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M ike B ikes

Dylan Chisholm (201006059) R.D. Chisholm (201007930) Molly MacDonald (201006408). M ike B ikes. I ntro duction. Strategic Decision Financial Decisions Analysis of Sales Growth, COGS, and Profitability Marketing Results Operations Results SWOT Analysis

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M ike B ikes

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  1. Dylan Chisholm (201006059) R.D. Chisholm (201007930) Molly MacDonald (201006408) MikeBikes

  2. Introduction • Strategic Decision • Financial Decisions • Analysis of Sales Growth, COGS, and Profitability • Marketing Results • Operations Results • SWOT Analysis • Summary Analysis • Objectives • Recommendations • Q&A

  3. Strategic Decisions • In the first 3 years for the mountain bike the strategy was to have a low cost bike with high inventory. • In 2014 a new youth bike was introduced and was launched in 2016. The strategy implemented with the DMR youth bike was low inventory and high cost

  4. Financial Decisions • Largely based on saving money for future reference • In 2014, invested in a new youth bike • Focused on spending money on advertising; plan on increasing this in the future • No high-risk financial decisions were made, therefore there is now money to be spent on improvements and growth

  5. Analysis of: Sales Growth, COGS, Profitability • Sales Growth: • Very little change in sales growth • Inconsistent with the industry average • COGS: • Vertical analysis of COGS remained constant • Horizontal analysis for cost of goods sold was inconsistent from year to year • Profitability: • Capacity remained relatively the same, which kept the profitability constant • Our profit after tax remained constant, but after we made an investment in 2014 the profit took a major hit

  6. Market Results and Broader Environment • Consistent with awareness rating, PR rating and distribution • 3rd highest awareness rating while BMX was at the top • Low PR rating throughout • Distribution rating remained fairly consistent

  7. Operations Results • Problem that arose: inventory exceeded our maximum capacity for the years of 2016 and 2017 • Beginning years were our most successful ones for our low price high inventory strategy • After introducing youth bike, strategy was high cost low inventory; not as successful • Wastage and idle time were fairly consistent and not overly high throughout but plan to decrease both in the future

  8. SWOTAnalysis • Strengths • Our firm has held a gross margin of at least 43% over the years • Shareholders value had increased higher than our direct competitors (Hot Wheels) every year up until 2015 • Weaknesses • Awareness: • Capacity planning • Strategy • Opportunities • New Products • Strategic Repositioning • Distribution • Savings/Cash • Threats • Competition Positioning

  9. Summary Analysis • MikeBikes has seen many ups and downs over the past 7 years, having faced adversity but still following through with success. Mistakes have been made our firm and we have faced the consequences of them, however we have learned from these mistakes and well use them as guidelines for the future in improving our stance and growth in the market. Although we currently are trying to rebuild and re-establish our place as a firm, we plan on using our assets to do this effectively and efficiently and in the future we will expand and become one of the most powerful firms in the market.

  10. Recommendations 1. • Adjust pricing and number of bikes in our inventory for DMR • Price to be one of the lowest in the industry • Increase inventory to a number around previous lost sales number (approximately 35,000) 2. • Increase our awareness rating by spending more on PR and advertising • Especially beneficial for our plan on improving the mountain bike, for it will make consumers aware of the increase in quality and efficiency. 3. • Improving the quality of our bike by spending more money • as a result bike can then be sold at a higher price • This will lower COGS; our COGS has been fairly high compared to other firms 4. • Increasing gross margin to 60% within the next 5 years is a goal thatis realistic for our company after following through with our operational changes 5. • Our long-term goal is to increase our shareholder value to $40 per share or higher by the year 2023. By achieving our previous stated goals, our shareholder value will rise and will continue to increase with the success of our objectives.

  11. Question& Answer

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