Executive Presentation: Mountain and Recreation Bike Industry

Executive Presentation to the Board
Author Name
Institution Affiliation
This paper outlines my experiences based on the data and the evidence I have collected during my research on the company. It touches all the aspects and sectors of the business that require attention and a summary of my findings can be found in this document. The data used in this paper is the company provided and is used to analyze how the company has performed financially and what market share it holds. All these aspects are considered from the time of its opening to date. I have touched upon company’s corporate strategy (where it was and where it is now after going through different stages of evolvement), its sales channel, manufacturing process, the in-house human resource system or mechanism, marketing, and financial strategies. This paper also highlights the company’s strengths and weaknesses with a particular focus on its current level of competition and how prepared it is for future competition. The three learned lessons are also covered in this paper.
Financial and Market Performance
The company had a good start and was able to claim a reasonable market share within no time. It has been able to keep its financial policy well intact with its operations. As I noticed that within six months (two quarters) the firm was trading from two shops. Not only this, the launch of new products met with good public demand which was a direct result of a successful marketing strategy. Upon receiving such a positive and overwhelming response the new range of products was introduced to meet the client’s demands, thus, replacing the old-fashioned range of products. This success was proof that the company is keeping the price and quality factors in its mind when manufacturing these products. This gave a great competitive advantage to the company over its competitors.
The Strategy of the Firm
Overall Corporate Strategy
The aim of the company was, like all, to maintain good profitability, gain a competitive advantage by leading from the front to become the industry leader. It wanted to attract the market segment looking for great quality products yet at low price. And to achieve this target, the company devised a strategy to compete with its industry rivals (in speed, mountain and recreation bike industry) on their home ground.
Marketing Strategy
Q1: We wanted to achieve two things with our marketing strategy; create our market share and maintain it. In other words, the goal was to build our position and retaining it for as long as we can. So, we strategized to cover those segments of the market which are competitive and smaller in its geographical size. Firstly, we spent good enough time on identifying the needs of the customers, so we only make something that is in accordance with their preferences. What we identified during our research that all three bikes required modification in their very basic components to suit the customer’s needs. For instance, all three bikes needed a standard carbon fiber material. We also found that Lightning suffered from the aerodynamic element, fast tires and precision in its brakes. Poise could be extra comfortable with standard good quality tires and brakes. The Beast lacked the rugged factor, strong grip of tires and a standard disk for its brakes.
When it came to the handlebars we noticed Lightening needs aerodynamic, Poise needs straight and Beast requires power straight handlebars.
Few more noticeable factors were gears (24 gears in Lightening, 14 gears in Beast and 7 in Poise), and seats (racing seat in Lightening, comfort in Poise and all-purpose in Beast).
Q2: The firm made use of the local electronic and print media for the advertising purpose. Five thousand went to advertise two model of Lightening and three models of Beast on Biking related magazines. The company also spent 49009 on ten inserts. We allocated 7500 on the two advertisements of Poise in Health and Fitness related magazines, and 8500 in general news related magazines. With each bike having a rebate of 5 we set the selling priority as; Poise (first), Beast (second), and Lightening (third). We set the retail price of 1100 (Poise), 1400 (Beast) and 1600 Lightning.
Q3: In quarter three, we maintained our policy to keep using the local media for advertising and keep reminding our potential customers of our presence in the market. It took 7600 to secure advertising spaces on Health and Fitness magazines for one model of each of three bikes. To get advertising space on Biking mags for two Beast and one Lightning model it cost the business 5000. Another budget of 8500 was used to advertise all three bikes on general news magazines.
This quarter, we wanted to extend our reach and decided to throw more cash to market our products. Since Poise was our priority, we spent 9800 on advertising the bike on Entertainment and Leisure mags. The similar amount was spent to advertise one Beast and one Lightening on Sports magazines. An amount of 95408 was dedicated to 13 inserts. We also used the Internet for marketing purpose this time for maximum reach. Out of the total budget of 12000, each of Lightening and Poise used 3000 and remaining 8000 was spent on Beast. For Internet marketing we changed the sales priority in this order; Lightning, Beast and then Poise.
Q4: We added a new member in our product range, and we named it Joy. The model had state of the art design and high-quality components. Joy had seven speed gears with great quality of carbon fiber material and standard disk brakes. It also comfortable seat made from polymer gel, hybrid tires, shock absorbers at the front, reflector at the front and backpedals and a shopping basket to help the shoppers. Everything was made and designed with extreme care.
The firm launched another advertising campaign and added Joy in this new stream. On Health and Fitness magazines we advertised two models of Joy, one of Lightening and one of Beast which cost us altogether 7500. Another 8500 was spent buy space on new magazines for one of each; Lightning, Beast, and Joy.
Q5: The company introduced two models, Pangolin and Ambitious. Both were designed and manufactured with special attention to detail. We spent 7300 on the adverts of for 2 Joy, 1 Ambitious, 2 Poise and 1 Pangolin model on Health & Fitness Magazines. An amount of 4650 went on for 1 Ambitious and 1 Pangolin models on Biking magazines. And, 9876 was paid to Sports magazines for advertising 1 Pangolin and 2 Ambitious models.
Q6: We made use of social media to advertise our product range. An amount of 7980 was spent to advertise each model on social media platforms. We were still using the traditional means of advertising as 165,021 was allocated to 26 inserts. To advertise 1 Ambitious on New Venture magazines and Business magazines cost the firm 4128 and 9420, respectively.
Sales Channel Strategy
Q1: As part of the sales strategy it was decided that we will sell our products (sales channel) through company-operated shops. So it gave us the flexibility to set and maintain certain retail prices in accordance with our cost with complete control over the range we want to display and also the advertising aspects of the business. A budget of 140,000 was spent on opening a new store in Amsterdam.
Q2: As per the plans, we had a store in Amsterdam up and running with seven staff members working in different areas of the shop. For training purpose, on a quarterly basis, 450 was spent on two employees for mountain training, 450 for speed training was spent on one employee, we spent 350 on service where there were one employee and 300 for recreation where we had three employees. The annual salary was determined to be 21000. So, the quarterly cost for all aspects of the business was calculated to be 39000. Going through this phase of operations we decided to open a new store in New York City, and the cost for that was estimated to be 250,000.
Q3: When we entered into quarter three we were trading from two stores; Amsterdam and the newly opened store in New York City. On both stores, the operations were costing us 110,000. We hired seven staff members for the NY city store, following the success of the previous store. Other statistics have been broken down in the following passage. The annual salary was 25000, and we also allocated fair budget for training purpose. These quarterly costs included 350 for service (on one employee), 300 for recreation (on two employees), 500 for speed training (on three employees) and 500 for mountain training (on one employee). The accounts department came up with the figure of 92,000 of quarterly spending on all, service and sales, areas of the business.
Q4: At this point in time, we were running two stores having the same operational cost as we did not introduce any novelty in our operations. We were able to achieve a consistent approach in operations by keeping the same headcount in each store (which was seven), and we did not pursue new hiring. But, the cost of...