Today in Canada, inflation, cost of materials and unemployment are fairly low an

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Today in Canada, inflation, cost of materials and unemployment are fairly low and are not increasing. Emerging economies are growing more rapidly than the Canadian economy in general. Foreign trade is relatively open, so manufacturers face intense international and local competition, with pressure to keep prices low and opportunities to utilize low-cost labour and raw materials from around the world. New manufacturing technologies, futuristic materials, and e-commerce are becoming more prevalent and affordable. The political-legal climate is favourable to business in Canada and most developing nations, whereas regulation is higher in the European Union. The standard of living is stable, the population is aging, and ethnic diversity is increasing.

Today in the bicycle-manufacturing industry, manufacturers must invest heavily in research and development (R&D) to complete effectively on a global scale. Domestically, the bicycle manufacturing industry is fragmented, with the largest firm, BikePro, controlling just 24 percent of sales. The industry's customers are primarily local, independent bike retailers, a very fragmented group. The internet and eBay in particular, provides alternate channels for new and used bike sales. Bike riders, the ultimate purchasers, are interested in style, comfort, and high-tech features, as well as environmental and health issues. Suppliers of many bike components are small local manufacturers located in developing countries. However, few suppliers are more powerful, such as Humano, and internationally known maker of bicycle components and cycling gear. Regulators are not a significant force for bicycle manufacturer, but BikePro and others have numerous joint ventures. In one example, BikePro teamed with CSD, Shoetopia and other companies to produce the high performance cycle used by Olympic gold medalist Daniel Croft in the Tour de France and other races.

BikePro has excellent R&D capability and effectively utilizes low-cost manufacturers in producing the more affordable products in its broad line of bikes. However, its Halifax factory produces its high end lines and can customize a bike to a customer's exact specifications. BikePro is beginning to push to improve the customer bike-buying experience. The company will limit the number of retailers it uses and requires retailers to stock a higher percentage of BikePro's products. In returns, it will provide training and funds to improve in-store marketing and increase customer loyalty.

1. Complete a SWOT analysis using the four Quadrants layout.

2. Develop major strategies using the match between strengths and threats

Explanation / Answer

Answer1:

Strengths:

- High bargianing power as suppliers and distributers are both mostly fragmented

-Huge investment in R&D enabling Bike pro to manufacture differentiated and highly customised products as per customer demand

-Developed low cost manufacturing

-Strategic tie up with CSD, Shoetopia and other companies

-Brand endorsement by olympic gold medalist=-caters to the requirements of multiple customer segments

Weakness:

-Low significant customer loyalty

-In store marketing is not upto the mark

-Customer bike buying experience is not so good

-Customer are highly demanding

-Manufacturer of grears and cycle components have high bargaining power

Opportunity :

-With economies of scale new manufacturing technologies, futuristic materials are beoming increasingly affordable

-E-commerce becoming popular and affordable offering alternative sales channel

-Relatively stable political-legal environment

-Increased focus on going green ,being environment friendly

-Relatively high disposable income of the consumers and stable economy

-Market is highly fragmented and there is an opportunity to consolidate  

-Manifacturing Regulations are not very strict

Threat:

-Open trade policies exposes cycle manufacturer ( Bike Pro ) to competition from foreign brands and local competition with increased pressure to reduce cost and fear of loss of market share

-Availability of cheaper mode of transport

Answer 2: The major strategies can be listed as below:

- Increase market effectivity by focusing on select retailers , train the staffand invest to improve customer in store experience

-Leverage e-commerce channels to increase online sales

- lobbying with environmentalists and policy makers to increase the thurst on Go Green

-Tie up with fitness and health centers and tap the customers who are health conscious by organizing events like cycle marathons,fitness camps and increase brand awareness

-operate cycling training centers to promote cycle riding

-Vertically integrate for certain cycle components and cycling gears

-Participate in trade shows , sponsor sports persons for increasing brand visibility

- Leverage digital marketing to provide downodable map for cycle treks, sales information and run slae promotions

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