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Rolling Spokes

Rolling Spokes. An analysis of strategic, financial, marketing and operations results. Table of contents. View of Financial Results Rolling Spokes’ Marketing Strategy Operations Results Future goals, objectives and recommendation for management. Financial results.

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Rolling Spokes

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  1. Rolling Spokes An analysis of strategic, financial, marketing and operations results

  2. Table of contents • View of Financial Results • Rolling Spokes’ Marketing Strategy • Operations Results • Future goals, objectives and recommendation for management

  3. Financial results • Significant decreases in sales revenue and units sold • 2012: Decrease in units sold by 26% and sales revenue by 14% • 2013: Units sold decreased by 11% and 6% drop in sales revenue • 2015: Decrease in sales revenue of about 26% • Model 1 units sold declined by 89% • Model 2 units sold increased by 55% • Explanation for dropping sales • 2012 and 2013 • Poor marketing strategy, spent less money in early years in hopes of keeping net income above other firms in the industry • 2015 • Managers trying to phase out model 1, stopped producing in hopes of clearing out closing inventories, resulted in lost sales of approximately 16,000 units • Lowest contribution margin in the industry • Low price strategy means Rolling Spokes must sell more units to break even

  4. Profits after tax Year

  5. Marketing strategy • Price • Model 1: $510(fits into a low-price category) • Model 2: $565(fits into medium-price category) • Price has varied in model 1 over 8 years due to the lack of demand • Promotional Mix • Compared to competitors there was not very much money put into raising the Awareness Rating and Public Relations Rating • The funds put into these areas were not enough to meet targets • Place(Distribution) at .15 • 175 sport stores out of 800 • Ways to increase the number of stores to find a Rolling Spokes bike was to offer Support money and give a retail margin • RS’ Retail margin was 35%

  6. Operations results • Capacity • In 2014 and 2015, Rolling Spokes decreased the amount of SCU’s since it was not producing as many bikes. A result of the built up inventory • Increased dramatically in the last 2 years – Allowing us to produce more bikes to meet demand • Wastage • Failed to meet target of 1-10% (@ 31%) • No firm in the mountain bike industry has met this target (Industry Average: 22%) • While R.S increased Capacity in 2017, the wastage decreased; this was due to the amount spent on efficiency • Quality • Met target of .75 for all years, but 2016 • Competitors

  7. SWOT ANALYSIS

  8. Conclusion – recommendations Long term goal: To become a market leader in the mountain bike industry within the next five to seven years • Objective for Management: • Find optimal marketing strategy • Spend incrementally on brand awareness and distribution to increase ratings(unlike 2017) • Take advantage of potential market share • Maintain quality target • Ensure model 1 remains among one of the lowest priced bikes • Adjust accordingly to patterns in competitors strategy

  9. Questions & Answer Period

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