British Motorcycle Crossroads – What NVT should do?
The purpose of this document is to offer strategic alternatives to the management of NVT and to make a recommendation on how best to earn a return on capital. A number of strategies were explored including re-entering the low displacement market segment with a high volume approach. This was not pursued further due to the saturation of that market segment by Japanese manufacturers. Our recommended strategy is to maximise NVT’s strengths by focusing on premium quality finish and elegant style in the medium and high displacement class market segments. In addition, to reduce unit production costs by improving operations and supply chain management.
British motorcycles traditionally had a reputation for premium quality finish, elegant styling, and high performance. Although performance has slipped in recent years NVT maintains a loyal customer base. NVT should reaffirm their position as a premium brand in the medium and high displacement market segments as these market segments have demonstrated the largest growth in recent years and offer the highest value per unit.
Market research and an analysis of the competitive disadvantage of NVT with respect to Honda highlighted some key focus areas for NVT. The main competitive disadvantage of NVT compared to Honda in the 750cc range is the total cost per unit (72% higher), i.e. NVT require a higher retail price to achieve a profit. This is compounded by the low number of units sold per annum by NVT (13.9k) compared to Honda (433k) and other competitors.
To reduce costs, design and production processes need to be modernised and standardised, with the supply chain aligned to this strategy. In the immediate term, quality control procedures should be introduced to eliminate the current mechanical problems. An R&D team must be established to improve product performance and