Background of Situation Thorr Motorcycles is a company that manufactures 200,000 motorcycles a year. It also licenses T-shirts, shoes, leather goods, toys, and other consumer items. The company currently has a high-brand image manufacturing high-end motorcycles and owns approximately forty percent of market share. The challenge for Thorr is that the industry is growing, but sales of its high-end product are decreasing. The reason for this loss of market share is that the target customers of its high end product is growing older, and younger people do not identify with the brand image of Thorr. In addition, Thorr is a high product and younger people do not have the large disposable income necessary to support the brand. Recommended Solutions, Rationale, and Results The first step in the simulation is to determine the market position of The Cruiser Thorr using a perceptual map. There are four parameters that must be selected in the simulation, and I chose Lifestyle Image, Product Design and Styling, Price, and Product Uniqueness. According to the simulation, "A large polygon depicts a large market share." Apparently, the size of the polygon is irrelevant because the most accurate choices were lifestyle image, service offerings, quality engineering, and price. My logic is the larger the polygon the bigger the market share. The logic according to the simulation is that the service is a way to keep loyal customers happy, and quality engineering is a necessity for a motorcycle product. The simulation apparently occurs in a vacuum for the first sequence. First, the "Price" is not a critical factor in a true oligopoly marketplace. In a true oligopoly, firms use non-price factors in order to generat... ... middle of paper ... ...ers started offering leasing options that the product life cycle shortened again by several years in the late eighties and early nineties. I feel that the Thorr simulation could have better execution. First, the simulation gives contradictory advice in the first step. The simulation tells the user that a larger polygon means more market share; however, the largest polygon is not the optimal result. Second, "Price" is not a critical factor in a true oligopoly marketplace. In a true oligopoly, firms use non-price factors in order to generate larger revenues and larger market share. Third, clients can read numbers, so have the survey results directly correlate to the perceptual plot rather than trying to interpret numbers. Last, the company could have shortened the product life cycle significantly by introducing leasing options as opposed to better financing.
It is through following these statements that will bring a firm success in the future. However, external factors outside of a company’s control can negatively affect the expected targets and steer the company from their mission & vision. Most companies do not have direct influence on this kind of environment (Harrison & St. John, 2014). The following three sections will evaluate the external forces & trends for Dick’s Sporting Goods. The following also will elaborate on external factors from direct competitors that faces Dick’s Sporting Goods. I will conclude on what other threats Dick’s Sporting Goods can expect to see, and how they can place a buffer in between these factors to stay on track towards their mission &
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.
Reduced pricing does not always ruin margins – Coming into this simulation I assumed big companies, such as Walmart, were able to offer such low prices only because they sold in such large quantities. However, through the simulation this was not the case. We thought to be successful with our low pricing strategy we would have to maintain the most market share. Although by round 5 we were only the second highest market share in the industry. However, this did not end up equating to the bottom line. Compared to Baldwin, Digby had over $20 million less in sales in round 5, but ended the round with $10 million more in profits. Since we invested so heavily in the core of our business our costs were extremely low allowing us to be the most profitable company in our
The simulation game empower me with great marketing skills. Many things were learned during the simulation. The game allowed me to apply basic marketing concept in realistic environment.
This organization belongs to the oligopoly market structure. The oligopoly market structure involves a few sellers of a standardized or differentiated product, a homogenous oligopoly or a differentiated oligopoly (McConnell, 2004, p. 467). In an oligopolistic market each firm is affected by the decisions of the other firms in the industry in determining their price and output (McConnell, 2005, P.413). Another factor of an oligopolistic market is the conditions of entry. In an oligopoly, there are significant barriers to entry into the market. These barriers exist because in these industries, three or four firms may have sufficient sales to achieve economies of scale, making the smaller firms would not be able to survive against the larger companies that control the industry (McConnell, 2005, p.
Excellent growth up until the most recent year. Sales dropped from 1984 to1985. A new product introduced in 1986 is forecasted to boost sales.
CarMax faces challenges from several fronts that could threaten to disrupt their growth plans and their position as a disruptor in the used car market. The biggest challenge they face is being able to continuously secure a study supply of high quality used cars, due to the extremely competitive nature of the used car market. CarMax offers cutting edge technology to help the company identify buying trends, pricing trends, and consumer preferences down to the zip code that gave them a large competitive advantage, as “data mining” has matured and competitors have developed their own software tools, eroding the competitive advantage to CarMax.
During the 1970's, HD was facing a decline in market share due to increased competition with Japanese companies. By phasing out weak models, becoming more selective, and limiting sales and promotions, HD was able to carve out a niche in the marketplace which it enjoys today. Now again faced with a period of decline, HD is relying on its newly adopted marketing objectives. First, HD needs to expand its potential customer base to include enthusiasts and non-enthusiasts young males, and females into buying HD motorcycles over any other competitor. This thought is 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. HD's strong brand identity can help pull in new clients.
Topic A (oligopoly) - "The ' An oligopoly is defined as "a market structure in which only a few sellers offer similar or identical products" (Gans, King and Mankiw 1999, pp.-334). Since there are only a few sellers, the actions of any one firm in an oligopolistic market can have a large impact on the profits of all the other firms. Due to this, all the firms in an oligopolistic market are interdependent on one another. This relationship between the few sellers is what differentiates oligopolies from perfect competition and monopolies.
The issue is whether RLK should exploit its brand equity as it is known for their innovation and the innovation capabilities. However, Lars need to understand that outsourcing is not the only option and he should consider more options and possibilities.
Rivalry among established firms is fierce. There are several factors that illustrate this: established market players (6.1). The product is highly standardized and the switching costs of the customers are low. Players are aggressive (6.2)
Despite their conception in 1903, Harley-Davidson and the motorcycle industry as a whole didn’t really take off until after the Second World War. Many people rode motorcycles during the war, with Harley-Davidson themselves supplying almost 90,000 motorcycles for the U.S. military during this time. Many veterans chose to purchase motorcycles upon returning home, as they enjoyed riding during the war and wanted to continue riding in their civilian life. This generation known as the "baby-boomers" quickly became the main target audience for many of Harley-Davidson’s marketing efforts. With sales increasing and the industry growing, many "motorcycle clubs" and "rallies" were introduced. Unfortunately, due to the lewd behavior displayed by most people associated with these clubs and rallies, bikers typically had an image of being disorderly and raucous. Harley-Davidson’s image itself took a big shot due to the Hells Angels. This was a motorcycle gang wishing to become notorious for "drug trafficking and other organized crime activities," who used only Harley-Davidson motorcycles. All of this combined to lead to a decline in demand and sales throughout the entire industry during the 1960’s. The industry was really helped out with the release of the Hollywood film Easy Rider in 1969. This film helped change the public’s perception of bikers and sparked an increase in motorcycle demand which has lasted to this day.
"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."
William Harley and Arthur Davidson started Harley Davidson Inc. in 1903 when they were intrigued by the newly invented concept of motorcycles. The pair was so moved by the concept they decided to begin manufacturing their own motorcycle which will would be unique by many measures (Oosterwal, 2010). Since the company’s onset; innovativeness has been at core of the firm’s business strategy, and the business has willfully followed this strategy. From their inception Harley Davidson has enjoyed an active path of enormous growth and gradually emerged as the most recognized motorcycle producer in North America. In fact such is the growth story of the firm, a company of its size has managed to achieve phenomenal growth rate. Despite economic turbulence, the company has managed to operate efficiently, largely supported by its strong financial backbone (Repine Jr., 2011). Other key strategies such as---branding and global expansion, have enabled the company to sustain its growth rate for a long term. The recent performance of the company was moderate, mainly due to economic down turns and market fluctuations; despite this, the price earning ratio and earning per share are significantly strong (Chan, 2010).
The threat of new entrants is moderately strong. Incumbents do not strongly contest entry of newcomers, but existing industry members are consistently looking to expand their geographic reach and offer a broad product assortment. Brand awareness and customer loyalty are high and greatly important i this industry.