Mike's bikes strategic plan

Table of Contents Page

Executive Summary 2

Mission Statement 3

Situation Analysis 3

SWOT Analysis 4

Business Resources 5

Business Strategy 6

Financial Projections and Budgets 7

Works Cited 8

Executive Summary
Dirty Bikes is a company that concentrates in the engineering of high quality mountain bikes. Our headquarters are located in Philadelphia, Pennsylvania. Dirty Bikes looks to give our consumers the gratification with supreme mountain bikes. This business plan holds the purpose of providing information regarding the goals and regulations of our company. Incorporated is a detailed SWOT analysis, a thorough section concerning the chief employees of Dirty Bikes, strategies that we plan to accomplish, and financial projections and budgets.

In an already established market, our initial goal is to find a footing in the field and create a firm user base. We will do this by selling our bikes at medium price, and by supplying an average quantity. By offering unique and effective advertising campaigns and business services, we hope to gain recognition, and therefore profits for our company. In order for us to make a successful transition into the mountain bike market, we must find the most effective time to expand our operations. We will look for a time when customers are most ready to buy, and push our product from there. This report includes the evaluation our financial structure based on our customer’s willingness to buy and the funds put into various aspects within our company. The forces that impact our company, competitive, economic, legal and regulatory, technological, and socio-cultural are all discussed within the situation analysis section.

Dirty Bikes will utilize multiple forms of modern technology to bring a better experience to the customer. Our website will allow customers to design and customize their own Dirty Bike mountain bikes, as well as offer online customer support and information. Not only will we be easing the process of buying with new technology, but we also plan to maintain a positive relationship with the community and environment around us. Our employees will participate in community outreach programs, and all of our production facilities will maintain strict environmentally friendly protocols.

Dirty Bikes has the prospect of an increased quantity of retail sales profit, which goes parallel with an increased amount of public relations and advertisement funds. Advertisement and public relation are big parts in our company, since our reputation and recognition is how our customers discover new products within our company. Dirty Bikes plans to make a major effort in all of these different facets of the business plan in order to start making a profit in the mountain bike market.

Mission Statement
Dirty Bikes specializes in the production of high quality mountain bikes. We look to bring customers satisfaction by maintaining high service standards throughout the entirety of the purchasing process.

Our success relies on everyone in Dirty Bikes. From our employees all the way to corporate headquarters, we plan to build a successful business model that will gratify both retailers and investors alike. We believe that if our investors will be contented only if our customers and retailers are satisfied.

Situation Analysis
Competitive Forces

In an already very mature industry, Dirty Bikes has to be competitive and create a well-known brand. In order to do that, we will first sell medium cost and medium quantity bikes. We know there are a lot of competitors in the industry, and we have to overstep them by having better and more accurate advertising. We will provide our bikes at retail stores and sport stores. In order to let our brand be recognized, we are going to supply our products mostly to college students who live in cities. Dirty Bikes will have outstanding after sell services, and we will provide service at various locations. Services included are warranty, free shipping, and discount coupons. These will create a competitive advantage over other prosperous retailers.

Economic Forces

Proper timing is an extremely important commencement factor, and Dirty Bikes will select a time when there is an increase in consumer income, as it will trigger customers to have more unrestricted money to invest. If there were a recession, we would invest fewer funds into advertising and even hold off entering the market. Dirty Bikes will pay consideration to any future changes that could cause the demand of bikes to increase, and concurrently we will be prepared to increase our production and price.

Legal and Regulatory Forces

Dirty Bikes manufactures high-speed bicycles, and while we care about our customer’s safety, we are not liable for any injuries due to carelessness or improper riding protection of the consumer. Dirty Bikes has many different, outstanding and unique designs. In order to protect our rights, we have some patents about our products. We would take legal action if any company embezzled our design. As mentioned, we are not responsible for user’s own mistakes, but we do take all responsible for malfunctions that occur to the production of our bikes. We will fix our fault and pay for customers’ lost.

Technological Forces

In a business world where technology is advanced, our company will deliver the best technologies for our consumers. Dirty Bikes will use the top technology to produce high quality bikes, so that our Bikes look and perform great. We will make our production process most efficient by using the latest, up to date machinery. Dirty Bikes focuses on researching about what costumers like and need via online questionnaires and face-to-face marketing. We also have a special “build-your-own bike” creation tool online, which allows customers to construct their own personal and unique mountain bike. It gives customers the choice of color and shape, and they can even put their names on their bikes. By keeping up with technology and adding interest features, we will achieve high stockholder value and provide higher quality products.

Socio-cultural Forces

Socio-cultural forces are a major concern of our industry. Dirty Bikes will value its reputation, so the company will give a certain amount of profit to local communities. Providing a green environment is essential for our company, and we will continue to be environmental friendly. In order to achieve this, we will organize our employees to plant trees and try to keep our manufacturing buildings environmentally friendly, which we hope will give Dirty Bikes a helpful, green-friendly status.

SWOT Analysis
Strengths

· Our high quality mountain bikes offer guaranteed durability for at least 50 years. This is an internal factor because it is an entity added alongside the product by the business.

· Strong relationships built with manufacturers and distributors, leading to exclusive deals. This is an internal factor because it applies to the relations the business itself has with others levels of production, and not with any others.

· A wide selection of goods. This is also an internal factor because Dirty Bikes is able to produce a wide variety of designs and mountain bikes with different specs, suiting almost any customer in the biking market.

· Dirty Bikes is able to spread their fixed costs over a larger area as their sales increase, meaning that their profit margins would increase accordingly (similar to economies of scale). This would be an external factor because it relates to the production and sales of Dirty Bikes’ mountain bikes, and not those of competitors.

Weaknesses

· It is hard to predict exactly what customers want at certain times, so in turn it would be hard to know what designs and specs the develop more/less. This would be internal because it would be needed to help the Dirty Bikes produce the right designs/specs.

· Pleasing all customers with the bikes available would be difficult because the market has varying opinions and needs, and it is almost impossible for Dirty Bikes to produce one single bike, which satisfies all of these needs. This would be an internal factor because Dirty Bikes would need to research the needs/wants of the market and use the results to determine the optimal bike to produce the most.

· Some bikes are bound to have a fault, which could result in angry customers. This would be internal because Dirty Bikes would need to ensure that all production steps of each bike go smoothly and safely.

Opportunities

· People will always be riding bikes, regardless of the economic situation. This is external because it allows Dirty Bikes the chance to keep designs and specs functional yet modern with the day and age.

· Dirty Bikes recognizes the problems with distributing at unnecessary locations and focuses on those, which are dominantly popular. This is an external factor because it eliminates irrelevant (or at least irrelevant in comparison to other) distributors.

· Our company plans to offer an online site where customers can go to look at our models, and have the possibility to buy our bikes with extremely little stress. This would be an external factor because it allows Dirty Bikes to extend its reach to far more potential customers.

Threats

· Other mountain bike companies may be offering similar bikes at different. This would be an external factor because competitor’s products would be the deciding factor as to if Dirty Bikes design and ideas would be considered unique and one-of-a-kind.

· Customers may not agree with the natural resources gathered for the bikes. Examples may be: too close to suburbs/cities, or unfair for workers. This is an external factor it is purely dependent on the publics opinions

· The possibility of other businesses offering their products without involving intermediaries (like distributors). This would be an external factor because it would let Dirty Bikes know if competitors are offering faster delivery and eliminating some of their costs by doing close to all of their production process themselves without having to involve others.

Business Resources
Each member of our team is an essential part in order to succeed. In order to have an efficacious operation, Dirty Bikes employees are hardworking and industrious individuals. The Dirty Bikes Chief Executive Officer, Kristin Anderson, oversees and manages everyday business activity. Our CEO directs and supervises decisions involving our company. Our Chief Financial Officer, Hector Wong, advances the company by prudently scrutinizing facts and figures. By such examination, Wong is able to sensibly decide the best assessment involving our company’s finances. Joel Berryman, the company’s Chief Marketing Officer, has the responsibility of consolidating and designing the company’s marketing activities with his distinct advertising and overall general business skills. Our Public Relations Officer, Tianze Ma, goes above and beyond with our company’s clients by reaching out and investigating what makes our customers satisfied. By keeping our customers pleased and the Dirty Bikes reputation presentable, we can progress forward with our corporation. Our company’s Executive Assistant, Elliot Beatty, gives reliable feedback to the achievement of our everyday undertakings, and assists in bringing external significant information in order to advance our products.

Financial resources available when first taking control of Dirty Bikes include shareholder’s contributions, initial company’s production funds, and conceivable, new company production profit. Our shareholder’s resources are extremely vital and help with the primary creation of our company’s establishment. When taking control of Dirty Bikes, we utilized whatever revenue we obtained from the initiation. Production is an important financial resource, as well. If we continue to have customers buying our products, we can continue manufacturing such products. Prospective financial resources could possibly include equity, if in the future it were compulsory.

Business Strategy
Objective 1: Bring stock price up to $15

Target Date: February 15, 2013

Strategy: Lower price, increase production, increase advertisement

These 3 factors will help us liquidate our product, whilst letting consumers know that we are here and that we exist. Lowering prices will bring more of an appeal to customers, having more products to sell will help us keep our production on top. Increasing advertisement will help spread our customer base and the popularity of our product, a highly significant aspect contributing to a consumer in the mountain bike market. This will help us catch up with our competitors, as well as ultimately spread awareness of our brand. Liquidation could be just what we need to put us back on the track.

Objective 2: Focus on quality products to bring stock price to $25

Target Date: February 22, 2013

Strategy: Invest in research, decrease profit margin

By investing in research, we intend to create cutting-edge renovations to our products. Investing in research will be costly, and while we intend to still be a profitable business, value is optimal to a consumer. By only slightly adjusting our product’s price to mend the rectifying costs, we plan to show consumers we are a true sports bike company that is enthused in making great products for highest customer satisfaction, attracting a continually growing customer base.

The progression from Objective 1 and Objective 2 will be the adjustment in price. While we are essentially liquidating in Objective 1, Objective 2 will equip us with real, effective products that have an edge on others. Keeping profit margin small will offset the pricing and production cost imbalance/spike through absorbing research costs internally.

Financial Projections and Budgets
Marketing and Sales Information

2012

2013

Retail Price

735

700

Advertising Expenditure

$750,000

$1,025,000

PR Expenditure

$500,000

$500,000

Planned Production (Units)

17,500

17,500

Actual Sales Units

17,002

19,590

Estimated Lost Sales

0

2,501

Accounting Information

2012

2013

Costs of Goods Manufactured

$4,464,250

$4,110,520

Sales

$5,723,975

$8,122,706

Cost of Goods Sold

$4,545,542

$4,064,912

Gross Margin

$1,178,433

$4,057,794

Gross Margin (%)

21%

50%

Forecast Marketing and Sales Information

2014

2015

2016

2017

2018

Retail Price

730

730

740

745

750

Forecast Sales Units

16,500

16,500

17,000

17,500

18,000

Forecast Retail Sales $

$12,045,000

$12,045,000

$12,580,000

$13,037,500

$13,500,000

Advertising Expenditure

$800,000

$850,000

$850,000

$875,000

$900,000

PR Expenditure

$500,000

$500,000

$525,000

$550,000

$600,000

For the next few years, we will continually put money into our advertising expenditure. Advertising is an immense part in our success, so the persistent increase in funds will optimistically be advantageous for production selling. Public relations, similar to advertising, supplement the accomplishments of our company, which is why funds for public relation expenditure will incessantly be augmented as well. We hope that advertisement and public relation will help attract and maintain our customers. The retail price of our quality bikes will gradually increase, although not by much, in the next few years. This growth in retail price will expectantly be accompanied with the growing escalation of profit. Also with such hopeful escalation, the sales unit will be increased. Our expectation for the next few years is that people will recognize our products through advertisement and public relation. We hope individuals purchase our mountain bikes, and want to continue to purchase from Dirty Bikes.

Works Cited
McHugh, J., and McHugh, S., and Nickels, W.G. 2012. Understanding Business. Boston: McGraw Hill,

Wolf, S. “Mountain Bike”. Retrieved February 2, 2013, from

http://stevenjwolf.com/mtbike/

“Business Plans & Financial Statements Template Gallery”. score.org. Retrieved

February 2, 2013, from http://www.score.org/resources/business-plans-financial-

statements-template-gallery

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