Piaggio-Vespa

Environmental analysis

Competitive forces:

Italian manufacturer Piaggio ranks as one of the world’s top four players in its core business. It has consolidated leadership in the European 2-wheeler market. Piaggio should not miscalculate its competitors. Competition in the industry is very powerful, not only nationally but internationally as well. This is due to two well-established companies in this sector which are the Japanese Yamaha and Honda. Yamaha and Honda strengths are their long-run experience in the sector and the high quality image of products. Due to participations to the motorcycle championships, these two 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 imitate and create similar products at highly competitive prices is getting more and more dangerous (Piaggio, 2008)

Economic forces

Piaggio is the European leader for motor scooters, with a market share just over 50 percent. Annual production of Piaggio motor scooters exceeds 850,000 vehicles. Looking at some statistics referred to the first four months of 2007, an increase of + 10,7% has been registered with compare to 2006. Especially the scooter market is showing a drastic increase in numbers of new matriculated vehicles; during year 2006 62.1% of the totals 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’ control. A particular case is represented by the Asian market, which documents an increase in sales volume and interest in the motorcycle industry. (Wikipedia, 2008)

Political forces

This European icon and mode of transportation debuted in the U.S. market in the 1950s and was forced to leave the market in the 80’s due to the strict demands of the Environmental Protection Agency (EPA). Before 2000, Vespa had to stop operations in the United States because they failed to meet pollutions standards. Piaggio will need to prove the Environmental Protection Agency that their modern models are emissions-compliant and incredibly fuel-efficient engines. Due to the environmental concerns Piaggio needed to introduce a new small-frame scooter, the LX range. Piaggio is in a better shape now to deal with America's clean-air regulations (Wikipedia (2008).

Furthermore, Piaggio needed new capitals so Unions and Customers suggested that the quotation should be changed from an IPO to OPS with the intervention of the Government and Consob. Consob organizes and runs the Italian regulated markets for equities, bonds, and derivatives (Forbes, 2006)

Legal and regulatory forces

It appears that the history of Vespa motor scooters has led to the United States as the major factor in new innovations and what the consumer wants. A powerful factor affecting the motorized scooter industry is the laws that regulate the use of these vehicles on the streets. The past decade shows an increase in the mobility never seen before. Obviously, this leads to greater risks for the motorists and every other type of riders. The regulation became stricter on this issue, forcing everyone to reconsider his or her driving behaviors. The institutional focus on security suggests the motor industry to give a great attention on the subject too.

In some states a Vespa motor scooters are considered a motorcycle if it has an engine of 150 cc or larger. Many states, motorcycles except those with engines of less than 150cc may not be driven on freeways if there are signs posted prohibiting such vehicles. Some states will require an M1 license and in other states an operator permits in order to operate their Vespa Scooters. For example in California any two-wheel motorcycle or motor-driven cycle will need to hold a class M1 license. Also, a driver and any passenger shall wear a safety helmet when riding on