Introduction
Even though Victory Motorcycles has effectively introduced its motorcycle models to the market, the company is yet to achieve its desired goals. The company needs to identify whether its marketing and distribution of the motorcycles were happening correctly. Victory decided to distribute its motorcycles through Polaris dealers with the objective of monitoring quality, but it seems like the company is losing potential business by doing so. The company is in a stalemate on whether it should diversify its product line, expand overseas or make more acquisitions as a strategy to grow. To enhance its growth, Victory motorcycles should lookout for new opportunities by having effective distribution channels and marketing strategies, increasing its product offerings and acquiring more companies.
Analysis of Case Problem
Victory motorcycles introduced the first set of bikes in 1998, and the company has managed to remain innovative for over fifteen years. This has happened through the release of newly styled motorcycles and the acquisition of other motorcycle companies. Victory had a great focus on on-road motorcycles, therefore, did not capitalize on developing off-road bikes. From 1998 to 2006, the company invested over one hundred million dollars in the development of motorcycles but started recording profits in 2006 (Case 13, n.d). Despite making a good number of sales, the competition faced by Victory motorcycles was making it hard for the company to grow in the market. With strict selection criteria, Victory sold its motorcycles through the Polaris dealer network. Victory used the strategy with the aim of monitoring quality since Polaris dealers were easier to follow.
The company maximized advertising its motorcycles through the press and motorcycle magazines. This also indicates that Victory should consider enhancing its marketing strategies to increase the chances of success in the market. Victory motorcycles have been facing competition from major companies such as Harley-Davidson, Japanese Manufacturers, and Excelsior-Henderson. This indicates that Victory motorcycles has to look out for new strategies to help the company remain competitive in the market. Another factor that has fueled the growth of Victory motorcycles is the various acquisitions made by the company. In 2011, Victory announced that it had acquired Indian Motorcycle Company, which was the first American company in the industry (Case 13, n.d). However, the company had been knocked out of business by British motorcycles, with attempts to revive it being unsuccessful. Victory has also acquired Brammo, which was operating as a minority stake in producing electric vehicles running on two wheels. The various strategies applied by Victory Motorcycles have proven to be effective, but the company is yet to achieve its desired goals.
Solution
One of the recommendations that can help enhance the success of Victory motorcycles is having effective distribution channels and marketing strategies. Victory has a great reliance on specific dealers affiliated with Polaris having an objective to monitor the quality of its products. The company should consider partnering with several popular retailers to enhance the distribution of developed motorcycles. Retailers such as department stores and specialty stores prove to be effective distribution channels (Indeed, 2021). Partnering with retailers rather than relying solely on Polaris dealers will help increase the customer audience for the motorcycles, hence increasing sales and profits. The company can also partner with independent distributors to enhance the distribution of its motorcycles. Independent distributors work closely with retailers to promote the sale of various products. Victory motorcycles has marketed its products through the press and motorcycle magazines which have helped ensure that the company gains customers. However, it would be necessary for the company to consider marketing its products through various media platforms. Media platforms will enhance the exposure of the motorcycles and possibly increase the number of sales in the long run.
Victory motorcycles should also consider diversifying its product line to reduce reliance on on-road bikes. When starting its production process, Victory focused on the on-road bike market since it promised more profits than the one for off-road bikes. Even though on-road bikes have helped Victory maintain profitability, the company must diversify its products to attract a greater customer audience. In this case, it would be advisable for Victory motorcycles to consider the production of off-road bikes, more electric motorcycles and possibly energy-efficient scooters. Having a wide range of product offerings will enable the company to attract more customers, increasing the chances of maintaining high profitability.
Another solution that Victory motorcycles should seek to maximize is acquiring more companies and forming strategic alliances to grow its international market. The different companies that Victory has purchased in the past have enabled it to introduce new products to the market while also enhancing its profitability. Acquisitions and strategic alliances will expose Victory to more resources and capabilities hence an increased likelihood of producing motorcycles that attract more customers in the market. This strategy will stimulate the growth of Victory motorcycles with time. Strategic alliances are necessary when a company seeks to expand its operations at international levels. The strategy will enable the company to maintain competitiveness in the market without trailing behind other motorcycle-producing companies.
Justification
Victory motorcycles will gain significantly by changing its distribution channels and marketing strategies in the following ways:
- Retailers enhance consumer product interaction before making a purchase hence increasing confidence.
- Retailers also enhance product awareness by utilizing diverse promotion strategies.
- Independent distributors enhance the possibility of market expansion since they have an established retail network (Trowers, 2019).
- Marketing through various media platforms will enhance the company’s global reach and possibly attract the desired audience (Saini, 2020).
Diversification of the product will be beneficial to Victory motorcycles in the following ways:
- Having a diverse product line helps mitigate financial risks when faced with various challenges in the industry (Smith, 2017).
- Diversification of products also helps enhance the strength of a brand since customers are likely to remember a brand that offers a variety of goods.
Focusing on acquisitions and strategic alliances will help Victory motorcycles to achieve the following:
- Strategic alliances act as an entry mode to the international market by enabling a company to share risks and resources with another one (Chapter 8, n.d).
- Strategic alliances help create competitive advantages by allowing a company to access more resources (Chapter 9, n.d).
- Acquisitions also allow a company to access more competencies and resources necessary to succeed in the market (Patel, 2021).
Summary
Even though Victory motorcycles have been successful over the years, there is a need for the company to reduce reliance on Polaris dealers for distribution. Victory should consider partnering with retailers and independent distributors to enhance the reach of a great audience. The company also markets its products through the press and motorcycle magazines, which might limit reaching a great customer audience. The company should consider using various media platforms to market its motorcycles to enhance greater reach. Victory motorcycles are focused on the production of on-road bikes and has managed to create a competitive advantage by acquiring other companies. The firm should consider diversifying its product line to have different types of bikes. It should also maximize strategic alliances and acquisitions since the strategy will enhance access to resources and expansion to the international market.
References
Case 13. (n.d). Polaris and Victory: Entering and growing the motorcycle business
Chapter 8. (n.d). International strategy.
Chapter 9. (n.d). Cooperative strategy.
Indeed. (2021). 8 effective distribution marketing channels. Indeed Career Guide.
Patel, K. (2021). 10 benefits of mergers and acquisitions you should know. DealRoom.
Saini, C. (2020). The benefits of online advertising. Colombia – Blog. Web.
Smith, C. (2017). What are the advantages of having divergent business lines? Small Business – Chron.com.
Trowers. (2019). How to decide whether to use an agent or a distributor to grow your business. Medium.