Polaris and victory motorcycles case study

Polaris Industries, Inc. Polaris Industries, Inc., designed, engineered and manufactured snowmobiles, all terrain recreational and utility vehicles (ATVs), motorcycles and personal watercraft (PWC), on and off-road vehicles, and low emission vehicles; and marketed them, together with related replacement parts, garments and accessories (PG&A) through dealers and distributors principally located in the United States, Canada and Europe under the brand names of Victory, Indian, Ranger, Sportsman, RZR, Switchback, and others. The garment and accessory items included helmets, boots, T-shirts, sweat pants, touring luggage and trailers. The company was widely known as the world’s largest manufacturer of snowmobiles and one of the biggest makers of all-terrain vehicles and personal watercrafts in the United States. In 2013, Polaris Industries employed seven thousand people at eleven manufacturing locations and five research and development centers worldwide. The company had over three thousand dealerships and operated in more than one hundred countries. Polaris produced its first snowmobile in 1954 under cofounder and former CEO Alan Hetteen. Textron, Inc. bought Polaris from its original Roseau, Minnesota ownership group in 1968. Then in 1981, Textron, Inc. sold the Polaris division to a group of private investors led by W. Hall Wendel Jr., a Textron division head. The snowmobile business kept the Roseau, Minnesota plant busy six months out of the year but company managers wanted to figure out how to fill the other six months, so they extensively surveyed their snowmobiler customer base and decided in 1985 to diversify and produce all terrain vehicles (ATVs). The company once again diversified by manufacturing personal watercrafts (PWC) in 1992, and eventually became a world leader in both ATV and PWC production and sales. In 1987 Polaris became a publicly traded company. As a result of its diversification strategy, Polaris was able to manufacture products all year. Snowmobile manufacturing took place in the spring through late autumn or early winter and personal watercraft were manufactured during the fall, winter and spring months. Polaris has had the ability to manufacture ATVs year round since May 1993. ATV production starts in late autumn and continues through early autumn of the following year. Because of the seasonality of the Polaris products and associated production cycles, total employment levels varied throughout the year. Approximately 3,000 individuals were employed by the company. Polaris’ employees have not been represented by a union since July 1982. The company announced layoffs in their Osceola, Wisconsin plant in early 2011 due to the recession. Expansion Into Motorcycles Matt Parks joined Polaris in 1987 as a district sales manager for California, Nevada, and Arizona to develop the dealer network. He was named ATV product manager in 1992 and earned a spot at the company’s headquarters. W. Hall Wendel Jr. asked him to do research on prospective acquisitions or expansions. Parks, with the additional title of general manager of new products, considered such things as go-karts, golf carts, lawn-and-garden products, chain saws, and Hula-Hoops by investigating the various industries in terms of competition, size, level of service, and new trends. Parks and others studied the off-road motorcycle market when two dirt bike companies were put up for sale. Then a European motorcycle company asked to distribute their bikes through Polaris. “That sparked a study of the motorcycle business that uncovered signs of a promising market. Along with the dirt bike research, we did a quick study of the street bike business at that time, and we were kind of interested. We thought, ‘You know, this makes some sense,” recalls Parks. In 1993, Polaris distributed over 300,000 surveys through the company’s Spirit magazine for Polaris vehicle owners to measure the readers’ interest in buying a wide variety of products from Polaris. “Motorcycling did really, really well [in the survey],”