Strategic Management: Appendix 2

1. Strategic Management: Appendix 2 Team 5

2. Executive Summary Big Loud Motorcycles Inc. (BLM) • Revenue increased 8% annually • Profits grew 12% annually • 42.1 % US market share • Struggle with international

3. Company Vision/Mission Vision Statement: “Build the world’s best motorcycle product so that customers can experience joys of motorcycling.” Mission Statement: “Continue expanding its extensive line of motorcycles and accessories and to continue developing product features that help make motorcycling enjoyable and safe.”

4. Company Goals Achieve sales and profit growth of at least 4% a year Build relationships with dealers and customers Continuing innovation for new safety features Increase global revenues from 8% to 10% annually

5. Company Policies/Values Employees are the reason behind success and their contributions are valued BLM is committed to environmental responsibility Dedicated to providing customers with outstanding product value and service

6. Corporate and Competitive Strategies Corporate Strategy: concentrating on product and market development Competitive Strategy: defending their dominant market share by using differentiation to provide the best possible products

7. External AnalysisIndustry/Competition—Five Forces • Current Rivalry Opportunities • Strong industry sales growth • Current Rivalry Threats • High exit barriers • Potential Entrants Opportunities • Government Regulation • Bargaining Power of Buyer Opportunities • Products purchased are differentiated and unique • Bargaining Power of Buyer Threats • Buyers have full information

8. External Analysis cont. • Bargaining power of supplier opportunities • Suppliers do not have ability to do what buying industry does • Bargaining power of supplier threats • Suppliers’ products are an important input to industry • Substitute products opportunities • Substitute products threats • There are several substitutes

9. General External Environment • Economic opportunities • Personal disposable income is around 37,682 and is forecasted to continue increasing • Economic threats • Unemployment levels are currently rising and are forecasted to continue increasing as the economy slows down • Demographic opportunities • The U.S. population is increasingly diverse • Demographic threats • Cost of higher education continues to increase, as does the amount of student financial aid

10. General External Environment cont. • Sociocultural opportunities • More “gold-collar” employees in the workforce • The increasing popularity of “green” issues • Sociocultural threats • Public image of motorcycle riders is not always positive • Political-legal opportunities • State helmet laws • Political-legal threats • State helmet laws

11. General External Environment cont. • Technologicalopportunities • Increased use of robotics in manufacturing • Online purchasing • Technologicalthreats

12. InternalAnalysis • Strategic Managers’ Strengths • BLM’s CEO is very hands-on • Strategic Managers’ Weaknesses • BLM’s CEO is very hands-on • Corporate Structure Strengths • Organized into different product division • Corporate Structure weaknesses • Company is not organized around geographic market

13. InternalAnalysiscont. • Corporate Culture Strengths • BLM employees believe in the product • Company is very people oriented • Company emphasized open communication • Corporate Culture Weaknesses

14. Internal Analysis cont. • Production-Operation Strengths • Reconfigured layout to be more efficient • Production-Operation Weaknesses • BMI has over 100 suppliers • Marketing Strengths • Company Logo and Repeat Customers • Marketing Weaknesses • Narrow Target Market and Issues with Global Marketing

15. Internal Analysis cont. • R&D Strengths • Expansion of Facility • R&D Weaknesses • No Global R&D Facility • HRM Strengths • Tuition Reimbursement • HRM Weaknesses • Custom Orders create excess stress

16. Internal Analysis cont. • Information Systems Strengths • Access to Online catalogs, magazines and direct mail make sure employees and customers are well informed • Information Systems Weaknesses • Web site is only in English

17. Strategic Issue Example • What is the issue? -average customer is a married man in his mid- forties with an income of 79k. -The fact is that BLM’s target market is very narrow • Why is this an issue? -51% of the population is female -significant marketing opportunities being missed

18. Strategic Alternatives What:Offer more bikes that are tailored to fit women How: Find out what female riders want in a motorcycle. (ex. Online survey) Who: The marketing area is responsible for creating and administering the surveys. When: Immediately Where: In the U.S. market. The implementation plan will determine where the new product will be produced.

19. The “3” Alternatives What: Offer more bikes that are tailored to fit women. Most of the company’s bikes are heavy and designed for men./ What: BLM should advertise and promote its current line motorcycles. What: Acquire an established motor scooter manufacturer. That produces a two-wheeled vehicle with a step through frame that’s light weight, maneuverable, and stylish designs that might have a strong appeal to women.

20. Recommendation • Alternative 3 – because they could appeal to a wider variety of consumers and exchange “tricks of the trade” to create better products in the future. • Implementation- will take all of the following • Changes in Organizational Structure • Changes in Organizational Culture • Funding