Read the case titled “The Global Bicycle Industry” on page 57 of the Essentials of Strategic Management textbook. In this case, it is more about the industry as a whole, but it can be examined with a specific problem with a company or the industry as a whole. So, you could speak to the problem as an industry problem and offer alternatives. Or you can speak to a specific company’s problem relative to the industry.
Then complete a case note based on the following guidelines.
Your case note should be in the format of a two-page single-spaced Executive Summary on the case assigned. Use APA format to cite sources. You are required to cite the textbook and at least one outside source from an academic peer-reviewed article.
There is no need for a title page. A reference page is required. The reference page does not count towards the page count. Use 1-inch margins and 12-point font. Page numbers and your last name should be in the upper right corner. It is best to place it in the header. (e.g., Laing, Page 1).
Review the Case Note Format below, the Case Note and Case Study Criteria and Guidelines page, and the Case Note and Case Study Rubric to ensure you approach the case correctly
NOTE: Do not simply answer the questions at the end of the case.
Case Note Format
Your report should follow the format below in sentence/paragraph form using APA format to cite sources:
Introduction of Firm
Overview of Firm Competitive Advantage
Problem(s) Statement
Alternative Solutions – Solutions/Opportunities
Option 1 Analysis
Pros
Cons
Option 2, Analysis
Pros
Cons
Add More Option Analyses as needed
Decision and Support
Action Plan
References in APA format
The Global Bicycle Industry
Abstract
The worldwide bicycle Industry is a major contributor to the world’s biggest economies. According to the 2017 report, the industry is expected to reach $34.9 billion by 2022, following a 2.7% compound annual growth rate. The sector is home to one of the largest manufacturing and production companies across the world. Over the last decade, the industry has maintained a very high competitive power in the transport industry due to the rigid industry-specific strategies in place to facilitate the adoption of the bicycle as the loco mobile of the future. The industry has capitalized on technological advancements and the growing demand for green transportation to increase financial gains and market penetration. One of the most significant challenges facing the bicycle Industry is marketing and advocacy for modern bicycles to be seen as a viable option in the transportation industry. Critics argue that the sector needs rigid marketing structures and policies to reach a broad market. Investment in marketing will tap into the potential demographics to revolutionize the global bicycle Industry.
Keywords: Global Bicycle Industry, Competitive power, Technology, Green transportation, Industry-specific strategies
The Global Bicycle Industry
Introduction of Industry
The Global bicycle industry is a booming business that contributes to the world’s greatest economies. It is a complex industry made up of manufacturing and production companies fueled by technology and innovation to develop modern, high-quality bicycles. The bicycle industry entails a basic geometry algorithm that is less likely to be overtaken by the automobile industry. Over the last decade, there have been rapid innovations in the bicycle industry, such as the manufacturing of electronic motor-assisted bicycles. Manufacturers are working around the clock to provide tailor-made bicycles to suit different functions and activities.
Overview of competitive advantage
Over the years, the bicycle industry has maintained cutting edge performance in the financial market, technological advancement, investor acquisition, and sustainable development. The industry has maintained a relatively high penetration rate across the world. The financial income and general investor partnerships in the business environment strike equilibrium. With its existing models and custom made designs, flexible and lightweight medium of transportation, the industry has gained a competitive edge amidst the ongoing rise in automation. The ability of the bicycle industry to produce high quality, lightweight frames, electronically enhanced gears, provides a broad range of segmentation that topples over the technological innovation threshold (Charles & Gareth, 2012). Emerging trends and user preference in the bicycle industry has dramatically changed the world view of the technical and sustainable developments fit for nations. As a result, the Global bicycle industry has experienced skyrocketing profits, with the industry expected to reach $34.9 billion by 2022, following a 2.7% compound annual growth rate according to the 2017 biking Industry forecast.
On the other hand, bicycles are a relatively low-cost mode of transport as they use, thus maintains a high competitive power in the transport industry. The modern revolution to save planet earth from harmful gas emissions from cars and trucks has caused incremental growth in bicycle ownership and purchase. Governments are endorsing the use of bicycles as an alternative to reduce air pollution emanating from vehicles and also to decongest the cities. For example, the European Government issued a directive to offer complete support to countries that swap from conventional fuel-driven vehicles to bicycles as the primary form of transport.
Moreover, the bicycle Industry continues to top the financial charts for its low-cost manufacturing and high returns on profit. The rise in automation in Asia has opened up the continent to potential investors who venture into the manufacturing industry. Low prices of operation, availability of labor favors manufacturing as well as innovation of electric motor bicycles in the Asian frontier. Additionally, bilateral agreements between countries in Latin America to facilitate free between countries have caused a vast surge in the worldwide bicycle market. Moreover, the relatively low cost of labor in Mexico provides a conducive environment for the bicycle market to thrive.
Problem statement
Although the bicycle Industry is redefining the transportation sphere through modern and high-quality bicycles, the industry brushes through significant challenges. The recent surge in the number of manufacturers in the market has dramatically affected the quality and price of bicycles. The bike Industry has experienced much rivalry and takeovers from online based suppliers. Some of these brands consciously impose attractive discounts on newly developed bicycles to attract customers (Charles & Gareth, 2012). Following this, significant brands incur significant losses that hinder growth and performance in the global market. The entry of new markets without background knowledge and business propositions lowers industry credibility and recognition. Bicycle critics have questioned the quality of these bicycles following the fast turnaround time and the low prices in the market. The source and authenticity of raw materials have become a growing concern for most bike specialists. The continuous invasion of these companies has limited the growth and performance of the worldwide bicycle market, leading to the closure of independent popular brands and workshops across the world.
The global bicycle business is also suffering from low uptake in the market due to safety concerns. Bicycling causes a large percentage of accidents on the road. Historically the bike is a preferred alternative to walking in developing countries while in wealthy countries, bicycling is mainly for leisure and sporting activities. However, with the ongoing rise in urbanization, bikes have become a regular mode of transport in major cities. At the same time, limited and sparse infrastructure exposes bikers to huge risks on the road. Bicycles such as the e-bike, folding bikes have different features that require special cycle tracks (Meghan, et al., 2018). Lack of proper infrastructure to support these bicycles affects the industries’ sales and penetration into broader demographics.
As expected, the bicycle industry faces a massive threat from the automobile industry. The advent of the e-bike elicited a lot of criticism and rivalry from the car world. The automobile felt threatened and belittled amidst the growing preference for green transportation. However, critics argue that consumers will never purchase an e-bike that costs almost the same price as an automatic car.
Alternative Solution
Option 1
One of the solutions to resolve the growing conflict between independent and large scale companies is to offer service and expert advice on all sales. For any industry to blossom, there must be a strong foundation based on a firm-specific strategy. These strategies should resonate with business growth performance and achieve a high purpose. For instance, retailers can roll out a hiring scheme. Through this, they can easily convert a hirer to a potential customer. On the other hand, critics argue that it is increasingly challenging to make a sale if the business operates a hiring program.
Option 2
For the world to shift attention to the innate potential of the bicycle replacing fuel-driven vehicles as the most viable transport option, the bicycle Industry needs to advocate for investment in bicycle infrastructure for governments to upgrade accordingly. To reach a broader market, the industry must ensure that bicycles cause minimal accidents to gain the trust of the users as well as Industrial recognition. Advocating for bicycle infrastructure is less costly and contributes to the green transport strategy globally (Meghan, et al., 2018). However, setting up cycle spaces and routes in the already connected road and rail networks in major cities is a complex and integrated process that will take a long time. As a result, the bicycle industry will continually experience low sales which simultaneously affects the overall growth and performance of the bicycle industry in the
Option 3
The bicycle industry should capitalize on reaching the potential demographics to change their mindsets of the e-bike. The market structures and policies should match the message to make a significant impact. Through this, this industry will be able to change the trajectory of sales and market penetration.
Decision and support
Amidst the rising effects of air pollution and congested cities, the future of civilization relies on sustainable modes of transport such as the e-bike. The most rational and practical approach to facilitate this is to implement a strategic plan to change people’s mindsets about bicycles as the locomotive of the future.
Action plan
The message for green transport must reach the potential demographics to inspire change and advocate for cycling a cycling culture. Although it is a thinning incentive, it is crucial to steer on the course in the hopes of reviving the bicycle business back to life.
References
Charles, H., & Gareth, J. (2012). Essentials of Strategic Management. Mason: South-Western CENGAGE Learning.
Meghan, W., Michael, B.-C., Suzanne, T., Daniel, F., Lise, G., David, W., & Nelson, T. (2018). Impacts of Bicycle Infrastructure in Mid-Sized Cities:protocpol for a natural experiment study on three Canadian Cities. BMJ Open, 1-11.
