What are the resources and capabilities of KTM?
There are some key resources and capabilities KTM relied on for its success.
Firstly, the company reached a differentiation approach due to its high-level technology and distinctive design. KTM paved the way for innovative technology in terms of engines, suspensions and assembly practices. The unique design element came through their distinctive orange colour and characteristic styling; combining Italian style with German efficiency. Consequently, they acquired a reputation for reliable and high quality motocross bikes.
Secondly, Kunz mentioned that one of the keys to winning in the industry is a strong dealer network because it enables ...view middle of the document...
The network, premium brand image and racing performance became a capability of KTM.
Lastly, the company created a work atmosphere which incorporated mostly motocross bikes enthusiasts; similar to the customers. An open, democratic, relatively flat hierarchy contributed to a positive and creative work atmosphere as well as one with low overhead costs. This also became a key resource of the companies successes with a well grounded team working towards the same goals and on similar levels.
One of the options for KTM is product expansion. Given their resources and capabilities, which of the following two options would you advice them? *
Please explain why.
When evaluating the motorcycle industry it shows us that the on-road market has represented over two-thirds of the motorcycle market. In 2002 figures put it at almost 80 per cent of motorcycle sales. It is thus a growing industry worth investing in, particularly for KTM. Research according to Kunz shows that the image - the styling of the bike and the technical specifications - and lifestyle of the brand was very important to expand in this field. These are fields that the venture already has resources and capabilities in since they are known to be a premium brand, adventurous, and have a combination of Italian design style with German efficiency. KTM is the leading supplier in superior technology and design it would be unintelligent to not expand in this bike segment.
Furthermore, they already sold sportminicycles, rally bikes and supermotors, elements similar to those of on-road bikes. They can easily step over to on-road bike with the knowledge they acquired creating these first similar motorcycles. Given that the company is a chief sponsor at races worldwide and has an extensive Dealer Net, they can sell the models more easily and see what their customers like most. The network provides them to more easily receive the services, parts, financing, warrants, etc. to go for this product expansion.
A potential hurdle is that there are competitors already present in this market; the “Big Four,” which includes Honda, Yamaha, Suzuki and Kawasaki. KTM would have to start from zero to establish themselves in the on-road market. Nevertheless, they are an established brand in the motorcycle world and given their t...