit 2

• Product mixes = exhibit 3

• Highly diversified

• Financing available

Kawasaki

• Ninja

• Technology is high

• Deal w/ Suzuki

Suzuki

• Tech, youthful Japanese market

• No established biking community

Yamaha

• Design and racing technologies

• Cost efficient b/c of outsourcing

Honda

• Bike club

• Value added shit

• Safety

Internationalization

• Overall trend

• Usual – local sourcing R&D and production infrastructure

• Successful companies tended to be cost leaders, low margins and high volume

• Integrity of brand name

• Localization

KTM

• Off-road popularity = Sponsorship of cross country racing events

• Reliable, high quality = expertise on manufacturing core parts

• Went private again

KTM’s products

• Motocross and endure fastest growing sectors bc of short half-life

• Helped with sale of spare parts = 13% of revenue

• Unique design and engine

• Unique styling, great engineering

• Sold at premium

• Connection with dealers

• Spare parts good for KTM and Dealers

• Dealer Net

• Tailered to experienced user

Dealer network

• 80% thru own sales subsidiaries

• 20% general importers

• Relied heavily on importers

• Good with multi-line dealers

• Big and little sources. Little sources more intimate

Organizational structure

•

Operations:

• 50% of cost came from procurement of parts

Recommendations:

*Internationalize under a different name in popular markets (Latin America)

*localizationBC European Capital owned 49% of company and would look for exit strat

Keys for off-road:

• flexibility in the marketing mix

• trends

• latest equipment

• strong dealer network: to two stroke vs harder to repair four strokepick up on trends and be quick to market

•

geographic trends:

• Pff road sales increase 18-18% in next three years

• European market sales to decrease

• Japanese market to decrease as well

• Asia = promising (no recreational use bikes though)

o Price competitive market

• Latin America = promising

o Growing middle class

o Popularity of motor sports

Competitiors

• Big 4

• Europe – BMW, Ducatii, and KTM, had international presence

• Off road = exhibit 2

• Product mixes = exhibit 3

• Highly diversified

• Financing available

Kawasaki

• Ninja

• Technology is high

• Deal w/ Suzuki

Suzuki

• Tech, youthful Japanese market

• No established biking community

Yamaha

• Design and racing technologies

• Cost efficient b/c of outsourcing

Honda