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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Executive Summary

The discussion below is about Piaggio International Company, which is found in Italy based in Pontedera by Rinaldo Piaggio in 1884. Piaggio has subsidiary branches, both locally and internationally. It involves its population in terms of the number of its sales point location, and the profits it has been obtaining for previous few years. Furthermore, strategic decisions for the company are considered to be deliberates as well as the adopted means in achieving of the strategy.  The discussion also involves the transformed and transforming resources used in production of motors, bikes, and scooters. Moreover, it involves the concept of its quality, price, dependability, flexibility and speed, and how they are related to the competitiveness and operation of the firm. In case of changing or introducing a new product in the firm, the discussion of the process for designing the product is also available. The company's revenue is around 1,342.4 Million Euros according to its official site.

Piaggio Company

Introduction

 Since the Second World War, Piaggio has spearheaded the portability transformation, moving forward the quality of life of Italians and other Europeans. The company targets the younger age group and therefore, designs its products differently in their concern. The designs are produced and designed accordingly to its customer demographics, making the outcome more hip and trendy to fit its market. For Instance, half of Vespa consumers are women. . Currently, Piaggio is recognized globally as one of the most prosperous lifestyle and motor vehicle manufacturer. Piaggio is known as flexibility in lifestyle. It offers total run of unique and brilliantly arrangements for metropolitan mobility. Piaggio offers advanced mobility arrangements with rich and distinctive style. It is the fourth largest producer of scooters and motorcycles. Piaggio produces more than 600,000 vehicles annually more than 6700 employees and operations in over 50 countries.

I. Analyze Piaggio's overall operations strategy on the basis of Key Performance Indicators.

Piaggio's main market is 2-Wheeler market. This wheeler market has approximately 232.3 millions circulating vehicles worldwide. Piaggio's main market regions are Europe, Emerging Asia and the US. Piaggio has main competitors from motorcycles.

Piaggio Group, first of all, aims to create value by receiving technique by; consolidates its guidance position on the European two-wheeler market and on the Indian light.  Commercial vehicles market:

• Increments its proximity on universal markets, with specific reference to the Asian area.

• Increment within the working effectiveness of all company forms with a concentrate on industrial productivity.

Performance Indicators are important for evaluating the effectiveness of the measures enforced. In three years; Piaggio will amplified a series of key factor indicators such as;

• Training on human rights (and trendy slavery and human trafficking issues);

 Open whistleblowing procedures on human rights;

 Variety of investigations applied following whistleblowing issues on human rights;

 share / overall variety of audits on the availability chain regarding human rights and variety of cases of non-compliance on such problems.

• Analyze basic Piaggio's financials (revenues and profits) per line of business as well as per geographical area. Briefly review Piaggio's Corporate and SBU Strategy

Piaggio has an international business plan because the company has different financial revenues and profits per every different part of business area for this reason values always change for the environment area. “With regard to the geographical regions in which the Piaggio Group operates, the Plan presented today foresees a small upturn on the European market for two-wheel motor vehicles, where demand fell by more than half from 2007 to 2013 (an increase to 1.3 million shipments in 2017, from 1.1 million in 2013 and 1.2 million projected for the current year); continued growth in the sector in India, the top two-wheeler market in the world today, with a 2014-2017 improvement from 15.2 million shipments to 18.3 million; a small increase in the ASEAN 5 area (from 14.1 million two-wheeler shipments in 2014 to 14.7 million in 2017) and the other Asia-Pacific markets (from 1.3 to 1.4 million shipments over the period of the plan). Performance in the two-wheeler sector is expected to be substantially stable in China (12.9 million shipments/year), Latin America (3 million shipments/year) and the USA (500,000 shipments/year), while interesting progress is forecast in Africa (from 1.5 million shipments in 2013, to 1.7 million in 2014, and 2.2 million” (piaggio group:2014-2017 business plan/piaggiogroup.com). The demand ratios are different for the environment because every place has different needs culture and population. These circumstances reflect to the financial revenues and profits. Therefore, India has key location for their business strategies because they also do manufacturing and sell every segment of motorcycle for the customer” In India – also a key production hub for 3- and 4-wheel light commercial vehicles – the 2014-2017 Business Plan aims to consolidate Piaggio's positioning as the reference player on the local three-wheeler market and to enhance its presence in four-wheel commercial vehicles in the one-ton and up to 0.5 ton segments; this will be achieved in part by targeting the current customer base for Piaggio three-wheel vehicles and the extensive distribution network already in place. Full advantage will also be taken of all export opportunities for vehicles manufactured in India (piaggio group business plan 2014-2017)”. Actually we can say piaggio is a global company because the company include too many countries for business. They produce motorcycles in India serve them the another neighbour country like China, Thailand, Malaysia so we can say that The Piaggio group is supporting their operations and global communication they still continue to grow up in the world and they have huge place in business market of the world.

Explain what the terms “volume, variety, variation in demand and visibility” mean in the context of operations and competitiveness at Piaggio.

Volume: A Making motorcycle is a low volume operation that leads to high unit costs. Employees perform more than one task.  Companies with low-volume operations use highly trained employees, general-purpose equipment, and a process layout like Piaggio's Vespa.

Variety: In Piaggio company the variety is high because there is more flexibility to produce goods and services to match customer's requirements in terms of choosing motorcycles and bikes in Piaggio Company that leads to higher costs.

Variation in demand: Piaggio Company mostly preferred in European, Indian and Asian countries. In these countries, especially in Italy is very appropriate for using motorcycles so, variation in demand is very high with lower volumes and products and higher unit costs.

Visibility: In general manufacturing industry has little to no visibility to its customers but Piaggio Company has high visibility in order to achieve customer's actually experience. In this company there is a high degree of customer contact skill.

• Discuss the concept of “operations function” and describe core and support function workings at Piaggio.

The Piaggio Group has a different type of functions and business units for their manufacturing. First of all, they criticize global presence because they have to show the Italian style and design for their customers because they have large mass of customer for that reason they have to think all of the world when they decide their operations. All operations have a different center in the world because company wants to use the environment advantages for their operations.” The Piaggio group headquarter is in Pontedera. Vespa and the majority of Piaggio brands for the European market are produced in Italy, where Piaggio also has a technical center for development of motorcycles in Noale. International operations are basically done in Baramati(India). Where Piaggio produces vehicles for the Indian Market and for export and in Vietnam where it produces for the local market and the Asia-Pacific area. (piaggiogroup slide share).” As we can see Piaggio has a strong corporate strategy because as almost %70 of it revenues comes from the dominant business of vehicles. When they realize these operations get successful in the world, the group has decided to carry on an international operation with the target and improve the profit.

• Suggest ways to increase productivity at Piaggio and critically asses the firms operations in light of their current corporate strategy.

Increasing productivity is not just about manufacturing or financial issues. Marketing is keyword for increasing productivity because 4P is so important for selling these are: people, physical environment, promotion and price. Basically marketing is equal to needs so firstly you have to found your customer needs and expectations. When you found them you have to operate and organize them in 4P also company has to follow innovations and new trends. Nowadays many big manufacturing companies such as BMW and Honda do their operations in these circumstances. As of the Piaggio group is already have some degrees about that also they are planning to join the sharing economy because nowadays this system is so useful for the customer. People use driving or biking applications so much in the last few years for example In Italy CAR2GO or Mobike is such a famous applications. Piaggio will do this type of things for their motorcycles and Vespa's in nearest time because they start to gain money easily also they increase the productivity.

• Conclusion

Piaggio group is become a global company and it has some degrees in the market as we can say true strategies and operations are the most important things in the business world. Piaggio group is using their strong way to become a large famous brand in the world and they always analyze and always doing tests before when they start to produce launch of the actual product also they analyze the customer needs and expectations and they have open mind for new innovations and trends.

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