Analysis of Ktm's Business Structure
Introduction
KTM is a company that designs and manufactures motocross, rally, and cross-country racing motorcycles and is based out of Mattighofen, Austria. They are a highly reputable company with exceedingly high growth rates. As a venture capitalist firm, they require high growth from their investors and generally demand more say in management decisions if growth expectations are not met. For this reason, KTM are pressured to maintain or increase their growth and continue this level of performance in the future. As the motorcycle industry was expected to grow to 5.3% in the next four years, KTM has realized its time to start investigating growth opportunities. KTM has several options; they can expand in the already existing European and North American market or they can expand their product line. Within these two options there are many alternatives KTM has to evaluate, these alternatives will be presented in the preceding sections of this report.
Key Issues
The key issues KTM are facing in regards to their decision making process are growth, barriers to entry/expansion into the North American market, and their current structure.
Growth: To meet growth expectations, KTM will need to measure several alternatives as to what the company’s next move will be in order to achieve the extraordinary growth the company needs.
Barriers to Entry/Expansion:
Extensive research and development: Which could cost upwards to €10 Million.
Suppliers: KTM would have to search for local suppliers for new parts.
Currency issues: Where KTM is a European company, currency issues would arise when expanding the North America.
Brand awareness: Intensive marketing efforts to raise awareness in North America where the KTM brand is not as recognized as it is in Europe.
Cost: The cost of expansion and product development would extensive, and a financial analysis would need to be weighed.
KTM’s Structure: Developing an outstanding reputation for sporty,
KTM is a company that designs and manufactures motocross, rally, and cross-country racing motorcycles and is based out of Mattighofen, Austria. They are a highly reputable company with exceedingly high growth rates. As a venture capitalist firm, they require high growth from their investors and generally demand more say in management decisions if growth expectations are not met. For this reason, KTM are pressured to maintain or increase their growth and continue this level of performance in the future. As the motorcycle industry was expected to grow to 5.3% in the next four years, KTM has realized its time to start investigating growth opportunities. KTM has several options; they can expand in the already existing European and North American market or they can expand their product line. Within these two options there are many alternatives KTM has to evaluate, these alternatives will be presented in the preceding sections of this report.
Key Issues
The key issues KTM are facing in regards to their decision making process are growth, barriers to entry/expansion into the North American market, and their current structure.
Growth: To meet growth expectations, KTM will need to measure several alternatives as to what the company’s next move will be in order to achieve the extraordinary growth the company needs.
Barriers to Entry/Expansion:
Extensive research and development: Which could cost upwards to €10 Million.
Suppliers: KTM would have to search for local suppliers for new parts.
Currency issues: Where KTM is a European company, currency issues would arise when expanding the North America.
Brand awareness: Intensive marketing efforts to raise awareness in North America where the KTM brand is not as recognized as it is in Europe.
Cost: The cost of expansion and product development would extensive, and a financial analysis would need to be weighed.
KTM’s Structure: Developing an outstanding reputation for sporty,