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Bad As Bikes

Bad As Bikes. Selah Manley Nikki Reilly Sara Sutton. 201005574 201006070 201006245. Bad as Bikes Company Overview and Strategy.

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Bad As Bikes

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  1. Bad As Bikes Selah Manley Nikki Reilly Sara Sutton 201005574 201006070 201006245

  2. Bad as Bikes Company Overview and Strategy • Financial Results: Sales: $27,131,525Units sold of Mountain Bike: 33,480Units sold of Road Bike: 8,663Profit (after tax): $5,372,328Share Holder Value: $49.91 • Costs:Cost of Mountain Bike(Adv1) : $620Cost of Road Bike (Bolt): $1,750 (released 2014)Cost of goods sold: $11,701,415 • Overall Strategy:- High Price, Moderate Volume • - Emphasis on quality for Bolt Road Bike • - Focus production primarily on Mountain Bikes

  3. Financial Analysis • Reduce debt (abolished all debt by 2016) • Large amount of dividends issued, cents per share is now $7.39 • Will maintain pricing between 280-300 cents per share for upcoming years • 420% increase to $49.91 in SHV in 2017 • From 2015 to 2016, wholesale sales increased 29.4%. • From 2016 to 2017 Sales increased another 23.3%. • Profit after tax increased by 19.8% ($5,372,328 in 2017) • Cost of Goods Sold (%) steady decrease

  4. Marketing Strategy Branding • Increased product branding expenditure from $500,000 to $900,000 Distribution • Distribution in Sport Stores: 0.20 to 0.32 • Distribution in Bikes Shops: 0.66 to 0.52 • Advertising/Public Relations • Advertising Expenditure = $3.35 million • Public Relation Expenditure = $2.25 million • Public Relation Rating = 0.16 for Mountain Bike 0.48 for Road Bike • Awareness Rating = 0.34 for Mountain 0.27 for Road

  5. Operations Strategy Quality, Sales & Retail Pricing • Quality rating averaged 0.80 over past three years (with .81 in 2017) • Road Bike Industry for 2017: sold approx. 1,000 units less than Wheelin’ & Peelin’ still managing to top their retail sales by more than $6,000,000. Inventory • 4,154 Bikes left in inventory at the end of year 2017. Capacity • Increased capacity to 40,000 in 2017, bumping capacity up 15,000 bikes • Wastage and Idle Time • Wastage =40% for Mountian Bike46% for Road Bike • Lower than both major competitors Buckle’$ Bike$ and Wheelin’ & Peelin’ • Current idle time is 0%, tied with Buckle’$ Bike$ for lowest in the industry.

  6. SWOT Analysis of Bad as Bikes Strengths • High Quality Rating • High Distribution in Road Bikes • Secure in the high price/high quality road bike niche Weaknesses • High Wastage • Poor Projections leading to excess inventory. • Poor Forecasting within Bad as Bikes

  7. SWOT Analysis of Bad as Bikes Opportunities • Potential to launch into Youth Bike Market • Unmet demand for low price youth bike • Potential for more sales in mountain & youth • Buckle’$ Bike$ decreasing quality could lead to potential to steal sales in road bikes • Threats • Loss of sales to competition • Buckle’$ Bike$ successful youth bike product launch resulted in high unit sales • Elite is well established in the youth bike industry with an extremely high distribution level • Bad as Bikes distribution is extremely low for Discount Stores (margin % = 20%).

  8. Positioning Chart

  9. Future Objectives • Launch of Youth Bike • Maintaining High Expenditure on Quality & Efficiency • Branding, Advertising & Distribution Spending • Increase Market Share • Maintaining low D/E, driving SHV

  10. Recommendations Launch of Youth Bike • Create a strong presence with high spending in advertising • Produce an initially more expensive model with a lower SCU number • Price aggressively low • An emphasis on advertising Maintaining High Expenditure on Quality & Efficiency • Maintain a quality rating above .81 • Increase capacity • Stay current

  11. Conclusion of Analysis

  12. Question and Answer Period

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