Piaggio is an Italian scooter manufacturer established in 1946 known for the Vespa scooter. During the 1980s, Piaggio faced bankruptcy due to a lack of focus, but has since expanded into India and China with 35 new scooter models. Piaggio's strengths include its leadership, brand image, supplier relationships, and skilled technicians, but it faces weaknesses such as overcapacity, limited global penetration, and suppliers with constrained capacity. The document analyzes Piaggio's position in the European scooter market and recommends alternatives for addressing its weaknesses, including maintaining its European focus, supplying green engines, or expanding globally.
Piaggio is an Italian scooter manufacturer established in 1946 known for the Vespa scooter. During the 1980s, Piaggio faced bankruptcy due to a lack of focus, but has since expanded into India and China with 35 new scooter models. Piaggio's strengths include its leadership, brand image, supplier relationships, and skilled technicians, but it faces weaknesses such as overcapacity, limited global penetration, and suppliers with constrained capacity. The document analyzes Piaggio's position in the European scooter market and recommends alternatives for addressing its weaknesses, including maintaining its European focus, supplying green engines, or expanding globally.
Piaggio is an Italian scooter manufacturer established in 1946 known for the Vespa scooter. During the 1980s, Piaggio faced bankruptcy due to a lack of focus, but has since expanded into India and China with 35 new scooter models. Piaggio's strengths include its leadership, brand image, supplier relationships, and skilled technicians, but it faces weaknesses such as overcapacity, limited global penetration, and suppliers with constrained capacity. The document analyzes Piaggio's position in the European scooter market and recommends alternatives for addressing its weaknesses, including maintaining its European focus, supplying green engines, or expanding globally.
Piaggio is an Italian scooter manufacturer established in 1946 known for the Vespa scooter. During the 1980s, Piaggio faced bankruptcy due to a lack of focus, but has since expanded into India and China with 35 new scooter models. Piaggio's strengths include its leadership, brand image, supplier relationships, and skilled technicians, but it faces weaknesses such as overcapacity, limited global penetration, and suppliers with constrained capacity. The document analyzes Piaggio's position in the European scooter market and recommends alternatives for addressing its weaknesses, including maintaining its European focus, supplying green engines, or expanding globally.
Established in Italy in 1946 with Vespa Best Selling Scooter Leading manufacturer for European scooters Close to Bankruptcy during 1980s till 1993 due to Lack of Focus Expanded in India and China with 35 new models Product Line: 50cc Scooter, trendy Typhoon Benetton, 50cc and 125cc Vespa About Piaggio About Piaggio (cont.) Strengths Exemplary Leadership Cult Image Bargaining relationship with Suppliers Skilled Technicians Long lasting products Weaknesses Structural Overcapacity Less global penetration Suppliers with limited capacity Heavy investment in design Market Characteristics (Europe) Mopeds and Small Motorcycles (including scooters up to 125cc) Target teenagers + urban commuters Demand depends on: Demographics Economic conditions Weather patterns Regulations and emission norms Large motorcycles (125cc+) Target for sports and touring, people with high purchasing power Demand is linked with the economic conditions Environmental Analysis Europe Increasing demand for inexpensive and manoeuvrable vehicles Increasing demand for classic scooters Growing interest among the urban population Asia High population Increasing purchasing power Low penetration Demand for PTWs In Europe 12% of the global demand or 1.7 million vehicles In Asia 70% of the global demand (30% solely from China) Environmental Analysis Main Competitors Aprilia (Italy) Second largest motorcycle, scooter and moped manufacturer in Europe Positioning - Sense of Wonder Strengths- Only European firm to cover the entire range of two-wheelers Creativity, innovation, flexibility, speed Purchased engine from Minarelli (reliable and cheap) Star Scarabeo Fashionable retro look Functionality Weaknesses- Heavy reliance on suppliers Environmental Analysis (Competitor Analysis Cont.) Honda, Yamaha, Suzuki (Japan) Strengths High-tech global products Built on homogenous needs across world markets Superior quality Economies of scale leading to competitive prices/higher margins Longer product life as compared to niche products Decentralised operations to save the costs further Strong foothold in South Asian newly industrialised countries Environmental Analysis Environmental Analysis Opportunities Increasing demand due to population Penetration into Asian Markets Potential introduction of EU regulations Threats Competition from Japanese companies Competition from European Companies Two wheelers were not considered primary vehicles Fast changing consumer preferences Market saturation in developed countries Dominance by Japanese Companies Less Economies of Scale Structural Overcapacity Issues Alternative1- Maintain focus on Europe Strong suppliers relationship-High bargaining Power Piaggios niche competency in Europe Changing emission norms- First mover advantage Reason Gain first mover advantage Increased market share Benefits Saturation in offing in European market Higher cost Constraints Increase price incrementally-Green Engine Widen the product line high margin products Acquire Aprilia- Sports bikes Recommendations Alternative 2 Supply Green Engines High manufacturing cost, Vespas sales forecast at 3,50,000 annually was not enough to breakeven. Reason Only European company with expertise in Green Engine Higher profit margins Benefits Competition with the Yamaha Risk of duplicity Constraints Identify Markets Pricing Strategy Recommendations Alternative 3 Expand Globally Opening of new plants in Asian countries by Japanese Reason Direct competition to Japanese manufacturers Cost Advantage Economies of Scale, Local Resources Meeting Structural Overcapacity Benefits High Investment Local laws Challenges in current Product Line Constraints Identify rapidly developing economies Decentralization Mass production- common product Recommendations THANK YOU