Piaggio-Mp3

I. Executive summary

Since the foundation by Rinaldo Piaggio in 1884 the core of the business at Piaggio Group, has been the focus on creativity and innovation. These values have been maintained until today, enriched by a mix of accessibility, freedom, differentiation and equilibrium, which distinguishes all motorcycles, scooters and moped produced by the company and its owned brands. A new scenario of mobility has been created- nowadays together with the increased need of security on the streets, forcing the motor vehicles industry to develop new ideas to satisfy customers’ needs.

Piaggio’s mission manages to combine innovation with traditional values and created new concepts of motion. This takes best evidence in the newborn three-wheeled scooter MP3, the revolutionary milestone granting active safety in urban mobility.

II. Environmental analysis

A. The marketing environment

1. Competitive forces. Piaggio ranks as one of the world’s top four players in its core business. It has consolidated leadership in the European 2-wheel motor vehicles, even though Piaggio should not underestimate its competitors. Competition in the industry is very strong, not only nationally but internationally as well. This is due to two well-established companies in this sector: the Japanese Yamaha and Honda. Their strengths are their long-run experience in the sector and the high quality image of products. Thanks to participations to the motorcycle championships, these companies constantly receive positive feedbacks to their efforts in researching for first class products.

In the future, other kinds of competitors are expected to arise: Chinese companies whose ability to emulate and produce similar products at a highly competitive prices is getting more and more dangerous.

2. Economic forces. Looking at some statistics referred to the first four months of 2007, an increase of + 10,2% has been registered with respect to the past year. Especially the scooter market is showing a drastic increase in numbers of new matriculated vehicles; during year 2006 63,2% of the total were scooters. Only in April 2007, there has been a growth of 13,2% with respect to April 2006. The medium high cylinder capacity segment is the one showing highest growth. These data show the great economic potential of the scooter market reflecting needs, willingness but also the purchasing power consumers detain.

A particular case is represented by the Asiatic market, which documents an increase in sales volume and interest in the motorcycle industry.

3. Political forces. There are no expected political influences or events that could affect the political operations and transactions at Piaggio. The most recent fact that sees Piaggio concerned in political decisions goes back to June 2006.The firm needed new capitals so Unions and Customers suggested that the quotation should be changed from an IPO to an OPS with the intervention of the Government and Consob (given that a lot of the support to the company comes from the public sector)

4. Legal and regulatory forces. The past decade shows an increase in the mobility never seen before. Naturally, this leads to greater risks for the motorists and every other type of riders. The regulation became stricter on this matter, forcing everyone to reconsider his or her driving behaviour. The institutional focus on security suggests the motor industry to give a great attention on the subject too.

5. Technological forces. Piaggio is strongly committed to ongoing improvement of the innovative safety systems (braking systems, suspension, and electronic control) maintaining at the same time comfort and design. The possibilities offered by the development of new technologies represented a great potential in the last decade and the company explolited them all to reach the top in the motor industry.

6. Sociocultural forces. The increase in mobility and number of vehicles (4-wheels but especially 2-wheels vehicles) increased dramatically the number of deaths and injured caused by street accidents. Society is becoming aware that stricter regulations can help on this matter but this is not enough. Therefore, the need of vehicles that offers more protection and security features represent a new challenging opportunity for our industry. Companies such as Piaggio should create a network of customers aware of dangers they can incur while riding their motorbike. Offering a product that can help reducing the risks Piaggio can have an important impact on the market. Often accidents are not only caused by some misbehaviour of the rider but bad streets and climate conditions can give a great contribution, too. (Moreover, these factors can be the starting point for the characteristics of future vehicles.)