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FIRM FOUR

FIRM FOUR. Presented by : Morgan , Bryson, Dustin and Matt. “Nothing compares to the simple pleasure of a bike ride” - John F. Kennedy. Analysis of Results. Low Cost, High Volume Strategy Sales increase of 344.3% - JMTM 193.75% - Industry 64.4% COGS decrease of 0.83%

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FIRM FOUR

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  1. FIRM FOUR Presented by : Morgan , Bryson, Dustin and Matt “Nothing compares to the simple pleasure of a bike ride” - John F. Kennedy

  2. Analysis of Results • Low Cost, High Volume Strategy • Sales increase of 344.3% - JMTM 193.75% - Industry 64.4% • COGS decrease of 0.83% - JMTM -3.80% - Industry -0.97% • Profit after tax increase of 5.22% - JMTM 7.20% - Industry 1.98%

  3. Marketing Strategy • For ADV4 bike we used low advertising and low PR • For Hot Wheels (youth bike), we had high advertising and low PR • For the Super Speed (Road bike), we had low advertising and high PR • The Low-price - High-volume strategy has been a success in allowing our firm to stand at one of the top in the market.

  4. Operations Results • High wastage in this fiscal year. We doubled the amount of materials we needed. • We had 50% idle material. Next year we wouldn’t need to buy any materials for building. • For the amount we spent on efficiency ($1,000,000) we were still capable of being the market leader. • Quality wasn’t an issue with the customers sitting around 52%.

  5. SWOT Analysis Strengths: • Firm4 was early to Market • Diversified Quickly • Expense Control - Advertising Dropped off as our marketing momentum began Weakness: • Factory Production - Decreasing our Efficiency. Missed out on selling about 15,000 bikes. - Inability to plan production - Poor Media planning for ‘SuperSpeed’ Bikes Opportunities: • Unmet Market Demand -No inventory resulted in increasing production and therefore , there was an opportunity to sell an extra 15,000 bikes. Threats: • JMTM • Companies able to see what we were doing. • Companies limited to the identical 3 styles

  6. Recommendations for the Future • Recommendations for the future of Firm4.Future Objectives: • Stop buying so much SCU’s in advance. Figuring out how many of each bike we want to produce before purchasing excessive quantities of materials would help with our wasted overhead/operation costs considerably. We wasted 42,176 material units this past year, our personal worst. We bought double the amount of materials that were necessary for production. • The addition of the ‘superspeed’ model was a great addition to the line up of brands offered by the firm. its first year on the market was a great success, and by having 3 brands offered, Firm4 has a solid reputation of bringing great reliable bikes to the market, filling most consumer needs. • For the future, the company should concrete the operations process, and we will tighten our materials budget. • There is a massive amount of room available for improvement on Firm4, but at the same time we are doing a lot correct.

  7. Manager Perspective • Manager Perspective: • From a management perspective, the same issues apply. tightening up our production budgets and slack times, Firm4 could potentially decrease their wages and resources wasted on idle time, and dominate the market with our bikes, and our bikes only. • Currently, the company has a 50% idle time, if we could cut that down to well below 20%, the money saved purely from being more efficient will allow us to increase our PR and advertising by nearly 20%, increasing the brands effectiveness in the stores. • Firm4 also has an ongoing issue with quality. Over the past years, we have held constant with below the industry average. If we could spend in the $4,000,000 bracket, our quality would be nearly 65-70%. • If this increase happens over the course of a 2-3 year period, our customercommitment would increase as well as the chance to raise our prices possibly.

  8. In the end… • Firm4 was able to bring 3 bike styles to the market, offering a range from youth, to speed. The brand name and the quality we offered were second to none and with this, we maintained our spot as industry leaders. • Our final share price was $37.54. • Firm4 looks to future with confidence.

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