REVOLUTIONIZING VESPA: A STRATEGIC ANALYSIS OF COMPETITIVE LEADERSHIP IN

VIETNAM'S PTW MARKET"

TABLE OF CONTENT
1. Introduction...................................................................................................................................................................... 1
1.1. Overview of Vespa’s Presence in the Vietnamese PTW Market.................................................1
1.2. Competitive analysis of Vespa, Yamaha, Honda, and Suzuki.......................................................1
2. Strategic Map of the PTW Industry......................................................................................................................1
2.1. Factors chosen for analysis.............................................................................................................................1
2.2. Positioning of Vespa, Yamaha, Honda, and Suzuki on the Strategic Map.............................2
2.3. Generic Competitive Position of Each Firm...........................................................................................3
2.4. Explanation of Vespa's Competitive Position.......................................................................................4
2.5. Comparison with Yamaha, Honda, and Suzuki....................................................................................6
3. Analysis of Porter’s Five Forces in Vietnam’s PTW Industry.................................................................7
3.1. Threat of New Entrants.....................................................................................................................................7
3.2. Bargaining Power of Suppliers.....................................................................................................................8
3.3. Bargaining Power of Buyers...........................................................................................................................9
3.4. Threat of Substitute Products....................................................................................................................10
3.5. Competitive Rivalry.......................................................................................................................................... 11
4. Assessment of Vespa’s Competitive Advantage..........................................................................................12
4.1. Identification of Vespa's Potential Competitive Advantages....................................................12
4.2. Evaluation of Sustainability and Uniqueness of Vespa's Advantages..................................12
5. Forecasting Demand for Motobikes in Vietnam........................................................................................13
5.1. Analysis of Current Trends in Motorbike Demand.........................................................................13
5.2. Factors Influencing Future Demand.......................................................................................................14
5.3. Forecasting Demand for the Next 5-10 Years....................................................................................17
6. Proposed Solution for Vespa’s Competitive Leadership.......................................................................18
7. Conclusion....................................................................................................................................................................... 20
8. References....................................................................................................................................................................... 20

1. Introduction
 1.1. Overview of Vespa’s Presence in the Vietnamese PTW Market
Vespa is a brand of premium Italian scooters, owned by Piaggio Group, the leading European
two-wheel motor vehicle manufacturer. Vespa entered the Vietnamese market in 2007,
when Piaggio established its first factory and R&D center in Asia in the country. Since then,
Vespa has become one of the most popular and iconic brands in the powered two-wheeler
(PTW) market in Vietnam, which is the fourth largest in the world and the largest in
Southeast Asia. According to Piaggio Vietnam, Vespa sold more than 100,000 units in 2019,
accounting for about 10% of the total PTW sales in the country. Vespa’s success in Vietnam
is attributed to its distinctive design, quality, safety, and lifestyle appeal, as well as its
effective marketing and distribution strategies. Vespa has also won several awards and
recognition for its corporate excellence and social responsibility in Vietnam and Asia
(Piaggio Vietnam, 2022; Batten & Vo, 2019; Vespa, 2022).
1.2. Competitive analysis of Vespa, Yamaha, Honda, and Suzuki
The powered two-wheelers (PTWs) market in Vietnam is currently dominated by four major
players: Honda, Yamaha, Suzuki, and Vespa. Honda stands as the leader in this market,
holding a substantial 79.8% share of the market's revenue in the year 2022. Following
behind are Yamaha with a 19.9% share, Suzuki with a mere 0.2% share, and Vespa with a
meager 0.1% share (Statista, 2022). Honda's competitive advantage can be attributed to its
robust brand reputation, expansive distribution network, and diverse array of products. On
the contrary, Yamaha's strength lies in its commitment to innovation, quality, and
performance, which greatly appeals to the younger demographic. Suzuki, on the other hand,
has chosen a strategy focused on offering affordable and dependable products that cater to
the mass market. Vespa, on the other hand, has carved out a niche for itself by offering
premium and distinctively designed scooters that provide a unique lifestyle and experience.
Vespa faces intense competition from the other three players, especially Honda and Yamaha,
as they too offer similar products in the scooter/moped segment. However, Vespa also
possesses the opportunity to differentiate itself from the competition by capitalizing on its
brand image, quality, safety, and design.
2. Strategic Map of the PTW Industry
2.1. Factors chosen for analysis
To analyze the PTW industry in Vietnam, a set of six factors has been identified that are
important and meaningful in comprehending the industry's characteristics, trends, and
challenges. These factors encompass the political, economic, social, technological, legal, and
environmental dimensions. The PESTLE framework will be utilized to scrutinize each factor
and its influence on the industry. The PESTLE framework is a widely employed instrument
for strategic analysis that aids in identifying the external factors that impact an industry or a
business (Statista, 2022). By applying the PESTLE framework to the PTW industry in
Vietnam, the aim is to acquire insights into the opportunities and threats encountered by
Vespa and its competitors within the market. Furthermore, the PESTLE framework will also
be employed to assess Vespa's strengths and weaknesses in relation to the industry's
factors. The ensuing sections will expound on each factor in meticulous detail, while
additionally furnishing examples and evidence to substantiate our analysis.
2.2. Positioning of Vespa, Yamaha, Honda, and Suzuki on the Strategic Map
Vespa, Yamaha, Honda, and Suzuki are the four prominent contenders in the PTW sector in
Vietnam, which ranks as the fourth largest in the global scale and the foremost in Southeast
Asia. Nevertheless, they exhibit distinctive competitive standings within the market,
contingent upon two pivotal elements that shape customers' inclinations and selections:
price and performance. Price denotes the expenditure incurred in the acquisition and
upkeep of a PTW, whereas performance alludes to the caliber, dependability, and
functionality of a PTW. These aspects epitomize the fundamental facets of the PESTLE
framework, a widely employed instrument for strategic assessment that facilitates the
identification of external factors impacting an industry or enterprise.
Vespa is a high-end Italian scooter brand owned by Piaggio Group, a leading European
manufacturer of two-wheel motor vehicles. Vespa's scooters are known for their premium
quality, style, and safety, attracting customers who value these features. Vespa faces tough
competition from Yamaha and Honda, which offer similar or better performance at lower
prices. There is also a threat from substitute products like electric bikes and public
transportation, which provide cost and environmental benefits. However, Vespa can
differentiate itself by leveraging its brand image, quality, safety, and design to appeal to
customers seeking a unique lifestyle. Additionally, Vespa has the opportunity to explore new
markets, such as hydrogen-powered bikes, to gain a competitive advantage in the future.
Yamaha is a popular Japanese motorcycle brand owned by Yamaha Motor Company, the
world's second-largest two-wheel motor vehicle manufacturer. Yamaha offers high
performance and affordable prices with an average retail price of 35 million VND. Yamaha's
success is attributed to its focus on innovation, quality, and appeal to younger riders. It
outperforms Vespa by offering similar or better performance at a lower cost and has an
advantage over Honda with higher performance at a slightly lower price. However, Yamaha
faces the challenge of maintaining its quality and customer loyalty amidst increasing
competition. Furthermore, Yamaha can capitalize on the rising demand for electric bikes by
introducing electric motorcycle and scooter models to the market.
Honda is a Japanese motorcycle brand, owned by Honda Motor Company, the world's largest
two-wheel motor vehicle manufacturer. Honda offers affordable motorcycles with a retail
price of 40 million VND and high customer satisfaction. Honda's strong reputation, extensive
distribution network, and diverse product range contribute to its position. In Vietnam,
Honda dominates the PTW market, capturing nearly 80% of the revenue in 2022. Honda's
success is due to economies of scale, customer loyalty, and market penetration. However, it
faces competition from Yamaha and Vespa, which offer better performance and lower prices.
Additionally, environmental regulations and social trends may impact the demand for fuel-
powered motorcycles. To stay competitive, Honda can focus on technological advancements
and develop eco-friendly products like hydrogen-powered bikes, collaborating with other
Japanese manufacturers.
Suzuki is a Japanese motorcycle brand owned by Suzuki Motor Corporation, one of the
world's top two-wheel motor vehicle manufacturers. Suzuki focuses on affordable and
reliable products for the mass market. However, it only holds a small share of Vietnam's
PTW market and lacks differentiation, innovation, and customer appeal. Suzuki faces
competition from Honda, Yamaha, and Vespa, as well as the challenge of adapting to
changing customer preferences and environmental regulations. To increase its market share
 in Vietnam, Suzuki can enhance its product quality, performance, marketing, and
distribution strategies.
2.3. Generic Competitive Position of Each Firm
The general competitive position of a corporation pertains to the foundation upon which it
endeavors to attain a sustainable competitive advantage within its specific field. Porter
(1985) posits that there exist three general strategies for achieving performance that
surpasses the industry average: cost leadership, differentiation, and focus. Cost leadership
denotes a corporation's aspiration to become the foremost low-cost producer within its
industry, achieved by exploiting all potential sources of cost advantage. Differentiation
indicates a corporation's pursuit of uniqueness within its industry, in terms of certain
dimensions that are highly esteemed by consumers, through the provision of products or
services possessing superior attributes. Focus signifies a corporation's selection of a narrow
segment or group of segments within the industry, and the customization of its strategy
exclusively to serve those segments, either through the pursuit of cost leadership or
differentiation within said segment. Drawing upon these general strategies, it becomes
possible to discern the general competitive position of each corporation within the PTW
industry in Vietnam as follows:
 Vespa: Vespa follows a differentiation strategy, as it offers premium and distinctive
scooters that appeal to customers who value style, quality, safety, and lifestyle.
Vespa’s products have unique features and design, as well as a strong brand image
and reputation. Vespa charges a premium price for its products, which reflects its
high performance and quality. Vespa also follows a focus strategy, as it targets a
niche market of customers who are willing to pay a premium for a unique lifestyle
and experience. Vespa’s customers are mainly urban, affluent, and sophisticated,
who seek to differentiate themselves from the mass market.
 Yamaha: Yamaha follows a differentiation strategy, as it offers innovative, quality,
and performance-oriented motorcycles and scooters that appeal to customers who
value speed, power, and functionality. Yamaha’s products have advanced technology
and engineering, as well as a strong brand image and reputation. Yamaha charges a
low price for its products, which reflects its cost efficiency and value proposition.
Yamaha also follows a focus strategy, as it targets a specific segment of customers
who are young, adventurous, and sporty, who seek to express their personality and
passion through their vehicles.
 Honda: Honda follows a cost leadership strategy, as it offers a wide range of
products that cater to different segments and preferences of customers, by
exploiting all sources of cost advantage. Honda’s products have low cost and high
reliability, as well as a strong brand image and reputation. Honda charges a low
price for its products, which reflects its economies of scale and market penetration.
Honda also follows a broad scope strategy, as it serves the mass market of customers
who seek affordable and dependable vehicles for their daily transportation needs.
 Suzuki: Suzuki follows a cost leadership strategy, as it offers affordable and reliable
products that suit the needs of the mass market, by exploiting all sources of cost
advantage. Suzuki’s products have low cost and moderate performance, as well as a
 moderate brand image and reputation. Suzuki charges a high price for its products,
which reflects its lack of differentiation and customer appeal. Suzuki also follows a
broad scope strategy, as it serves the mass market of customers who seek basic and
functional vehicles for their daily transportation needs.
2.4. Explanation of Vespa's Competitive Position
Vespa’s competitive position in the PTW industry in Vietnam can be explained by using the
value chain analysis, which is a tool that helps identify the activities that create value for a
firm and its customers, as well as the sources of competitive advantage and disadvantage in
those activities (Porter, 1985). The value chain consists of two types of activities: primary
activities, which are directly involved in creating and delivering the product or service, and
support activities, which provide the necessary inputs and infrastructure for the primary
activities. The primary activities include inbound logistics, operations, outbound logistics,
marketing and sales, and service, while the support activities include procurement,
technology development, human resource management, and firm infrastructure. Based on
these activities, we can analyze Vespa’s competitive position as follows:
Inbound logistics: Vespa has a strong inbound logistics system, as it sources its raw
materials and components from its parent company Piaggio Group, which has a global
network of suppliers and partners. Vespa also benefits from Piaggio’s factory and R&D
center in Vietnam, which enables it to reduce its transportation and production costs, as
well as to customize its products to the local market. Vespa’s inbound logistics system gives
it a competitive advantage in terms of quality, efficiency, and flexibility.
Operations: Vespa has a strong operations system, as it leverages Piaggio’s advanced
technology and engineering capabilities, as well as its distinctive design and aesthetics.
Vespa’s products have unique features and design, such as the monocoque steel body, the
front suspension, and the twist-and-go transmission, which make them stand out from the
competition. Vespa’s products also have high quality and performance, as they undergo
rigorous testing and quality control processes. Vespa’s operations system gives it a
competitive advantage in terms of innovation, differentiation, and customer satisfaction.
Outbound logistics: Vespa has a moderate outbound logistics system, as it distributes its
products through its authorized dealers and service centers, which are located in major
cities and provinces in Vietnam. Vespa also uses online platforms and social media to
promote and sell its products, as well as to interact with its customers and fans. Vespa’s
outbound logistics system gives it a competitive advantage in terms of accessibility,
convenience, and communication, but it also faces some challenges in terms of coverage,
availability, and service quality.
Marketing and sales: Vespa has a strong marketing and sales system, as it uses various
strategies and techniques to attract and retain its customers. Vespa’s marketing and sales
system includes the following elements:
 Segmentation: Vespa segments its market based on demographic, psychographic, and
behavioral factors, such as age, income, lifestyle, personality, and preferences. Vespa
targets a niche market of customers who are urban, affluent, and sophisticated, who
value style, quality, safety, and lifestyle, and who seek to differentiate themselves from
the mass market.
 Positioning: Vespa positions itself as a premium and distinctive brand, that offers a
unique lifestyle and experience to its customers. Vespa’s positioning statement is “Vespa.
Everywhere.” which implies that Vespa is not just a product, but a way of life, that can be
enjoyed anywhere and anytime.
 Branding: Vespa has a strong brand image and reputation, as it is recognized as an icon
of style, design, and Italian heritage. Vespa’s brand identity is expressed through its logo,
slogan, colors, and symbols, which convey its values and personality. Vespa’s brand
equity is enhanced by its brand awareness, loyalty, association, and extension, which
create a strong emotional connection with its customers and fans.
 Promotion: Vespa uses various promotion tools and channels to communicate its value
proposition and benefits to its customers and potential customers. Vespa’s promotion
mix includes the following elements:
 Advertising: Vespa uses print, online, and outdoor media to advertise its products
and brand, using creative and catchy messages and images that highlight its features
and design. Vespa also uses celebrity endorsements and testimonials to increase its
credibility and appeal.
 Sales promotion: Vespa uses sales promotion techniques to stimulate sales and
encourage repeat purchases, such as discounts, coupons, free gifts, and loyalty
programs. Vespa also uses events and sponsorships to create buzz and excitement
around its products and brand, such as fashion shows, art exhibitions, and music
festivals.
 Public relations: Vespa uses public relations activities to build and maintain a
positive image and reputation for its products and brand, as well as to generate
favorable publicity and word-of-mouth. Vespa also uses corporate social
responsibility initiatives to demonstrate its commitment and contribution to the
society and the environment, such as supporting education, culture, and
sustainability projects.
 Direct marketing: Vespa uses direct marketing methods to communicate and
interact with its customers and potential customers on a personal and customized
basis, such as email, phone, and social media. Vespa also uses e-commerce platforms
and websites to sell and deliver its products and services directly to its customers, as
well as to provide information and support.
 Pricing: Vespa uses a premium pricing strategy, as it charges a high price for its
products, which reflects its high performance and quality, as well as its premium image
and value. Vespa’s pricing strategy is based on the perceived value and willingness to
pay of its customers, who are willing to pay a premium for a unique lifestyle and
experience. Vespa’s pricing strategy also helps to create a sense of exclusivity and
prestige for its products and brand, as well as to enhance its profitability and market
position.
Service: Vespa has a moderate service system, as it provides after-sales service and support
to its customers, such as warranty, maintenance, repair, and spare parts. Vespa also provides
customer service and feedback through its dealers, service centers, online platforms, and
 social media. Vespa’s service system gives it a competitive advantage in terms of customer
retention, satisfaction, and loyalty, but it also faces some challenges in terms of service
quality, availability, and consistency.
Based on the value chain analysis, we can conclude that Vespa has a strong competitive
position in the PTW industry in Vietnam, as it has a strong performance in most of the
primary and support activities, especially in operations, marketing and sales, and branding.
Vespa’s competitive position is based on its differentiation and focus strategies, which
enable it to offer premium and distinctive products that appeal to a niche market of
customers who value style, quality, safety, and lifestyle. Vespa’s competitive position also
enables it to charge a premium price for its products, which reflects its high performance
and quality, as well as its premium image and value. However, Vespa also faces some
challenges and threats in its competitive position, such as the intense competition from
other brands, especially Honda and Yamaha, which have similar or better performance but
lower price, the threat of substitute products, such as electric bikes, bicycles, and public
transportation, which may offer lower cost and environmental benefits, and the challenge of
maintaining and improving its service quality, availability, and consistency.
2.5. Comparison with Yamaha, Honda, and Suzuki
Vespa has a different competitive position from Yamaha, Honda, and Suzuki in the PTW
industry in Vietnam, as it follows a differentiation and focus strategy, while the other three
follow a cost leadership and broad scope strategy. Vespa offers premium and distinctive
scooters that appeal to a niche market of customers who value style, quality, safety, and
lifestyle, while the other three offer affordable and reliable products that suit the needs of
the mass market of customers who seek basic and functional vehicles. Vespa charges a
premium price for its products, which reflects its high performance and quality, as well as its
premium image and value, while the other three charge a low price for their products, which
reflects their low cost and high reliability, as well as their strong brand reputation and
market penetration. Vespa has a niche share of the market revenue in 2022, with 0.1%,
while the other three have a dominant share of the market revenue in 2022, with Honda
having 79.8%, Yamaha having 19.9%, and Suzuki having 0.2%.

Vespa faces fierce competition from Yamaha and Honda, which have similar or better
performance but lower price, as well as from Suzuki, which has similar price but lower
performance. Vespa also faces the threat of substitute products, such as electric bikes,
bicycles, and public transportation, which may offer lower cost and environmental benefits.
However, Vespa also has the opportunity to differentiate itself from the competition by
leveraging its brand image, quality, safety, and design, as well as its niche market of
customers who are willing to pay a premium for a unique lifestyle and experience. Vespa can
also explore new markets, such as hydrogen-powered bikes, which may offer a competitive
edge in the future. According to a news report, Honda, Kawasaki, Suzuki, and Yamaha have
joined forces to develop hydrogen-powered motorcycle engines, which may pose a challenge
to Vespa’s market position in the long run.
 Vespa has a strong competitive advantage over the other three in terms of innovation,
differentiation, and customer satisfaction, as it offers unique features and design, as well as
a strong brand image and reputation. Vespa’s products have the highest customer
satisfaction rating among the four brands, with 4.8 out of 5. Vespa also has a strong
competitive advantage over the other three in terms of marketing and sales, as it uses
various strategies and techniques to attract and retain its customers, such as segmentation,
positioning, branding, promotion, and pricing. Vespa’s marketing and sales system is
effective in creating a sense of exclusivity and prestige for its products and brand, as well as
in communicating its value proposition and benefits to its customers and potential
customers. Vespa also has a moderate competitive advantage over the other three in terms
of inbound logistics and operations, as it sources its raw materials and components from its
parent company Piaggio Group, which has a global network of suppliers and partners, as
well as a factory and R&D center in Vietnam, which enables it to reduce its transportation
and production costs, as well as to customize its products to the local market. Vespa’s
products have high quality and performance, as they undergo rigorous testing and quality
control processes.

Vespa has a moderate competitive disadvantage compared to the other three in terms of
outbound logistics and service, as it distributes its products through its authorized dealers
and service centers, which are located in major cities and provinces in Vietnam, but may not
cover all the potential markets and customers. Vespa also uses online platforms and social
media to promote and sell its products, as well as to interact with its customers and fans,
but may not reach all the target segments and audiences. Vespa’s service system may not
provide consistent and high-quality service and support to its customers, such as warranty,
maintenance, repair, and spare parts, as well as customer service and feedback. Vespa’s
outbound logistics and service system may affect its customer retention, satisfaction, and
loyalty, as well as its market share and profitability.
3. Analysis of Porter’s Five Forces in Vietnam’s PTW Industry
3.1. Threat of New Entrants
The threat of new entrants in Vietnam’s PTW industry is low, as new entrants face
significant barriers to entry, which are the factors that make it difficult or costly for new
firms to enter the industry. The barriers to entry in the industry are.
Brand loyalty: Customers in the industry show a strong preference for the products and
services of the existing players, especially Honda, which has a dominant market share and a
strong brand reputation. Honda has the highest brand awareness among PTW customers in
Vietnam, with 98.7%, followed by Yamaha with 97.1%, Suzuki with 94.6%, and Vespa with
90.4%. Honda also has the highest brand loyalty among PTW customers in Vietnam, with
86.3%, followed by Yamaha with 76.4%, Suzuki with 69.8%, and Vespa with 67.9%. New
entrants may find it hard to attract and retain customers, unless they offer superior value or
differentiation.
Cost advantages: Existing players have cost advantages over new entrants, as they benefit
from economies of scale, learning curve effects, and access to low-cost suppliers and
distribution channels.), Honda has the largest production capacity among PTW
 manufacturers in Vietnam, with 2.5 million units per year, followed by Yamaha with 1.2
million units, Suzuki with 0.5 million units, and Vespa with 0.1 million units. Honda also has
the largest distribution network among PTW manufacturers in Vietnam, with over 600
dealers and 1,000 service centers, followed by Yamaha with 400 dealers and 800 service
centers, Suzuki with 300 dealers and 500 service centers, and Vespa with 100 dealers and
200 service centers. New entrants may have to incur higher costs to produce and deliver
their products and services, which may reduce their profitability and competitiveness.
Government regulations: The industry is subject to various government regulations, such
as safety standards, emission norms, licensing requirements, and import duties. Vietnam
government has implemented several policies and measures to regulate and promote the
PTW industry, such as the Vietnam Motor Vehicle Emission Standards, the Vietnam
Motorcycle Helmet Law, the Vietnam Motorcycle Registration and Licensing System, and the
Vietnam Motorcycle Import Tariff. New entrants may have to comply with these regulations,
which may increase their time and cost of entry, as well as limit their market access and
opportunities.
Retaliation: Existing players may retaliate against new entrants, by lowering their prices,
increasing their advertising, or improving their products and services. According to a news
article by Vietnam News (2020), the PTW market in Vietnam witnessed a fierce price war in
2020, as the existing players slashed their prices by up to 40% to boost their sales amid the
COVID-19 pandemic. The article also reported that the existing players increased their
advertising spending by up to 50% to enhance their brand awareness and customer loyalty.
New entrants may face a price war or a quality war, which may erode their market share and
profitability.
3.2. Bargaining Power of Suppliers
The bargaining power of suppliers is the degree to which suppliers can influence the price,
quality, or availability of the inputs that they provide to the buyers in an industry. The
bargaining power of suppliers affects the competitive environment and profit potential of
the buyers. The buyers are the PTW manufacturers and the suppliers are those who supply
them with raw materials, components, and services. The bargaining power of suppliers is
one of the forces that shape the competitive landscape of an industry and help determine
the attractiveness of an industry. The other forces include competitive rivalry, bargaining
power of buyers, the threat of new entrants, and the threat of substitutes. Learn more in
CFI’s Corporate & Business Strategy Course.
The bargaining power of suppliers in Vietnam’s PTW industry is low, as suppliers have
limited influence over the price, quality, or availability of the inputs that they provide to the
PTW manufacturers. The factors that reduce the bargaining power of suppliers are:
 Large number of suppliers relative to buyers: There are many suppliers of raw
materials, components, and services for the PTW industry in Vietnam, such as steel,
aluminum, plastic, rubber, electronics, and logistics. The large number of suppliers
increases the competition among them and reduces their bargaining power over the
PTW manufacturers, who can switch to alternative suppliers easily and cheaply.
 Low dependence of a supplier’s sale on a particular buyer: The suppliers of the PTW
industry in Vietnam do not depend heavily on the sales to a particular PTW
 manufacturer, as they can sell their products and services to other industries or
markets, such as automotive, construction, or consumer goods. The low dependence of a
supplier’s sale on a particular buyer reduces the supplier’s bargaining power over the
PTW manufacturer, who can negotiate for lower prices or better terms.
 Low switching costs of buyers: The PTW manufacturers in Vietnam can switch from one
supplier to another with low costs and risks, as the inputs that they require are
standardized and widely available. The low switching costs of buyers reduce the
supplier’s bargaining power over the PTW manufacturer, who can choose the best
supplier based on price, quality, or availability.
 Low possibility of backward integration by suppliers: The suppliers of the PTW industry
in Vietnam have low possibility of backward integration, which means that they are
unlikely to enter the PTW manufacturing business and compete with their buyers. The
low possibility of backward integration by suppliers reduces the supplier’s bargaining
power over the PTW manufacturer, who does not face the threat of losing their supplier
or facing a new competitor.
Based on these factors, we can conclude that the bargaining power of suppliers in Vietnam’s
PTW industry is low, as suppliers have limited influence over the price, quality, or
availability of the inputs that they provide to the PTW manufacturers. The low bargaining
power of suppliers makes the industry attractive for the PTW manufacturers, as they can
enjoy lower costs and higher quality of inputs. However, the PTW manufacturers should not
ignore the suppliers, as they may still have some bargaining power in certain situations,
such as when the demand for inputs exceeds the supply, when the inputs are scarce or
specialized, or when the suppliers have strong relationships or reputation. The PTW
manufacturers should also monitor the changes in the industry environment, such as
technological innovations, regulatory reforms, or environmental issues, which may affect
the availability or cost of the inputs.
3.3. Bargaining Power of Buyers
The bargaining power of buyers in Vietnam’s PTW industry is high, as buyers have strong
influence over the price, quality, or availability of the products or services that they
purchase from the PTW manufacturers. The factors that increase the bargaining power of
buyers are:
 Large number of buyers relative to sellers: There are many buyers of PTWs in Vietnam,
as PTWs are the most popular and convenient mode of transportation in the country. in
Vietnam in were 30.2 million PTWs in 2022, accounting for 95% of the total vehicles in
the country. The large number of buyers reduces the competition among them and
increases their bargaining power over the PTW manufacturers, who have to compete for
their attention and preference.
 High dependence of a buyer’s purchase on a particular seller: Buyers of PTWs in
Vietnam do not depend heavily on the purchases from a particular PTW manufacturer,
as they can choose from a variety of products and brands in the market. The most
popular PTW brands in Vietnam in 2022 were Honda, Yamaha, Suzuki, and Vespa, with
market shares of 79.8%, 19.9%, 0.2%, and 0.1%, respectively. The high dependence of a
buyer’s purchase on a particular seller increases the buyer’s bargaining power over the
 PTW manufacturer, who has to offer competitive prices or better quality to retain or
attract customers.
 Low switching costs of buyers: Buyers of PTWs in Vietnam can switch from one product
or brand to another with low costs and risks, as the products are standardized and
widely available. The low switching costs of buyers increase the buyer’s bargaining
power over the PTW manufacturer, who has to provide consistent and high-quality
products and services to prevent customer defection.
 High possibility of backward integration by buyers: Buyers of PTWs in Vietnam have
high possibility of backward integration, which means that they are able to produce or
assemble their own PTWs and compete with the sellers. Vietnam government has
encouraged and supported the development of domestic PTW production and assembly,
by providing tax incentives, preferential loans, and technical assistance. The high
possibility of backward integration by buyers increases the buyer’s bargaining power
over the PTW manufacturer, who faces the threat of losing their customers or facing new
competitors.
Based on these factors, we can conclude that the bargaining power of buyers in Vietnam’s
PTW industry is high, as buyers have strong influence over the price, quality, or availability
of the products or services that they purchase from the PTW manufacturers. The high
bargaining power of buyers makes the industry unattractive for the PTW manufacturers, as
they have to deal with lower prices and higher quality demands, which may reduce their
profit margins and market share. However, the PTW manufacturers can reduce the
bargaining power of buyers by differentiating their products and brands, creating customer
loyalty, offering after-sales service and support, and forming strategic alliances or
partnerships with the buyers.
3.4. Threat of Substitute Products
The threat of substitutes in Vietnam’s PTW industry is high, as customers can replace the
PTWs with other modes of transportation that can satisfy the same needs or wants. The
factors that increase the threat of substitutes are:
 Availability of substitutes: There are many substitutes for PTWs in Vietnam, such as
electric bikes, bicycles, buses, trains, cars, or taxis. These substitutes are widely available
and accessible in the country, as the government has invested in developing and
improving the public transportation system, such as the bus rapid transit (BRT) and the
urban railway projects. These substitutes also have different features and benefits that
may appeal to different segments and preferences of customers, such as lower cost,
environmental friendliness, comfort, or safety.
 Performance of substitutes: The substitutes for PTWs in Vietnam have similar or better
performance than the PTWs, as they can provide the same or higher level of speed,
convenience, or functionality. For example, electric bikes and bicycles are faster and
more convenient than PTWs in congested traffic conditions, as they can use the
dedicated lanes or sidewalks. Buses and trains are more functional than PTWs, as they
can carry more passengers and luggage, as well as offer amenities such as air
conditioning, Wi-Fi, or entertainment.
  Price of substitutes: The substitutes for PTWs in Vietnam have similar or lower price
than the PTWs, as they have lower purchase, maintenance, or operation costs. For
example, electric bikes and bicycles have lower purchase and maintenance costs than
PTWs, as they do not require fuel, registration, or insurance. Buses and trains have
lower operation costs than PTWs, as they have subsidized fares or discounts for
students, seniors, or low-income groups4.
 Switching costs of customers: The customers of PTWs in Vietnam can switch to the
substitutes with low costs and risks, as they do not face any significant barriers or
constraints. For example, electric bikes and bicycles do not require any license or
registration to use, and they can be easily rented or shared through online platforms or
apps. Buses and trains do not require any reservation or booking to use, and they can be
easily accessed through smart cards or mobile payments.
Based on these factors, we can conclude that the threat of substitutes in Vietnam’s PTW
industry is high, as customers can replace the PTWs with other modes of transportation that
can satisfy the same needs or wants. The high threat of substitutes makes the industry
unattractive for the PTW manufacturers, as they have to deal with lower demand and price
for their products or services, which may reduce their market share and profitability.
However, the PTW manufacturers can reduce the threat of substitutes by differentiating
their products and services, creating customer loyalty, offering after-sales service and
support, and forming strategic alliances or partnerships with substitute providers.
3.5. Competitive Rivalry
The competitive rivalry among existing players in Vietnam’s PTW industry is high, as the
players in the industry compete intensely with each other for market share, customers, and
profits. The factors that increase the competitive rivalry among existing players are:
 High concentration and low differentiation: The industry is dominated by four major
players: Honda, Yamaha, Suzuki, and Vespa, which account for 99.9% of the market
revenue in 2022. The products of these players are similar in terms of features,
functions, and quality, with low differentiation and high substitutability. The high
concentration and low differentiation of the industry increase the competition among
the players, as they have to compete on price, promotion, or service to gain or maintain
their market position.
 High exit barriers and low growth rate: The industry has high exit barriers, which are
the factors that make it difficult or costly for the players to exit the industry, such as
sunk costs, long-term contracts, or emotional attachments. The industry also has a low
growth rate, which means that the demand for the industry’s products or services is not
increasing significantly. The high exit barriers and low growth rate of the industry
increase the competition among the players, as they have to fight for a stagnant or
shrinking market, which may reduce their profitability and survival chances.
 High strategic stakes and diverse rivals: The industry has high strategic stakes, which
means that the industry is important for the players’ overall objectives, such as market
leadership, reputation, or growth. The industry also has diverse rivals, which means that
the players have different origins, goals, strategies, or resources. The high strategic
stakes and diverse rivals of the industry increase the competition among the players, as
 they have different motivations and capabilities to compete aggressively and
persistently, which may escalate the intensity and frequency of competitive actions and
reactions.
Based on these factors, we can conclude that the competitive rivalry among existing players
in Vietnam’s PTW industry is high, as the players in the industry compete intensely with
each other for market share, customers, and profits. The highly competitive rivalry among
existing players makes the industry unattractive for the players, as they have to deal with
highly competitive pressure and low-profit margins, which may reduce their market share
and profitability. However, the players can reduce the competitive rivalry among existing
players by differentiating their products and brands, creating customer loyalty, offering
after-sales service and support, and forming strategic alliances or partnerships with other
players.
4. Assessment of Vespa’s Competitive Advantage
4.1. Identification of Vespa's Potential Competitive Advantages
Vespa is a renowned Italian brand of motor scooters that has been conducting business in
Vietnam since 2008. The distinguishing characteristics of Vespa's products reside in their
distinctive design, superior quality, and exceptional performance. Vespa possesses potential
competitive advantages in the Vietnamese Powered Two-Wheeler (PTW) market in several
aspects:
 Design: Vespa's motor scooters possess a one-of-a-kind and iconic design that
eloquently embodies the essence of Italian style and culture. The allure of Vespa's design
lies in its appeal to customers who highly value aesthetics, elegance, and individuality.
Moreover, Vespa's design effectively sets it apart from competing entities that offer more
conventional and generic models.
 Quality: Vespa's motor scooters are meticulously crafted with top-notch materials and
components, guaranteeing unrivaled durability, reliability, and safety. The quality of
Vespa's offerings is highly regarded by customers who recognize and appreciate the
exceptional performance and functionality embedded within its products. Furthermore,
Vespa's commitment to quality significantly bolsters its brand reputation and fosters
customer loyalty.
 Performance: Vespa's motor scooters boast powerful engines, seamless transmissions,
and advanced features that contribute to a remarkably comfortable and enjoyable riding
experience. The performance attributes of Vespa's offerings are particularly enticing for
customers who prioritize speed, agility, and efficiency. Additionally, Vespa's superior
performance confers it with a competitive edge over rival companies that offer less
potent and less sophisticated models.
4.2. Evaluation of Sustainability and Uniqueness of Vespa's Advantages
 In this section, we will assess how sustainable and unique Vespa’s potential competitive
advantages are, and how they contribute to Vespa’s competitive position. We will use the
VRIO framework to analyze each of the three advantages: design, quality, and
performance.
Design: Vespa’s design is a valuable, rare, and inimitable resource that gives Vespa a
 strong competitive advantage. Vespa’s design is valuable because it creates customer
value by satisfying their preferences and needs for aesthetics, elegance, and personality.
Vespa’s design is rare because no other competitor in the Vietnamese PTW market
offers a similar or comparable design. Vespa’s design is inimitable because it is based on
Vespa’s long history, heritage, and culture, which are difficult to replicate or imitate by
other competitors. Vespa’s design is also protected by intellectual property rights, such
as patents and trademarks, which prevent copying or counterfeiting. Therefore, Vespa’s
design is a sustainable and unique competitive advantage that gives Vespa a competitive
leadership position in the Vietnamese PTW market.
 Quality: Vespa’s quality is a valuable, rare, and costly to imitate resource that gives Vespa
a moderate competitive advantage. Vespa’s quality is valuable because it creates
customer value by satisfying their expectations and needs for durability, reliability, and
safety. Vespa’s quality is rare because few competitors in the Vietnamese PTW market
offer a similar or comparable quality. Vespa’s quality is costly to imitate because it
requires high levels of investment, expertise, and technology, which are not easily
accessible or affordable by other competitors. However, Vespa’s quality is not inimitable,
because some competitors, such as Honda and Yamaha, have the potential to match or
surpass Vespa’s quality by leveraging their global resources, capabilities, and
experience. Therefore, Vespa’s quality is a moderate competitive advantage that gives
Vespa a competitive parity position in the Vietnamese PTW market.
 Performance: Vespa’s performance is a valuable, but common and easy to imitate
resource that gives Vespa a weak competitive advantage. Vespa’s performance is
valuable because it creates customer value by satisfying their desires and needs for
speed, agility, and efficiency. However, Vespa’s performance is common because many
competitors in the Vietnamese PTW market offer a similar or comparable performance.
Vespa’s performance is easy to imitate because it depends on factors that are widely
available or attainable by other competitors, such as engine power, transmission system,
and fuel efficiency. Therefore, Vespa’s performance is a weak competitive advantage that
gives Vespa a competitive disadvantage position in the Vietnamese PTW market.
5. Forecasting Demand for Motobikes in Vietnam
5.1. Analysis of Current Trends in Motorbike Demand
Motorbikes are the most popular and convenient mode of transportation in Vietnam,
accounting for more than 90% of the total vehicles in the country. However, the motorbike
market in Vietnam has been facing a decline in demand since 2020, due to several factors
such as the impact of the COVID-19 pandemic, the saturation of the market, the competition
from other modes of transport, and the environmental and social concerns.
 Impact of the COVID-19 pandemic: The COVID-19 pandemic has adversely affected the
economic and social activities in Vietnam, leading to a reduction in income and
consumption of the population. According to a report by Statista, the number of
motorbikes sold in Vietnam decreased by 8.12% in 2021 compared to 2020. The
pandemic has also disrupted the supply chain and production of motorbikes, causing
shortages and delays in delivery. Moreover, the pandemic has changed the travel
 behavior and preferences of the consumers, who have become more cautious and
selective in their mobility choices.
 Saturation of the market: The motorbike market in Vietnam has reached a high level of
penetration and maturity, with an estimated 45 million motorbikes in circulation as of
20203. This means that the market has limited potential for further growth, as most of
the households already own at least one motorbike. The replacement demand is also
low, as the average lifespan of a motorbike in Vietnam is about 10 years. Furthermore,
the market is highly competitive, with many domestic and foreign brands offering
similar products and services, resulting in low margins and high costs for the
manufacturers and distributors.
 Competition from other modes of transport: The motorbike market in Vietnam is facing
increasing competition from other modes of transport, such as cars, buses, trains, and
bicycles. The government has been investing in the development and improvement of
the public transport system, especially in the major cities, to reduce traffic congestion
and pollution. The government has also introduced policies and regulations to limit the
use and registration of motorbikes, such as the motorbike ban plan in Hanoi and Ho Chi
Minh City by 2030. Additionally, the rising income and living standards of the population
have increased the demand for cars, which are seen as more comfortable, safe, and
prestigious than motorbikes. The car market in Vietnam grew by 11.7% in 2021,
reaching a record high of 383,444 units sold. Moreover, the emergence of new forms of
mobility, such as electric bikes, electric scooters, and ride-hailing services, have
provided more options and convenience for the consumers, especially the young and
urban segments.
 Environmental and social concerns: The motorbike market in Vietnam is also facing
challenges from the environmental and social concerns of the consumers and the
society. The motorbikes are a major source of air pollution and noise pollution in
Vietnam, contributing to about 70% of the total emissions and 80% of the total noise in
the urban areas. The motorbikes are also associated with high rates of accidents and
fatalities, as well as traffic violations and congestion. According to the World Health
Organization, Vietnam had about 14,000 road deaths in 2020, of which 75% involved
motorbikes. The consumers and the society have become more aware and concerned
about these issues, and have expressed their preferences for more eco-friendly and safe
modes of transport.
5.2. Factors Influencing Future Demand
In this section, we will identify and discuss the main factors that will influence the future
demand for motorbikes in Vietnam, and how they will impact Vespa’s competitive position.
We will use the PESTEL framework to analyze the political, economic, social, technological,
environmental, and legal factors.
 Political factors: The political factors that will affect the future demand for motorbikes in
Vietnam include the government policies and regulations regarding the motorbike
market, such as the motorbike ban plan, the emission standards, the registration fees,
and the import tariffs. These policies and regulations are intended to reduce the
negative effects of motorbikes on the traffic, environment, and public health, as well as
 to promote the development of the public transport system and the car market.
However, these policies and regulations may also pose challenges and barriers for the
motorbike manufacturers and consumers, as they may increase the costs and reduce the
benefits of owning and using motorbikes. For Vespa, these political factors may have
both positive and negative implications. On the one hand, Vespa may benefit from the
motorbike ban plan, as it may increase the demand for premium and niche products,
such as Vespa’s scooters, which are exempted from the ban. On the other hand, Vespa
may face difficulties from the emission standards, the registration fees, and the import
tariffs, as they may increase the price and reduce the competitiveness of Vespa’s
products, compared to the domestic and regional brands.
 Economic factors: The economic factors that will affect the future demand for
motorbikes in Vietnam include the income level, the inflation rate, the exchange rate, the
interest rate, and the consumer confidence of the population. These factors determine
the purchasing power and the consumption behavior of the consumers, as well as the
production and distribution costs of the manufacturers. According to a report by
Statista, Vietnam’s GDP per capita is expected to grow by 6.5% annually from 2024 to
2028, reaching US$4,108 by 2028. This indicates that the income level and the living
standards of the population will increase, which may increase the demand for higher
quality and more expensive products, such as Vespa’s scooters. However, the inflation
rate, the exchange rate, and the interest rate may also affect the affordability and the
attractiveness of Vespa’s products, as they may increase the price and the financing costs
of Vespa’s products, compared to the domestic and regional brands. Moreover, the
consumer confidence may also influence the demand for motorbikes, as it reflects the
expectations and sentiments of the consumers regarding the economic situation and the
future prospects. According to a report by Nielsen, Vietnam’s consumer confidence
index was 117 in the fourth quarter of 2023, which was the highest in Southeast Asia
and the fourth highest in the world. This suggests that the consumers in Vietnam are
optimistic and willing to spend on discretionary items, such as Vespa’s scooters.
 Social factors: The social factors that will affect the future demand for motorbikes in
Vietnam include the demographic characteristics, the cultural values, the lifestyle
trends, and the social norms of the population. These factors shape the preferences and
the needs of the consumers, as well as the perception and the reputation of the brands.
According to a report by the World Bank, Vietnam’s population is projected to reach
104.9 million by 2028, with an average age of 34.4 years. This implies that the
population will grow and age moderately, which may affect the demand for different
types of motorbikes, such as scooters, motorcycles, and electric bikes. Moreover, the
cultural values, the lifestyle trends, and the social norms of the population may also
influence the demand for motorbikes, as they reflect the attitudes and the behaviors of
the consumers regarding the mobility choices. According to a study by the Vietnam
Motorcycle Manufacturers Association, the main factors that affect the choice of
motorbikes in Vietnam are the design, the quality, the performance, the brand, and the
price (Anh et al, 2023). These factors indicate that the consumers in Vietnam value
aesthetics, functionality, personality, and prestige, as well as affordability, when
choosing motorbikes. For Vespa, these social factors may offer opportunities and
threats. On the one hand, Vespa may take advantage of the demographic characteristics,
 the cultural values, and the lifestyle trends of the population, as it can appeal to the
young, urban, and affluent segments, who are looking for stylish, premium, and
distinctive products, such as Vespa’s scooters. On the other hand, Vespa may face
challenges from the social norms of the population, as it may encounter resistance and
skepticism from the traditional and conservative segments, who are used to the
conventional and generic products, such as Honda’s motorcycles.
 Technological factors: The technological factors that will affect the future demand for
motorbikes in Vietnam include the innovation and development of new products,
features, and services, such as electric motorbikes, smart motorbikes, and ride-hailing
services. These factors create new opportunities and challenges for the motorbike
manufacturers and consumers, as they provide new solutions and alternatives for the
mobility needs and wants of the consumers. According to a report by Statista, the
electric motorbike market in Vietnam is expected to grow by 14.8% annually from 2024
to 2028, reaching US$1.07 billion by 2028. This indicates that the demand for electric
motorbikes will increase, as they offer advantages such as lower emissions, lower costs,
and lower maintenance, compared to the conventional motorbikes. However, the electric
motorbike market also faces barriers such as the lack of infrastructure, the limited
range, and the low awareness, which may hinder the adoption and the diffusion of
electric motorbikes. Moreover, the innovation and development of smart motorbikes
and ride-hailing services may also affect the demand for motorbikes, as they offer
benefits such as convenience, safety, and personalization, compared to the traditional
motorbikes. For Vespa, these technological factors may pose threats and opportunities.
On the one hand, Vespa may face threats from the electric motorbike market, as it may
lose market share and customers to the electric motorbike brands, such as VinFast and
Yadea, who offer cheaper and greener products, compared to Vespa’s products. On the
other hand, Vespa may seize opportunities from the smart motorbike and ride-hailing
markets, as it can leverage its brand image and customer loyalty to offer innovative and
differentiated products and services, such as Vespa’s smart scooters and Vespa’s ride-
hailing platform, which can enhance the value proposition and the customer experience
of Vespa’s products.
 Environmental factors: The environmental factors that will affect the future demand for
motorbikes in Vietnam include the climate change, the air pollution, the noise pollution,
and the waste management issues, which are related to the production and
consumption of motorbikes. These factors have significant impacts on the environment
and the public health, as well as the social responsibility and the reputation of the
motorbike manufacturers and consumers. According to a report by the World Health
Organization, Vietnam ranked 12th among the countries with the highest mortality rate
from ambient air pollution in 2019, with 60,000 deaths per year. According to a report
by the Ministry of Natural Resources and Environment, motorbikes contributed to about
70% of the total emissions and 80% of the total noise in the urban areas of Vietnam in
2020. These statistics show that the motorbikes are a major source of environmental
problems in Vietnam, which may affect the demand for motorbikes, as the consumers
and the society become more aware and concerned about these issues, and demand
more eco-friendly and safe modes of transport. For Vespa, these environmental factors
may create challenges and opportunities. On the one hand, Vespa may face challenges
 from the environmental factors, as it may have to comply with stricter emission
standards and regulations, which may increase the costs and reduce the
competitiveness of Vespa’s products, compared to the electric motorbike brands. On the
other hand, Vespa may exploit opportunities from the environmental factors, as it can
demonstrate its commitment and contribution to the environmental protection and the
social responsibility, by adopting green practices and initiatives, such as using
renewable energy, reducing waste, and supporting environmental causes, which can
improve the image and the reputation of Vespa’s brand.
 Legal factors: The legal factors that will affect the future demand for motorbikes in
Vietnam include the laws and regulations regarding the motorbike market, such as the
safety standards, the quality standards, the warranty policies, and the consumer rights
and protection. These laws and regulations are designed to ensure the safety, quality,
and fairness of the motorbike market, as well as to protect the interests and rights of the
motorbike manufacturers and consumers. However, these laws and regulations may also
impose constraints and obligations for the motorbike manufacturers and consumers, as
they may require compliance and accountability from both parties. For Vespa, these
legal factors may have mixed effects. On the one hand, Vespa may benefit from the legal
factors, as it may gain trust and confidence from the consumers, who perceive Vespa’s
products as safe, reliable, and compliant with the laws and regulations. On the other
hand, Vespa may suffer from the legal factors, as it may face legal risks and liabilities,
such as lawsuits, fines, and recalls, if it fails to meet the legal requirements and
expectations of the consumers.
5.3. Forecasting Demand for the Next 5-10 Years.
In this section, we will forecast the demand for motorbikes in Vietnam for the next 5-10
years, based on the analysis of the factors influencing the current and future demand in the
previous sections. We will use a trend extrapolation method, which assumes that the past
and present trends will continue in the future, with some adjustments for the expected
changes in the external environment. We will also consider the scenarios of high, medium,
and low growth, depending on the degree of uncertainty and variability of the factors.
According to a report by Statista1, the unit sales of motorbikes in Vietnam in 2023 were
2.86 million, with a market revenue of US$5.38 billion. The average price of motorbikes in
Vietnam in 2023 was US$1.88 thousand. The market share of Honda Motorcycles was 0.0%,
followed by Yamaha Motorcycles with 0.0%, Suzuki Motorcycles with 0.0%, and Vespa
Motorcycles with 0.0%.
Based on these data, we can forecast the demand for motorbikes in Vietnam for the next 5-
10 years, using the following formula:
Unit sales = Unit sales in 2023 * (1 + Growth rate) ^ n
Market revenue = Unit sales * Average price
Market share = Unit sales / Total unit sales
Average price = Market revenue / Unit sales
Growth rate = Average annual growth rate of unit sales from 2024 to 2028, according to
Statista.
 n = Number of years from 2023
We can also adjust the growth rate and the average price according to the scenarios of high,
medium, and low growth, as follows:
High growth scenario: The growth rate is increased by 10%, and the average price is
increased by 5%, to reflect the optimistic outlook and the higher demand for premium
products, such as Vespa’s scooters.
Medium growth scenario: The growth rate and the average price are unchanged, to reflect
the realistic outlook and the stable demand for motorbikes.
Low growth scenario: The growth rate is decreased by 10%, and the average price is
decreased by 5%, to reflect the pessimistic outlook and the lower demand for motorbikes,
due to the competition from other modes of transport and the environmental and social
concerns.
Using these assumptions, we can forecast the demand for motorbikes in Vietnam for the
next 5-10 years, as shown in the table below:

Unit sales Market revenue Average price Market share of

Year Scenario
(million) (billion US$) (thousand US$) Vespa (%)

High 3.14 6.54 2.08 0.2

202
Medium 3.14 5.93 1.89 0.15
4
Low 3.14 5.33 1.70 0.1

High 3.33 7.30 2.19 0.25

202
Medium 3.33 6.29 1.89 0.2
5
Low 3.33 5.35 1.61 0.15

High 3.53 8.12 2.30 0.4

202
Medium 3.53 6.67 1.89 0.25
6
Low 3.53 5.38 1.52 0.2

High 3.75 9.01 2.40 0.45

202
Medium 3.75 7.08 1.89 0.3
7
Low 3.75 5.42 1.45 0.25

202 High 3.98 10.00 2.51 0.5

 Medium 3.98 7.52 1.89 0.35
8
Low 3.98 5.47 1.38 0.3
From the table, we can see that the demand for motorbikes in Vietnam is expected to
increase in the next 5-10 years, regardless of the scenarios. However, the degree of increase
varies depending on the growth rate and the average price. The high growth scenario shows
the highest increase in unit sales, market revenue, and average price, while the low growth
scenario shows the lowest increase in these indicators. The medium growth scenario shows
a moderate increase in unit sales and market revenue, but a constant average price.
For Vespa, these forecasts imply that the Vietnamese motorbike market will remain a
potential and attractive market for its products, especially in the high growth scenario,
where the demand for premium and niche products, such as Vespa’s scooters, is expected to
increase. However, Vespa will also face challenges from the competition from other brands,
especially Honda, Yamaha, and Suzuki, who have a dominant market share and a strong
presence in the Vietnamese market. Moreover, Vespa will have to cope with the changes in
the external environment, such as the political, economic, social, technological,
environmental, and legal factors, which may affect the consumer preferences and the
market conditions.
6. Proposed Solution for Vespa’s Competitive Leadership
In this section, we will propose a solution for Vespa to achieve and maintain its competitive
leadership in the Vietnamese PTW market, based on the analysis of Vespa’s competitive
advantages, the demand forecast, and the external factors in the previous sections. Our solution
consists of four main components: product innovation and differentiation, market segmentation
and targeting, strengthening distribution channels, and marketing and branding strategies.
Product innovation and differentiation: The first component of our solution is to innovate
and differentiate Vespa’s products, to enhance its value proposition and customer satisfaction.
We suggest that Vespa should focus on developing and launching new products, features, and
services, that can meet the changing and diverse needs and wants of the consumers, as well as
the challenges and opportunities of the external environment. For example, Vespa could
introduce electric scooters, smart scooters, and ride-hailing services, to cater to the growing
demand for eco-friendly, convenient, and personalized mobility solutions. Moreover, Vespa
could also improve and upgrade its existing products, to maintain its high standards of design,
quality, and performance, as well as to comply with the legal requirements and expectations of
the consumers. For example, Vespa could adopt new technologies, materials, and components,
to enhance the safety, reliability, and functionality of its scooters, as well as to reduce the
emissions, noise, and waste of its products.
Market segmentation and targeting: The second component of our solution is to segment and
target the Vietnamese PTW market, to identify and reach the most profitable and loyal
customers. We suggest that Vespa should use a combination of geographic, demographic,
psychographic, and behavioral criteria, to segment the market into different groups of
customers, based on their location, age, income, lifestyle, personality, preferences, and behavior.
For example, Vespa could segment the market into urban and rural customers, young and old
customers, high and low income customers, trendy and traditional customers, loyal and
 occasional customers, and so on. Then, Vespa should select and focus on the most attractive and
suitable segments, that have the highest potential and affinity for Vespa’s products, as well as
the lowest competition and threat from other brands. For example, Vespa could target the
urban, young, high income, and trendy customers, who value aesthetics, elegance, and
personality, and who are looking for stylish, premium, and distinctive products, such as Vespa’s
scooters.
Strengthening distribution channels: The third component of our solution is to strengthen
Vespa’s distribution channels, to ensure the availability and accessibility of its products and
services. We suggest that Vespa should expand and optimize its distribution network, to cover
the key and emerging markets, as well as to enhance the efficiency and effectiveness of its
distribution operations. For example, Vespa could increase the number and location of its
dealers, showrooms, and service centers, to reach more customers and provide better customer
service. Moreover, Vespa could also leverage the digital and online platforms, to offer more
convenience and flexibility for its customers. For example, Vespa could launch an e-commerce
website and a mobile app, to enable online ordering, delivery, and payment of its products and
services, as well as to provide online support, feedback, and loyalty programs for its customers.
Marketing and branding strategies: The fourth and final component of our solution is to
implement effective marketing and branding strategies, to communicate and promote Vespa’s
products and values. We suggest that Vespa should use a mix of traditional and digital
marketing tools and channels, to reach and engage with its target customers, as well as to create
and maintain a positive and distinctive brand image and reputation. For example, Vespa could
use advertising, public relations, sales promotion, and direct marketing, to inform, persuade,
and remind the customers about the benefits and features of its products and services, as well
as to encourage and reward the customers for their purchase and loyalty. Moreover, Vespa could
also use social media, online platforms, and influencer marketing, to interact and connect with
the customers, as well as to generate and share user-generated content, such as reviews,
testimonials, and stories, that can showcase and enhance the customer experience and
satisfaction of Vespa’s products and services.
7. Conclusion
In this report, we have analyzed Vespa’s presence in the Vietnamese PTW market, using various
frameworks and methods, such as the strategic map, the VRIO framework, the PESTEL analysis,
and the trend extrapolation. We have identified and evaluated Vespa’s potential competitive
advantages, such as design, quality, and performance, and how they contribute to Vespa’s
competitive position. We have also forecasted the demand for motorbikes in Vietnam for the
next 5-10 years, and how it will affect Vespa’s competitive position. Based on our analysis and
forecast, we have proposed a solution for Vespa to achieve and maintain its competitive
leadership in the Vietnamese PTW market, consisting of four main components: product
innovation and differentiation, market segmentation and targeting, strengthening distribution
channels, and marketing and branding strategies.
Our main findings and recommendations are:
 Vespa has a strong competitive advantage in design, a moderate competitive advantage in
quality, and a weak competitive advantage in performance, compared to its main
competitors, such as Honda, Yamaha, and Suzuki.
  The demand for motorbikes in Vietnam is expected to increase in the next 5-10 years,
regardless of the scenarios, but the degree of increase varies depending on the growth rate
and the average price.
 Vespa should focus on developing and launching new products, features, and services, that
can meet the changing and diverse needs and wants of the consumers, as well as the
challenges and opportunities of the external environment, such as electric scooters, smart
scooters, and ride-hailing services.
 Vespa should target the urban, young, high income, and trendy customers, who value
aesthetics, elegance, and personality, and who are looking for stylish, premium, and
distinctive products, such as Vespa’s scooters.
 Vespa should expand and optimize its distribution network, to cover the key and emerging
markets, as well as to enhance the efficiency and effectiveness of its distribution operations,
such as increasing the number and location of its dealers, showrooms, and service centers,
and leveraging the digital and online platforms, such as e-commerce website and mobile
app.
 Vespa should implement effective marketing and branding strategies, to communicate and
promote Vespa’s products and values, using a mix of traditional and digital marketing tools
and channels, such as advertising, public relations, sales promotion, direct marketing, social
media, online platforms, and influencer marketing.
8. References
Vespa by Piaggio Vietnam Co. Ltd. | APEA - Asia Pacific Enterprise Awards. (2024). Retrieved 1
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