Ktm Is a Motorcycle Manufacturer Based in Austria.

KTM is a motorcycle manufacturer based in Austria.  They have positioned themselves as a company that make high-quality motorcycles and have focused on building their brand.  Seventy percent of their revenues come from off-road motorcycle sales.  

KTM is now seeking to improve its growth both to gain more market share and to meet the growth expectations of the Venture Capitalists that own 49% of the company.  

KTM’s success is based on many elements.  KTM offers a differentiated product, a distinctive engine configuration, and unique design elements.  Their bikes are known for their quality and performance.  KTM also has the technology to stay on top of the changing trends.  They have had great success through the creation of their own sales subsideries, taking control of getting their product to the market place.  They have strong relationships with their suppliers and the dealer network.  They have invested in training the suppliers, and have developed a data processing system that keeps them closely connected to their dealers.  

There are many opportunities available to KTM.  Decisions need to be made to bring growth, while exploiting their current capabilities and resources.  These decisions include; whether to manufacture on-road bikes and ATV’s and in what geographic areas there is a market for the bikes they currently manufacture, and the products they are considering manufacturing.  

The first option considered was joining with another firm.  KTM was considering acquiring a smaller company, MotoGuzzi, or merging with Ducati.  This strategy would allow KTM to become a larger company, or become part of a larger company.  They would have the capital to compete with the larger competitors such as the “Big Four” (Honda, Yamaha, Suzuki, and Kawasaki).  These strong competitors make it difficult for smaller, less known brands to successfully compete for market share.  This option is not viable at this time.  The acquistion of Moto Guzzi is too costly and time consuming.  The merger with Ducati was decided against because of the risk of KTM being consumed by Ducati.  

The second option considered was opening a plant in the US and manufacturing both off-road and on-road.  MORE INFORMATION.

The third option considered was to maintain its operations as they are now, manufacturing a new on-road motorcycle and attempting to grow within the markets.  Assessing the environment….MORE INFORMATION

The recommended growth option for KTM involves a combination of activities.  The first is to both maintain its current operations, while manufacturing an on-road performance motorcycle.  The second and greatest change to KTM is the opening of a plant in Canada, making on-road bikes and continuing its current product line.