Strategy Management: Overview And Analysis Of The Bicycle Industry

STRATEGY AND CHANGE MANAGEMENT.
Name:
Course:
Tutor:
Institution:
Location:
Date:
STRATEGY AND CHANGE MANAGEMENT
Executive Summary.
This paper is a report of the research and analysis of relevant strategic decisions taken by the group during a formative in-class strategic simulation exercise that the group was involved in, playing in a number of sections to cover three years of discussions comprising four quarters each. The report contains information about the group’s virtual bicycle company. In detail, this anecdote elucidates the initial strategies made for the corporation and the decisions made by the group members with the objective of implementing them. The report will include a detailed description of the performance criteria that the group used for the success of the implementation, proposals that made the strategies stronger and achievable as well as the theory of change management and its relevance to the simulated experience. The report also outlines a relationship between the group’s experience and an explanation on the manner in which specific theoretical models might have contributed to the success of the company. Finally, I will demonstrate the justification of my contribution by reflecting on the knowledge of the theories used and their application in the course.
Introduction.
Organizational change is one of the most important strategies for companies that want to evolve and remain relevant and competitive in the field of its specialization. However, as much as it may sound hugely essential, this process can be incredibly disruptive if one does not have the correct and the most appropriate strategy that will guide its transformation. The organizational change of the group’s bicycle company was facilitated by its adherence of a number of principles that led to its success in the four quarters of its running. Some of these principles included systematically addressing the human side of the change where issues created among the people in the course of its transformation were dealt with. The other principle was leading with culture, starting the change from the bottom, making the change initiative through involvement of each layer of dynamics, confronting reality and demonstrating faith on the company through vision, practicing targeted and fruitful communication, engaging all members of the board in decision making but maintaining a clear ownership of the firm as well as emphasizing on price builders.
Overview and Analysis of the Bicycle Industry.
PESTEL ANALYSIS.
Political

Economic

* Government has passed a legislation which requires further reduction of the use of vehicles due to harmful fuel emissions in to the atmosphere (Magat & Moore, 2016).
* There are new political forces that are ought to be elected five months from now to fight for the reduction of taxes.
* Government is increasing its funding on bicycles (Magat & Moore, 2016).
* Government is eliminating employment regulations, making it easy for one to work in an organization.

* GDP of the bicycle industry is expected to grow by 5% by the end of 2013 (Magat & Moore, 2016).
* In 2019, credits for the business will either experience a slight increase of 0.2% or be retained. This is after its huge 12% decrease in 2010 (Magat & Moore, 2016).
* The rate of unemployment is expected to decrease by 8%.
* Inflation rates will reduce by 4% from the current 3% in 2019.
* Corporate tax is expected to decrease by 2% to 18% by the end of the year.
* Looking at the currently varying GDP, the price of oil is expected to increase by 6% from the current price of $100/barrel.

Socio-cultural

Technological

* Beginning with the demographics, in gender, 45% of adults of 18 and above years who are owners of bicycle state that they have been cycling for the past 12 months as a sport and a form of recreation (Magat & Moore, 2016).
* In the whole country, 69% of the bicycle riders are male whereas 31 % of them are female (Magat & Moore, 2016).
* Approximately 505 of teenagers between the ages of 12 and 17 years own a mountain or a common road bike.
* In the part of culture, heritages, norms and cultural values, 17% of the kids are obese.

* If the industry introduces a new machinery, this could reduce bicycle and business costs by 20%, an amount which will then be used for the development of the industry.
* The industry should use websites to search for bicycle users, share information and improve.
* Market research is utilized in the U.K. right now but more could be done (Magat & Moore, 2016).
* Companies could use camera pictures and YouTube videos to sell accessories.

Environmental

Legal

* The industry is evidentially adhering to the existing environmental legislations. As a matter of fact, there is an annual campaign where individuals bike to raise finances for the restoration of the environment such as planting trees (Magat & Moore, 2016).
* Government is passing laws on the regulation of the use of old trains and vehicles that emit wastes in to the environment by encouraging the use of bicycles in short distances.

* The health and safety of biking, according to the bicycle industry in the U.K, is relatively positive and people, including young children, are guaranteed full safety and less damages through the development of better and stable bicycles.
* Consumer rights and laws, advertising standards, product labelling and product safety are guaranteed by the industry. This is currently evident in the sense that the industry uses acceptable and appropriate channels to advertise their products and the labelling is legal, not to mention the reported satisfaction from customers when asked about it (Magat & Moore, 2016).

SWOT ANALYSIS.
Strengths

Weaknesses

* Location- The location of the main firms in the industry encourages investors and will draw more visitors in the future.
* Uniqueness- The industry stands out as a unique entity and an alternative that offers efficient, high quality services to its customers.
* Strong Management- The industry has assembled a very able team that appreciates different disciplines with the utmost expertise in all areas of the business.

* Lack of Capital- When the industry was being set up, most of its funds came from loans, grants, and investors.
* Lack of recognition- The industry has not established itself as a reputable branch in the world recognition.

Opportunities

Threats

* Growth- Brompton is growing at a rate of 9%. This can be evaluated and achieved in all the companies in the industry.
* More interest in biking- With the growing population, and the improvements in the industry, more people are starting to show their interest in biking and that will aid the industry on a large scale.

* Competition- The cars and the technology industries are major competitors because they have more and loyal customers as well as more people consumers deciding to buy their products.
* Market trends- Credits are bound to reduce by 2% in the future and this will greatly change the market of bicycles.

Bench Marking.
Some of the main bicycle sellers in the bike industry in the U.K include Brompton Bicycles. The company has been making processes and notably, in 2016, Brompton Bicycles made an overall sales of £8.7 million, which is an 8.8% increase from what was recorded in 2015 (Magat & Moore, 2016). The financial information of Brompton Bicycles shows that the U.K market is worth £15 to £20 million at retail prices. Other companies reviewed in this context were Giant Bicycle store located in Leamington, U.K, Evans Cycles who dealers and sellers of bicycles and also do deliveries (Salamadija & Avramovic, 2017). Another company with good rating in the industry was Cycles UK Chelmsford, located in Riverside Retail Park in Chelmsford and lastly Dutch Bike Shop and Coastal Cycles.
Literature Review.
Initial strategies.
The initial strategy that my group had with the bicycle industry in consideration to our company was:
* Sell as many bicycles as possible.
* Reduce excessive stock level.
* Focus on best sales and Advertisement Avenue.
* Reduce the number of debtors and maintain a healthy financial status in the company.
Decisions taken to implement the strategies.
Quarter 1 Year 4

* Purchase reduced by 200 units.
* Production level increased by 200 units.
* Initial Price increased by £40.

Quarter 2 Year 4

* Price of bicycles decreased by £20.
* Production which decreased by 300 units.
* Production increased by 150 units.

Quarter 2 Year 5

* Purchases decreased by 200 units.
* Prod...