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1) Business Admin Capstone
From the case study, evaluate the business-level strategy of Victory Motorcycles to
determine whether you believe the strategy is appropriate to offset forces in the industry.
Provide specific examples to support your response.
· Make recommendations for improving this strategy as well as describing any challenges
you foresee in executing those recommendations. Provide specific examples to support your
response.
Please answer above question here in 120 words or more.
Please use the Attached Case study for this post
2) Business and Society
Being a sustainable and environmentally conscious company is not only good for
the planet, it is also a great way for companies to be more efficient, save money,
and get an edge on the competition. There are many issues to consider when
planning for sustainability, especially in a global environment where countries
have vastly different laws as well as ecological concerns.
In a post (Initial discussion must be 80 at least words for full-credit): Discuss
some environmental or sustainable practices you can adopt, or mayb e you have
already adopted (like carrying your own recyclable bags to the store or trying not
to use disposable containers for food storage). Do you think these practices are
worth the cost savings? Why or why not?
Please answer above question here in 80 or more.
3) Solution to global issue
The Pledge to Eliminate Poverty
The United Nations Millennium Development Goals were created to provide developing countries
support through the partnership of developed countries. Now the UN is working towards
achievement of the Sustainable Development Goals. These two videos look briefly at these:

The Sustainable Development Goals are very dynamic. Do you see the goals are
achievable? Do you see all the goals as necessarily desirable or even practical to achieve? Do
you feel they can be reached by 2030 in a world were governments, cultures, and resources differ
greatly?
Please answer above question here in 8-10 or more sentences.
Polaris and Victory:
Entering and Growing the Motorcycle Business
INTRODUCTION
To strengthen its diversified portfolio, Polaris Industries entered the motorcycle
business in the 1990s. This case encapsulates the history and development of the Polaris
Victory Motorcycle Division from its conception in 1993 up until 2014. It closely follows
the new product research and development process, thoroughly examining the company’s
pre-production planning stages. Decisions regarding product introduction and value chain
activities (manufacturing, distribution, and marketing) are reviewed, along with detailed
coverage of market conditions and industry competition.
The objective of this case study is to re-examine the company’s strategy in light
of actual performance and changing conditions in the marketplace. To do this requires an
analysis of the conditions which initially influenced Polaris’ new product development
decisions and a review of what the company did right and what it did wrong. Then,
changes in the marketplace since the Victory motorcycle was introduced should be
appraised in order to determine if the company’s strategy is suitable for current industry
conditions.




What factors influenced the company’s decision to enter the heavyweight segment
of the motorcycle market in the mid-1990s? Were industry conditions favorable
for a new entrant at the time?
In what ways was Polaris successful with the introduction of the Victory product
line? What did the company do wrong?
15 years after entering the industry, describe current market conditions facing
Polaris. How have competitors responded to Polaris and Victory; and what
prominent competitive threats presently exist?
How do today’s conditions affect the company’s strategic decisions for Victory’s
next decade in the marketplace?
ANALYSIS

What factors influenced the company’s decision to enter the heavyweight segment
of the motorcycle market in the mid-1990s? Were industry conditions favorable for
a new entrant at the time?
In the search of expansion opportunities, Polaris looked at various industries in
terms of competition, size, service level, and trends before the company’s attention was
drawn to off-road motorcycles. At the time, the market was growing and showed
promise, feedback from the loyal Polaris customer base was positive, and interest in this
product line was fueled by the fact that Parks (who was on the research team) and
Wendell (then, CEO) were both motorcycle owners.
Further examination revealed several conditions which favored a decision to enter
the motorcycle industry. Internally, the company’s infrastructure was well-suited to the
needs of a motorcycle manufacturer. This included Polaris’ sales force, dealer network,
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Polaris and Victory
Polaris and Victory:
Entering and Growing the Motorcycle Business
service and warranty operations, and parts and accessories division. The company’s
experience with recreational vehicles, engineering and design capabilities, technological
knowledge, production capacity, marketing expertise, and distribution system were all
internal strengths which could easily support expansion into the motorcycle business.
And its interest in moving into a parallel engine business indicated that “the stars were all
aligned”.
In addition to the obvious synergies, statistics from the Motorcycle Industry
Council revealed that unmet industry capacity would support a new entrant. The potential
was enticing. The worldwide motorcycle market was larger than that for Polaris’ other
product lines, and pricing models showed that motorcycles could retail for twice the price
of all terrain vehicles (ATV) and personal watercraft (PWC) units in the company’s
current line-up.
Further analysis revealed the attractiveness of the $3 billion worldwide cruiser
segment. Strong demand for cruisers triggered a doubling of sales in this segment from
1993 to 1997; and annual growth was predicted to remain at 11% over the next five
years. Given the overall market size and high profit margin potential, the best entry point
in the motorcycle industry appeared to be for a cruiser positioned competitively between
the cycles produced by Harley-Davidson and Japanese makers. Feasibility of this
expansion plan required capturing only a small share of the market for success.
Competitively, Polaris believed that lengthy delivery delays at industry-giant,
Harley-Davidson, made the competitor’s 54% market share vulnerable to a new product
designed with superior functionality. The company also believed that it would be able to
compete with a lower cost structure. (Refer to the competitor profile of Harley-Davidson
below.)
Disadvantages
Advantages
Harley-Davidson – Competitor Profile
Entrenched world leader in heavyweight segment
One of the most recognized and respected brand names
Brand image of prestige, freedom, individuality
Inimitable intangibles associated with the brand name
Network of 1,000 dealers worldwide
Able to charge premium price for high quality
Market of older, more-experienced riders
1997 sales of $1.75 billion, 30% of the world market
Largest company-sponsored enthusiast organization – 900,000 members
————————————————————————————–Falling behind in innovation
High costs
Unable to meet market demand
Excessive delivery delays
With regard to Japanese motorcycle producers, Polaris discounted the likely threat
from this competitor group primarily because of the importance of being “Americanmade” to much of the market. Only Yamaha’s position in each of the company’s other
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Polaris and Victory
Polaris and Victory:
Entering and Growing the Motorcycle Business
product lines commanded attention from Polaris decision makers. Essentially, Polaris was
certain that offering another American branded product to meet excess domestic demand
would be an advantage over foreign-produced motorcycles. In addition, Polaris believed
it could design and deliver a superior cruiser that would eliminate the common practice of
replacing many components (such as brakes, seats, wheels, vibration-adsorption devices,
frame stiffeners, and intake systems) on their brand-new motorcycles immediately after
purchase.
Even with such strong market potential discovered by the Polaris research team,
the company was taking a big risk in going up against industry powerhouses.
Competition for this segment was daunting. Its iconic rival had few weaknesses and had
risen from the ashes before. Even with clarity that it was making a good decision, Polaris
did not underestimate Harley-Davidson’s status in the American market or the
competitor’s ability to ward off hungry competitors.

In what ways was Polaris successful with the introduction of the Victory product
line? What did the company do wrong?
With experienced researchers, and by drawing from all corners of the industry,
Polaris executed a thorough, methodical, and analytical entry into its new business.
Adding the motorcycle line to its portfolio enabled Polaris to balance seasonal production
cycles for increased operational efficiencies and to expand into a related engine business,
which added potential for an extended product line. In addition to production synergies,
the move also provided cross-selling opportunities to a network of over 2,000 Polaris
dealers.
The company focused on power and handling as key performance areas and
leveraged its strengths in engineering and manufacturing. Design decisions were based on
customer preferences, cost factors, and sourcing considerations. Extensive benchmarking
and testing of competitor products facilitated the development of the stiffest frame of any
cruiser on the market and of an engine with up to 50% more horsepower than any direct
competitor. Polaris orchestrated a high-profile product launch, with hyped media
coverage. Feedback from early prototype demos was incorporated into the final product
design. As a result of these exhaustive efforts, the Victory motorcycle emerged as a classleader in quality, innovation, and style. It was rated the Best Cruiser of 1998 before it was
even available to customers. With higher quality and a competitive price point, Polaris
was able to directly take on Harley-Davidson in the marketplace with early success.
Polaris invested $100 million in the development of the Victory motorcycle. As
cruiser industry sales doubled from 1993 to 1997, the company fully expected to recoup
its investment within three years. However, Polaris entered the market at the tail end of
the expansion period. Consequently, it was 2006 before Polaris turned a profit on the new
line. Sales peaked during 2006-2007 and then fell to 2003 levels. As of 2010, sales levels
had yet to meet Polaris’ expectations. Using the estimates below, sales were still short of
Polaris’ 4,000 unit breakeven point and were failing to meet the company’s targeted goal
of capturing 5% (or $150 million) of the estimated global market.
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Polaris and Victory
Polaris and Victory:
Entering and Growing the Motorcycle Business
2010 Sales (from Exh. 1)
Average Retail Price (from Exh. 3)
Estimated Units Sold
$60.1 million*
$17,834
3,370 units
(*This figure may include parts, clothing, and accessories, which would slightly
distort, or overstate, the calculation.)
Despite its product successes and an effective strategy to overcome entry barriers,
hindsight reveals some hitches in Polaris’ market approach.
o No market remains static, and Polaris failed to consider the competitors’
responses to Victory’s arrival in the industry. Vigorous retaliation can be expected
when existing firms have a major stake in the industry and substantial resources to
support strategic or tactical moves. The company also failed to anticipate that
other new entrants would be attracted to the same growing demand for the cruiser
segment of the market that Polaris had identified. The company had done its
homework, but it is possible that it was too comfortable with its choices to
identify imminent competitor reactions or to prepare for unanticipated threats.
o Pursuing the on-road cruiser segment of the motorcycle market rather than the
sports bike segment was inconsistent with Polaris’ portfolio of recreational
vehicles designed for off-road adventures on alternative terrains. While the
research team sought initial input from Polaris customers, it ended up building a
bike for a different market. There was a portion of Polaris owners who were
interested in the Victory motorcycle, but it appears that this narrow segment
quickly tapped out.
o Over-reliance on the company’s existing distribution model (which was more
suited to sports bikes) led to missed opportunities to attract on-road customers and
to build name recognition beyond the Polaris community. Essentially, exclusive
use of Polaris dealerships to sell Victory motorcycles reduced the effectiveness of
the company’s marketing and distribution plan and prevented the company from
realizing the product’s full potential from the outset.
o By selecting a higher-end of the cruiser market, Polaris was basically targeting the
mature hard-core enthusiast with disposable income. This pitted the company in
direct competition for Harley-Davidson’s base of older, more experienced riders.
Long-term success required that the company break the competitor’s strong hold
on the cruiser segment. Alternatively, the company might have found a niche
where it did not go head-to-head with the powerful competitor. Or, it may have
selected a younger market, with a longer growth outlook and greater potential to
capture lifetime brand loyalties.
o Polaris may have misjudged the importance of American branding for the
heavyweight cruiser market. It certainly miscalculated the ability of Japanese
products to remain entrenched in the marketplace. And it underestimated Honda’s
position as the world’s largest producer of motorcycles.
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Polaris and Victory
Polaris and Victory:
Entering and Growing the Motorcycle Business

15 years after entering the industry, describe current market conditions facing
Polaris. How have competitors responded to Polaris and Victory; and what
prominent competitive threats presently exist?
Since its inception, Victory has had a steady release of innovative and forwardstyled cruisers. To enhance brand recognition in the heavyweight segment, expand into a
larger spectrum of the motorcycle market, and fuel growth, the company has acquired,
integrated, and re-launched the legendary Indian Motorcycles brand, grown international
sales, acquired partial ownership of Brammo for access to electric power-train and
battery-pack technologies, entered a joint venture with Eicher Motors to market bikes in
India, surprised the market by announcing the bold, new Slingshot roadster, and
announced its first electric motorcycle, the Victory Charger. Victory has experienced
strong sales growth and financial performance in recent years; but the game is changing,
and competition is coming on strong. To determine if the company can continue to
compete against Harley-Davidson, Japanese giants, and energetic new motorcycle
companies, an assessment of current market conditions and growth opportunities is
warranted.
Industry sales have rebounded since 2009, but competition is intense – more
intense than when Polaris entered the market. Out of its major competitors, HarleyDavidson is Victory’s closest rival. A powerhouse in the high-margin cruiser category,
Harley-Davidson is fighting against industry participants chipping away at its hold on the
segment. By 2010, the company’s sales volume and dollars had fallen to 2001 levels. Its
sales also peaked in 2006, and the company cut production by 1/3 from 2008 to 2009.
Harley-Davidson has also discontinued and divested product lines and pressured labor
unions for concessions – further efforts to confront market realities. Now that supply has
caught up with demand, delivery delays are no longer a black mark against the company.
But, its riders are aging, and younger riders are less attracted to the Harley-Davidson
brand. The rival, however, is no stranger to tough times and intense competition. It is not
a company to give up market share without a considered response, and the ability to
reinvent the brand and revive growth is always a possibility. Despite its struggles,
Harley-Davidson has announced two new models aimed at growth beyond the
heavyweight motorcycle segment: a new electric motorcycle, the Live Wire, touted for its
speed and quiet motor, and a new smaller bike, the Street 750, designed for the enormous
Asian market.
As noted previously, Polaris did not adequately anticipate competitive retaliation
to its entry into the cruiser market. Japanese motorcycle manufacturers responded to
Victory by quietly and deliberately making product improvements of their own and by
increasing their presence in the heavyweight segment. In 2009, their bikes were as
popular as ever, and the Japanese producers are showing no signs of retreat. Honda, in
particular, retains its status as the largest manufacturer of motorcycles in the world and
offers an extensive line, with a bike placed at every point in the product spectrum. Its
scope and experience makes the competitor especially formidable.
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Polaris and Victory
Polaris and Victory:
Entering and Growing the Motorcycle Business
Throughout the industry, eager competitors have fostered the formation of many
niches in the heavyweight and other motorcycle segments since Polaris entered the
market. There are 77 sellers of new big twin cycles and numerous custom and touring
producers. American brands have been revitalized. European bike companies, like
Triumph and Norton, are creating interesting and exciting new motorcycle models. (The
British Triumph was the fastest growing motorcycle brand in terms of 2010 sales.) Car
companies, like Lotus and Catheram, are entering the motorcycle market. BMW also
entered the low-slung cruiser market to take on Harley-Davidson; and it is second only to
Harley-Davidson in market share for the heavyweight/cruiser segment. This high-quality
maker, backed by strong engineering and extremely high performance features,
commands a whopping 40% price premium for its bikes. Custom makers also present a
credible threat. Although they charge higher retail prices, they are able to absorb higher
production costs. And narrowing the delivery window, custom bike producer, Big Dog,
takes only 60 days to turn out product and is price competitive with mass producers.
Moreover, the market is peppered with entrepreneurial entrants, like Zero Motorcycles,
who is gaining attention with its electric dirt bikes. Electric powered engines is a new
category being targeted by large rivals with sufficient resources to shape and capture the
emerging segment. In this budding category, Harley-Davidson, BMW, Tesla, and
Daimler all have motorcycle models in development. (Note that three of these companies
are automobile makers.)
Finally, the ranking of shopper satisfaction with dealerships in Exhibit 6 is an
indication of a service factor that is not aligned with the company’s premium product
strategy. In fact, it is somewhat alarming that Victory is ranked just barely above the
industry average. The company trails Harley-Davidson, BMW, Ducati, and Triumph.
Even the Indian brand ranks slightly higher than Victory, but also follows Harley, BMW,
and Ducati.
STRATEGY

How do today’s conditions affect the company’s strategic decisions for Victory’s
next decade in the marketplace?
Today, Victory has a complete line of premium cruiser and touring motorcycles.
The division is well-managed, and its products are well-received. Th …
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