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Rolling Spokes

This comprehensive analysis examines Rolling Spokes' financial, marketing, and operational performance, offering insights on decreasing sales, marketing strategies, operational efficiency, and long-term goals for market leadership in the mountain bike industry.

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Rolling Spokes

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Presentation Transcript

  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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