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 generate larger revenues and larger market share. With a market penetration of over 40 percent, the firm has a strong brand presence and large market share already, and in theory non-price factors should be more important. Second, the...
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