Triumph Motorcycles is an English motorcycle manufacturer, originally called Triumph Engineering Co Ltd and based in Coventry. The company now in Hinckley took over the name rights after the collapse of the company in 1980s.
Siegfried Bettmann, aged 19 in 1883, founded his own company. His original products were bicycles. And he also distributed sewing machines imported from Germany. In 1898, Triumph decided to extend its own production to include motorcycles and by 1902, the company had produced its first motorcycles - a bicycle fitted with an engine.
During its first few years, Triumph based its designs on those of other manufacturers. In 1904, Triumph began building motorcycles based on its own designs. In the following years, Triumph developed various styles of products. And its' empire of motorcycles is growing in a rapidly rate.
But between 1973 and 1983, the company had hard times keeping it's head above the water.
Nothing could help the financial struggle of Triumph. Triumph was fighting against the high tech designs that companies like Honda were making. Triumph went into liquidation in 1983 after which it was bought by John Bloor.
In 1990, John Bloor opens a state-of-the-art plant in Hinckley and unveils new Triumph Models. It took 8 years to develop a range of 6 roadsters which could use many of the same components and had same styling features.
The base model to all roadster was the trident model with a three cylinder 750cc or 885cc engine. The bikes used a strong frame with Japanese brakes and suspensions. The Trophy 1200 and Daytona 1000 were launched and a great success.
In 1664 Triumph launched a new Thunderbird model with a stylish retro look at was also based on the 885cc triple engine. The old stylish look was a great success worldwide.
In 1995, Triumph returns to the US market, distributing through Triumph USA subsidiary set up the year before.
In 2000, the company re-launches the super famous Bonneville. With a very similar look, the Bonneville is introduced again to a new market which now once again trusted the Trumph brand again. This approaches the break-even mark of Triumph.
In the 21st Century, Triumph Built its 100,000 th bike and release 2 brand new motorcycles, the TT600 and the Boneville. It was an immediate success in America. The cruiser-style Bonneville America followed hard on its heels, specifically designed for the US market.
Then fate intervened again. Just as Triumph geared up for the busy coming season, the factory was devastated, this time not by bombs but by fire. The fire was one of the largest industrial conflagrations ever to occur in Britain and although bike production was halted for six months and a shortage of some 20,000 machines caused some problems, there was never any doubt that Triumph would, just as before, come back. Almost six months to the day, the rebuilt factory was fully operational.
Soon after, at the 2003 International Motorcycle Show in Birmingham, England, the four-cylinder Daytona 600 supersports bike was shown publicly for the very first time. Visually stunning and packed with state of the art technology, the Daytona 600 is the fruit of hard earned knowledge and experience, gained from the TT600. Schulte, Sangster, Turner, Hopwood and the cast of thousands that have been involved in Triumph motorcycles over the last 100 years would surely approve.
Triumph currently employs 980 personnel worldwide and has offices in the UK (Head office), America, Thailand, Malaysia, France, Germany, Italy, Japan, Sweden and Benelux. Triumph aim to developing unique motorcycles that are distinctive in looks, design and performance, to deliver a great riding experience through the fusion of a well-balanced, easy to handle chassis and strong, flexible engines.
The following are the key issues facing Triumph in order to grow the company in the US market:-1.Low market share in US.
2.Customers have always been strongly attracted to domestic manufacturers.
Environmental ScanSWOT AnalysisThe following SWOT analysis aim to identify the extent to which the current strategy of Triumph and its specific Strengths, Weaknesses, Opportunities and Threats are relevant to, and capable of, dealing with the changes taking place in the business environment.
Strengths1.Low-cost capabilities as the Motorcycles are designed, development and built at their own factory.
2.Their factory is one of the most technologically advanced plants in the world located in Hinckley, in the heart of UK, which definitely increase the reputation and customer's confidence on Triumph's brand.
3.Distinctive competence in the designs of the motorcycles.
4.Core competencies in the quality of the engine.
5.The long history and experience of Triumph facilitates the technological know-how, skills in improving production processes and expertise in providing consistently good quality of goods.
6.A well-known brand name and recognition in the market with long history.
Weaknesses1.Since Triumph's products are only focused on the middleweight and heavyweight category, product line are too narrow relative to rivals, such as Honda or other Japanese manufacturers.
2.The price of products are relatively high, may lose those price-sensitive customers.
3.It's difficult to develop market in developing countries due to the boundary on high power of engine as well as price.
4.Weaker dealer network than key rivals.
5.Low market share.
6.Customers have always been strongly attracted to domestic manufacturers, e.g. Harley-Davidson is the market leader in America and BMW is the market leader in Germany. .
Opportunity1.High level of gasoline price would increase the demand of motorcycle since it used far less gasoline than cars.
2.Ratio of women motorcycle-owner growing quickly.
3.Motorcycling was a major fashion trend since the late 1990s.
4.While George Bush's use of military force in Iraq had turned many people around the world against America, there's an opportunity for non-amercian brand to compete in the market.
5.Associate with different brand or manufacturers to establish new products e.g. limited edition, in order to access attractive geographic market and new markets.
Threats1.Government legislation from different countries required compliance with tailpipe emission and noise standards. More resources may involve to meet such requirement standards, therefore, higher production cost is acquired.
2.The statistics of The National Highway Traffic Safety Administration (NHTSA) shows that motorcycling is much more dangerous than traveling by car.
3.While traffic fatalities per 100 million vehicle miles traveled hit a historic low in 2002, motorcycle fatalities had increased for a fifth consecutive year to reach 3,244 deaths.
4.Increasing intensity of competition among industry rivals, where Japanese manufacturers offering low price products with high quality.
5.Growing bargaining power of customers or dealers.
6.Since Triumph's motorcycle is kind of luxury products, downturn of economy would definitely adverse the business.
Industry analysisBy using the Five Forces analysis to examine the competitive environment, we would identify the forces which affect the level of competition in the motorcycle industry as follows:-Competitive Rivalry is very strong-The level of competitive rivalry is increasing as competitors sought to differentiate themselves to attract new buyers.
-Japanese manufacturers are offering a low price for high quality products.
-Key competitors like Harley-Davidson had stronger brand image and appeal.
-They also provides wider selection of models and styles.
-Bigger and better dealer network relative to key competitors.
There's a very strong pressures stemming from the key competitor as Harley-Davidson to gain better market positions, higher sales and market shares and competitive advantages.
The potential entry of new competitors are low due to the following threats of entry to the motorcycle market:1.Motorcycle industry is considered to be a mass production industry, economies can only be made to large firms using expensive machinery for intensive production, or availability of a local skilled labour force for manufacturing.
2.Considerable costs are required for entering the motorcycle industry.
3.Difficulty in accessing distribution channels as well as developing a distribution network.
4.Difficult to break into the market as there are existing competitors who knows the market well, has good quality of manufactory with high standard of technical skills, and has the financial ability and manpower to overcome market and operating problems.
5.Since motorcycle is not a necessity product, brand name and recognition and product differentiation would influence the buyers' decision and affect the sales of products.
6.A network of suppliers of parts is required to source the specialist components required for motorcycle. This network takes time and experience to build and suppliers may be reluctant to commit to it for a manufacturer not already established in the market.
The bargaining power of buyers is weak because:-Buyer purchase motorcycle infrequently or in small quantities.
-Buyer switching cots to competing brands are high.
-There is a surge in buyer demand that creates a "sellers" market.
-The Brand reputation is important to a buyer.
-Motorcycle delivers quality or performance that is very important to buyers and that is not matched in other brands.
The bargaining power of supplier is strong because:-It would incur high cots in switching purchases to alternative suppliers.
-Needed inputs are in short supply, which gives suppliers more leverage in setting prices.
-Supplier can be differentiated input that enhances the quality or performance of sellers' products or is a valuable or critical part of sellers' production process.
-There are only a few suppliers of a particular input.
Competitive Pressures from the Sellers of Substitute Products, i.e. passenger cars.
The threat of substitutes existed as the motorcyclist fatality and injury rates increased quickly from 1994 to 2004. More people would use a car rather than using motorcycle for traveling. Which make inroads into the market and so reduce its attractiveness.
The following chat shows the occupant fatality rates by vehicle type in 1994 and 2004:-Occupant Fatality Rates by Vehicle Type, 1994 and 2004Fatality RateMotorcyclesPassenger Cars1994Per 100,000 Registered Vehicles61.7618.032004Per 100,000 Registered Vehicles69.6814.4Percent ChangePer 100,000 Registered Vehicles12.82-20.14Per registered vehicle, the fatality rate for motorcyclists in 2004 was 4.8 times the fatality rate for passenger car occupants. The injury rate for passenger car occupants per registered vehicle was 0.9 times the injury rate for motorcyclists.
In 2005, motorcyclists accounted for 10 percent of total traffic fatalities, 12 percent of all occupant fatalities, and 3 percent of all occupants injured.
Competitor AnalysisRivalry in the motorcycle industry centered on performance, styling, breadth of product line, image and reputation, quality of after sales services, and price. Most motorcycle manufacturers had good reputations for performance and styling, with the greatest variance between brands occurring in pricing, variety of models, and quality of dealer service. There was also a great degree of price variability in the industry with comparable models of Japanese motorcycles typically carrying retail prices far below that of others competitors.
In the motorcycle market, the main competitors are defined as Harley-Davidson and Honda Motors.
Harley-Davidson is the global market leader for cruising and custom-made bikes, but in excess of 80% of the company's sales revenue is generated within the US. Thus there appears to be no decline in the popularity of Harley-Davidson in the US market. Effective branding is likely to be a significant competitive advantage, as motorcycles are status symbols and leisure products as well as means of transportation. Harley-Davidson has actually become a global brand. Also, in the motorcycle market, Americans have always been strongly attracted to domestic manufacturers. Harley-Davidson had achieved considerable success in US, because of exceptional performance and reputation, a strong dealer network, and regional loyalty to the brand.
Honda Motors is one of the leading manufacturers of motorcycles and the largest manufacturer of motorcycles in the world. The company provides a range of financial services for its customers and dealers, and a range of power equipment products. Their strategy focused on the main objectives of staying close to customers, understanding their needs and exceeding their expectations. For each country, a regional strategy was established to continually focus on the local market segment.
Nowadays, consumers are becoming increasingly attracted to foreign machines, particularly Japanese. These machines have become popular not only by quality but also race successes. This not only builds brand identity, but also provides evidence of engineering quality, thereby attracting potential buyers. However, Japanese offerings just a bit too fast and flash for the older people taste.
Market Shares of the Leading Producer of Motorcycles for the Heavyweight Segment, 2001 - 2003 (Engine Displacement of 651+cc)200120022003Harley-Davidson45.7%48.2%50.3%Honda20.5%19.8%18.4%Suzuki10.8%9.6%9.8%Kawasaki8.0%6.9%6.7%Yamaha7.9%8.9%8.5%Triumph2.5%1.8%2.0%Others4.6%4.8%4.3%Total100%100%100%Market segmentationSince the motorcycle market in the US is the largest single country market in the world, accounting for 28.9% of the global market revenues in 2005 and generated total revenues of $9.1 billion in 2005. Market segmentation would base on the US market environment.
Today's motorcycle-riding generations are more mild than wild, and can include anyone and everyone, from all walks of life and economic levels. Kids on dirt bikes, families, seniors, women, even serious presidential candidates ride motorcycles. College students love bikes and so do CEOs.
Motorcycles pervade pop culture, on TV, in major movies, and in multi-million dollar advertising and promotional campaigns for all manner of businesses looking to add some excitement to their corporate images. It's a complete U-turn away from the old negative biker portrayal.
In view of the below statistics, the following 3 potential market segments are developed for Triumph in the US market:-1.Male aged between 40 to 49 with income over $50,000.
2.Male aged over 50 with income over $50,000.
3.Female aged between 35 to 40 with income over $50,000.
The following chat illustrates the Motorcycle owner profile in US during in 1995 and 2000:-Age19952000Under 180.14.118-2415.510.625-2917.110.930-3416.411.535-3914.316.040-4916.324.6Over 5010.119.1% of Female7.39Marital Status19952000Single41.440.0Married56.658.8Highest level of Education19952000Grade School5.93.3Some High School9.59.6High School Graduate39.436.0Some College25.226.5College Graduate12.416.0Post Graduate5.26.9Household Income19952000Under $10,0003.42.3$10,000 - $14,9994.42.3$15,000 - $19,9997.84.7$20,000 - $24,99910.86.1$25,000 - $34,99921.413.3$35,000 - $49,99919.619.1Over $50,00019.933.2The average income of the motorcyclist in 2000 had doubled since 1980 ($17,500). In 1995, less than 20% of riders made over $50,000 per year. In 2000, more than 30% of rider had attained that income level.
Riders in the new millennium were also much older, in contrast to the average rider age of 24 in 1995. They used their bikes more for leisure and recreation than had the riders of the early 90s. The typical rider was interested in the outdoors. High among reasons given for riding are: fun and recreation, stress release and a sense of freedom. One major research firm found that motorcyclists tend to be more optimistic about their future and even more romantic than average.The demographic profile showed that motorcyclists came from all walks of life and variety of occupational, educational and economic backgrounds.
Furthermore, American acceptance of motorcycles and scooters as legitimate forms of recreation and transportation, combined with a choice of more than 300 models on the market (average price: $8,000) and even rising fuel prices, have all helped drive sales.
The increase of female participation in the workforce, and the subsequent rise in disposable income had had a positive effect on the motorcycle market. This consumer segment tends to be older and more affluent, and therefore holds the ability to purchase more expensive motorcycles.
Though the women market is less than 10% of the American motorcycle-owning population, however, it had been a growing segment of the industry. In the late 90s, nearly 500,000 US women rode their own motorcycles, and one of every four new owners were female. The average female rider was 39 years old. 64% of women riders were married and 56% completed some college. More women riders are in white collar occupations than male riders. Many women riders belonged to a riders club and were passengers for a few years before they purchased their first motorcycle. Women riders used their motorcycle time for either long distance touring (36% of riding time) or for local street use (31%). Only 10% of their riding time was spent commuting or running errands. More women's families positively supported their riding than the families of male riders (64% vs 55%).
In US, more than 20 million people in this country swing a leg over a bike each year. New model sales have topped one million for three straight years and sales figures have gone up for more than a decade. All in all, it's a big $23 billion dollar business.
Market TargetingConsumer purchased motorcycles for various reasons. Some were looking for low-cost transportation. Lightweight motorcycles, mopeds, and scooters were priced inexpensively compared to cars and used far less gasoline. In the US, most consumers preferred to travel by motorcycle on weekends or other times they were not working.
Many motorcycle owners, looked at riding as a form of recreation and had given up other sports or hobbies to spend time touring on motorcycles. Many middle-aged bikers in the US had purchased motorcycles after giving up sports and activities requiring more athleticism or endurance.
Triumph Motorcycles announce strong sales and continued positive growth for the 2005 financial year (July 04 to June 05). The statistics shows that the global sales up 29% on 2004. UK sales have risen 10% in a static market, North America sales increased by 40%, both France and Switzerland saw rises of 43%, Japan rose 34%, Italy 25% and Germany is up 18%.
The sales growth shows that Triumph focuses on distinctively designed motorcycles with a lot of character has been very successful and this is where our focus will continue in the future. In many ways the Daytona Triple epitomizes the strategy change that has taken place in our sport range, where we now focus on distinctively designed three-cylinder motorcycles.
With the launch of several new models over the last year, including the Speed Triple and Sprint ST, the model range is significantly more focused and comprises distinctively designed machines with lots of character.
The Scrambler is both a modern classic and a fun lifestyle machine that will appeal to young and old. We have seen more and more people watch on to the retro-wave and Triumph is the only manufacturer that could build this motorcycle.
Based on the special character of Triumph's motorcycle, we would target the market to the males who aged between 40 to 49 with income over $50,000, who have extra money for enjoying their lives. They would take pleasure in pursuing status recognition. Besides, rebellious teenagers with limited resources in the 1970s were becoming affluent parents with teens of their own in 2003 and beyond. The brands they bought at different stages in their lives reflected the changes in their earning power, and their basic motivations for buying a motorcycle. The Triumph's products would definitely meet their requirements.
The following illustrate that the Triumph's products are costume to meet the customers' needs of such segment.
The new product of Sixty8, was the new cool era for modern Bonnevilles, which has a new range of Sixty8 accessories that will give it that combo of "Retro & Contemporary Style" to the motorcycle.
Polycarbonate Tank BadgesSport Rear MudguardTank Covers - StatementsAlso, Triumph had associated with Bentley Motors, which is a reputable motor manufacturer to create a limited edition product - Bentley Special.
While Bentley Motors needs to inject some British horse power into its US sales campaign. It purchased and customized a unique Triumph Rocket. It features as the top prize in Bentlleys Dealer Sales Recognition Program.
The bike is fully customized with the seat being sent to the Bentley factory in Crewe England to be hand trimmed by Bentley craftsemen in the leather actually used in its Arnage Models. The custom paint job also uses a paint from the Bentley palette. Bentley logos and 'imitation stitching' on the petrol tank to mimic Bentley's exquisite interiors was chosen following a competition amongst Bentley's various marketing agencies creative team.
Product positioningIn 2003, there were more than 950,000 motorcycles sold in the US and 28 million in operation worldwide. The industry was expected to grow by approximately 5 percent annually through 2007. Demand growth for the heavy-weight motorcycle category had outpaced smaller motorcycles in the US during the 1990s and into 2003, but analysts projected that demand for large motorcycles would decline as the population aged and became less able to travel on two-wheelers.
The industry was segmented in to various groups according to engine size and vehicle style. Motorcycles used for basic transportation or for motocross events were typically equipped with engines ranging from 125 to 650 cc. Larger street bikes required more power and usually had engineer over 650cc. Large motorcycles with engine displacements greater than 651cc accounted for the largest portion of demand in North America and Europe as riders increasingly chose motorcycles with more horsepower and better performance.
Motorcycles in the 651+cc segment were referred to as heavyweights and were grouped into four categories, which are, Standard, Performance, Custom, and Touring.
Standard heavyweight motorcycles were designed for low-cost transportation and lacked many of the features and accessories of more expensive classes of heavyweights.
Performance motorcycles had streamlined styling, low-profile fairings, and seat and handlebar configurations that required the rider to lean for ward. They were characterized by responsive handling, rapid acceleration, and high top-end speeds.
Custom motorcycles ranged from motorcycles with a custom paint scheme to highly personalized motorcycles painted with murals or other designs, chrome frames and other components, and accessories not found on stock motorcycles. Custom bikes were the largest segment of the US heavyweight market for motorcycles and had become a curiosity for non-cyclists in the US. They were usually sold to celebrities such as movie stars, professional athletes, or rock musicians.
Touring bikes were set apart from other categories by creature comforts and accessories that included large fairings, storage compartments, CD players, cruise control, and other features typically found on cars rather than on motorcycles. Touring motorcycles were popular in the US since many baby boomers wished to enjoy motorcycling in comfort. Comfortable saddles, upright riding positions, and other features found on touring bikes were especially welcomed by those who took cross-country or other long-distance journeys.
Regional Comparison of the Motorcycle Market by Segment in US, 1998-2002(Percent of units registered)19981999200020012002Standard1.81.82.01.72.2Performance19.418.920.419.117.3Custom58.457.756.658.960.3Touring20.421.721.120.320.2Total100100100100100Approximate Price RangesClassPrice RangeEngine SizeStandard$2,700 - $4,00050cc - 250ccPerformance$5,000 - $6,000251cc - 1200+ccTouring$10,000 - $18,000251cc - 1200+ccCustom$12,000 - $25,000751cc - 1200+ccTriumph Motorcycles focused on the engine also the design of the motorcycle that falls within the segment of Performance and Custom, which were the largest segment of the US heavyweight market for motorcycles and had become a curiosity for non-cyclists in the US.
Implementation planDevelop wide selling networksAssociate with more large and major dealers or even other brands in order to access to valuable technology, competencies and attractive geographic markets.
Typically, consumers had some ability to negotiate prices with dealers, but most did prefer to buy from dealers with good service departments, large parts inventories, and attractive financing programs.
Actions:-Providing direct news to customers from the Triumph Magazines, "Torque" quarterly for building better relationships with customers.
-Expend dealers' network and set up at least one regional centre to ensure appropriate marketing plan is implemented.
-Liaise with financial companies or dealers to provide mortgage plan with special rates to attract customers.
Provide consist high quality and reliable products to consumers.
This would definitely help to build good reputation in the market and get more sales from consumers' "recommendations". Consumers typically evaluated brands by talking to other cyclists, reading product reviews, perusing company Web sites, noting advertisements in print and other media, and noting a manufacturer's performance in competitive events.
Enhance the sportbike market.
Continuous to sponsor on motorcycle competitive events. Since the sprotbike owners spend significantly more on aftermarket purchases, including tires, repairs and maintenance, replacement parts, accessories and modifying equipment, and riding apparel.
Develop new products to add upscale consumers to the existing customer list.
Actions:-Conduct customers survey regularly to understand the trend and customers' needs.
-Enhance the equipments for designing in order to facilitate the design process.
Carry out promotion plans in different channels.
Apart from the traditional promotion ways, such as TV, Media, advertisements, perform the promotion through different ways of sponsoring . e.g. Borrow Triumph motorcycles to use in movies, sponsoring motorcycle competition events etc.
Cultivating Loyalty through RAT membershipTriumph has also set up a Riders Association of Triumph (RAT) who runs a diverse programmer every year, with events taking place locally, nationally and internationally. It provides Triumph's owner with local clubs where they could socialize and ride with other owners. Once new owners came to feel they belonged to the RAT community, they would bring new buyers to the company without any encouragement from Triumph.
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