Category: Bicycle

This paper is the initial project architecture that describes the design methodology of the project of an electric bicycle. The purpose of this work is to identify the strategy aimed to implement the project and determine what resources and tools will be required to achieve the project goals. In addition, the paper divides the project into several stages and describes what is expected to be accomplished after each phase is finished.

Determining Basic Requirements

There are several basic requirements for designing an electric bicycle. These include the acceptable price of the vehicle, the expected time of usage and distance during the day, and the necessity of battery charging while traveling (Nasiri-Zarandi & Ebrahimi, 2018). In addition, it is advisable to define the type of application of the bicycle: urban or suburban, racing, or mountain (Nasiri-Zarandi & Ebrahimi, 2018). Conducting the research on the average market price and technical possibilities of the electric bicycle will be required to achieve the goals of this phase of the project. Once the basic requirements of the vehicle are determined, it will make the entire work and the future phases more precise as the image of the final project will be drawn.

Considering constraints, limitations, and technical details

The second phase is associated with deeper research regarding legal standards of designing an electric bike and the corresponding mathematical issues. First, it is crucial to consider the legal limitations for an electric vehicle in a particular country (Nasiri-Zarandi & Ebrahimi, 2018). The corresponding reference documents are in open access, and investigating them is required to complete Phase 2. Then, the essential aspect of the project is related to the technical details of the vehicle, including the required road power, which can be estimated by analyzing wind speed and ground gradient (Nasiri-Zarandi & Ebrahimi, 2018). Other factors that can affect the process are installation of the electric motor and selection of the battery (Nasiri-Zarandi & Ebrahimi, 2018). Achieving that will require solving some mathematical relations and review the correlated literature to create an appropriate mathematical model for the project. Once Phase 2 is complete, the project will be ready for implementation.

Reference

Nasiri-Zarandi, R., & Ebrahimi, M. (2018). Extracting requirements for design a two-wheels electric vehicle and proposing a design procedure. In 2018 9th Annual Power Electronics, Drives Systems and Technologies Conference, 462-468.

Introduction

In the contemporary business world, the market has become extremely competitive. In order for any business to survive in such an environment, it needs to be in a position to make the most effective decisions. For a family owned small bicycle retail shop business, this kind of business environment calls for the firm to come up with effective decisions in order to maintain its profitability in such an environment.

Key Success Factors in Family Owned Small Business

In order for a small business to maintain high level of performance in a competitive market, it needs to adhere to a number of success factors. These are aimed at increasing the competitiveness of an organisation in the market.

In this case, there are several similar businesses that are involved in selling similar products in the same area. Therefore, there is a very high level of competition in such an environment. In this case, the porter’s five forces can be applied in order to have a clear understanding of the industry and hence make appropriate decisions.

One of the porter’s forces is the bargaining power of the suppliers. In this case, the bicycles parts are brought by specific suppliers. The cost of these items can have a critical impact on an organization’s level of profitability. When the bargaining power of the suppliers is high, then the industry is less attractive (QuickMBA Par 8; Porter’s Five Forces).

Another aspect discussed by Porter is new entrants. New entrants into an industry increase the level of competition. This decreases the attractiveness of the industry. This understanding is very important in making critical decisions in the organisation. It is helpful in making any future decisions. For instance, the business may choose to expand its market in areas where there is no threats of new entrants.

It is also necessary for an organisation to consider the threats of any substitutes in the industry. The threat of substitutes can significantly affect the profitability of a business in a certain market.

Another aspect of the porter’s five forces is the rivalry. The intensity of rivalry is determined by the number of competitors in the market. It is also determined by the level of differentiation among other factors.

Measures to Overcome Competitors in Family Owned Small Business

The above discussion has revealed that the porter’s five forces analysis will be very useful for the small family owned business. After identification of the possible threats in the market, the business will be in a position to come up with the most appropriate solutions.

One of the ways through which the organisation can improve on its performance in the market is by minimizing its operational costs (QuickMBA par 3; Market Share). For instance, an organisation must be determined to reduce its overhead costs. For example, a small bicycle business can cut down its costs by eliminating unnecessary supplies and equipments. By so doing, an organisation will be able to under price its competitions.

An organisation can also increase its competitiveness by improving the level of customer satisfaction. For instance, the business may offer discounts in training those who buy the bicycles in their stores. They may also improve on the attendance and guiding customers in making their purchase choices. This will significantly help improving the organisation competitiveness.

4P’s Analysis (Product, Promotion, Place, and price)

For a small bicycle business to survive in a competitive market, it is necessary to have effective policies concerning the product, promotion, place and price.

The business must ensure that its products are stronger than other similar products provided by its competitors. It must also ensure that these products and services are always available and accessible to both existing and potential customers. This increases the level of customer satisfaction.

Price is also important in determining the performance of a business (Epstein 28). It is necessary to set a realistic price. Too high prices may lead to loss of customers. Finally, it is necessary to conduct promotions in order to inform potential customers about the product. This will help in increasing the level of sales.

Recommendations

This discussion has clearly shown that the bicycle industry has a high level of competition. This implies that it is important for a small business bicycle retail shop to adopt the necessary measures in order to maintain its profitability.

Porter’s five forces are necessary in proving an understanding of the industry. In order for a small business to survive in such an environment, it has to reduce its operations costs. This will help an organisation under price its competitors. An organisation must also be in a position to improve consumer satisfaction in order to retain them.

Works Cited

Epstein, Kevin. Marketing Made Easy. Canada: Kevin Epstein, 2006.

QuickMBA. “Market Share.” Quickmba, 2010. Web.

QuickMBA. “Porter’s Five Forces. A Model for Industry Analysis”. Quickmb, 2010. Web.

Giant is a Taiwanese manufacturing company which is popular for making bicycles. It is in china, Netherlands and Taiwan. One may ask: How far has Giant commanded the bicycle industry? The Taiwanese giant bicycle brand is unique in its model.

The model of these bicycles is described in the factors as follows: road, comfort, mode, specialty, mountain, family cycling and indoor cycling. It should be with much interest, to note that the classification criterion caters for factors such as age, purpose, environmental conditions, finances, as well as durability to highlight briefly (Upham).

In the model of the giant brand of bicycles, three key areas dominated the birth of their bicycles. They include: the frame of the bicycle; the joints and the alignment of the wheel as well as the gear. The compact road design made in 1995, for example, was said to be lighter and stiffer because of using a rear triangle that was relatively smaller and a top tube that was sloping.

Another reason was because of using less material. Its speed was also exceptionally high thus placing itself at a position of much envy from the competitors. The model also ensured that resistance by was reduced to the minimal level best.

These giant brands came in different sizes, which include large, medium, and small ones. Through innovation and the spirit of competitiveness, the company was able to come up with a model that was possible to adjust the height

Giant was able to come up with a particularly powerful model in 2006 known as maestro suspension. This model creates a floating point which in effect reduces the pedal bob and enables the rear wheel to travel vertically. Very amazing! Is it not? All Giants models are meant to address the people’s needs and guarantee them the comfort much needed in cycling.

The brand being manufactured by a Taiwanese company is exceedingly appealing too. Taiwanese, being known for their riding behavior, one can guess how this company is likely to pick. It is a fact that this company has undoubtedly initiated a revolution in the bicycle industry. The question one may put across is this: how and to what the largest bicycle company in the US was extent has it influenced the industry world-wide? (Yu)

In 1980’s, Giant would have to dare operate in the midst of leading companies, which produced the high and middle quality bikes while it produced cheap and low quality bikes. The innovativeness and competitiveness of Giant produced relatively cheap bikes and of convenient quality, which became a preference of many. Bigger companies had to compromise some of their policies to avoid becoming irrelevant in the industry.

Today it is not possible to talk of bicycles without mentioning Giant. Its presence is felt almost everywhere. Cycling is an extremely awesome experience in Taiwan. In all cycling ventures, safety is key in Taiwan. An extremely vital aspect in Taiwan’s cycling is freedom.

People can stop at the places they consider fancy and admire them. This consequently becomes culinary culture. Moreover, an individual can enjoy the local delicacies which are easily obtainable from the streets. There are various cycling routes which one can follow. In all cycling activities, it is imperative that an individual complies to safety rules.

Works Cited

Upham, Phineas. “Innovation and the interrelatedness of core competencies : how Taiwan’s giant bicycles broke into US bicycle mar.” Managing global transitions, 2006. Print.

Yu, Fu-Lai Tony. Entrepreneurship and Taiwan’s Economic Dynamics. Berlin: Springer, 2012. Print.

Abstract

Pricing is one of the most fundamental issues that entrepreneurs have to consider while marketing their products. This case study examines the issues that relate to the price that Schwinn bicycles charges their customers. The study will answer questions that relate to the strengths, weaknesses, opportunities and threats of the enterprise in relation to the pricing strategy that has been adopted by the firm.

Strengths and weaknesses of Schwinn

Strengths and weaknesses are internal factors that determine the success of a business enterprise¹ (p. 122). The strengths of the enterprise are evident from the durability nature of the company’s brands. As a result, the enterprise used to be a leading distributor of bikes.

Owing to the quality of the brand, the enterprise was the best seller of bicycles and it edged out all its competitors in the market. Some of the weaknesses of the enterprise are bankruptcywhich the firm witnessed in 1992. As a result, the company was unable to pay the suppliers and lenders.

Unfortunately, the company was sold to Chilmark investment fund for an amount of forty three million dollars. The reorganization of the firm led to the reduction in workforce from three hundred employees to one hundred and eighty employees.

Opportunities and threats

Opportunities and threats are factors outside the business enterprise that determine the success of the business¹ (p. 123). One of the opportunities that Schwinn has is relocating to the west. This is a move which will attract a young workforce which is very preferable in the bike industry.

Focus on product design is yet another opportunity that the firm has. The firm has developed a new brand of mountain bikes that sells at considerably high prices than the previous brands. Although the prices are higher than they were before the company was sold, a lot of people are purchasing the bikes.

Threats being faced by the company emanate from the fact that cyclistsprefer trendier mountain bikes with upright handlebars, additional gears for climbing, padded seats and fat tires. As a result, the company faces challenges of image making cyclists to go for brands from other manufacturers. Bikes manufactured by the company are considered to be old fashioned.

Importance of making mountain bikes in America

Mountain biking is a sport in the United States of America. Thus it is important to manufacture the bikes in America so as the specifications are in accordance to the requirements of the cyclists. There is a huge market for mountain bikes made in the United States than for those which are made from other countries.

Schwinn’s Strategy of selling bikes from $100 to $2,500

The bicycles whose prices range from $100 to $2,500 are of exclusively high quality and they have been designed to meet the market needs.Therefore, many cyclists will prefer to buy the bikes. Thus, deciding to sell the bicycles at such prices will increase the sales of the company.Target markets for those bikes include kids, college students and retirees.

The decision by Chilmark to invest $50 million in Schwinn is a move which allows the company to expand its operations. Since the new company has a large capital base, they are able to invest in sustainable projects that improve their sales.

Break-even point in units = Fixed expenses / Unit contribution margin,

Retail market=4% of $2.5 billion= $100million

Mark up =20%*$100million=$20million

Unit contribution margin=25%*$20million= $5million

Thus B.E.P = $50M/$5M= $10 million

Pay-back period= Initial investment/ Returns per year

50M/10M= 5 years

Cost of bikes sold in a year= $100 million.

Price of each bike=$400

Therefore number of bikes=$100M/$400= 250000 bikes.

References List

1. Ferrell, OC, Hartline M, 2010 Marketing Strategy. Mason: South Western Cengage Learning, 2010.

Introduction

Any prosperous small commercial start-up ultimately faces the challenge of dealing with business expansion. The increasingly competitive business arena requires companies to continuously change strategies to remain competitive. During the last three decades, organizations have realized the importance of integrating business models with technology. Considering that all organizations are aware of this fact, every business endeavors to utilize new and emerging technologies to stay ahead of competition (Broadbent & Weill, 2009). The current study examines the Shore and More Bicycles situation in seeking to establish a technology infrastructure to support the expansion strategy of the company.

Aspects to support the growth strategy of Shores and More Bicycles

IT infrastructure is a core organizational competency that is essential for organizations to continue and flourish in the increasingly dynamic and competitive commercial environments. Organizations grow domestically and globally to gain access to strategic markets, assets or advance new capabilities. It is imperative for the strategists to evaluate whether or not the new technologies will actually present inclusive improvement of the organization’s competencies and competitive edge.

Human capital

In order to develop an IT infrastructure, there must be human effort to execute the different roles involved from the development of the technology itself, implementation, evaluation, and finally use the technology to achieve the goals of the organization. IT personnel possess expertise essential in developing the necessary technology to meet the objectives of the organization. These experts work collaboratively in cross-functional groups using diverse technologies to attain a common goal.

Subsequently, they expedite peripheral bridging and assist the company to respond to alterations in its environment. Additionally, the experts afford the required linkage of the entire organization irrespective of the size. The personnel further possess the capacity to rapidly develop or alter commercial applications to meet the requirements that allow for the swift structural reaction to changes. They may also possess membership to tactical teams whose task is to articulate IT tactics in accordance with the structural approach.

The fact that Shores and More bicycles have competent IT personnel does not dismiss the idea that experts experienced in the proposed system are critical to the successful implementation of the technology. TAAS is a relatively complex system for IT experts considering the time it took to develop and the components that comprise it.

Economic

IT infrastructural development requires an organization to invest in research and development, software, hardware and labor. In introducing technologies to an organization, labor consumes most of the financial resources dedicated to the initiative. An organization requires being financially endowed to ensure the success of an IT infrastructure initiative. Software, hardware and labor costs are among the aspects that a company requires to ensure that they are adequately catered for prior to initiating a project.

Shores and More Bicycles Company is financially endowed to meet the financial commitments of implementing the proposed technology. It is imperative for the company to invest in research and development (R&D) in future to ensure it keeps pace with the rapidly changing technological advances. The move requires the slotting of R&D funding into the company’s budget. The move will allow the R&D IT department to develop its software tailored to meet its organizational requirements.

Hardware

Any type of technology encompasses hardware as the container of the technology. In IT, the physical components of computers and related equipment are the hardware and communication systems. Other IT hardware includes telephones, routers, servers and backups. The hardware installed by the company requires having specifications that will accommodate the proposed technology. The selection of the hardware is important, as it will determine the efficiency of the software. The hardware will be large enough to accommodate the increasing labor details and information in the long-term.

Software

These are the nontangible parts of information technology. The main characteristic of software is that they can be stored electronically. They are programs used to control computers and allied devices. Examples of software include operating systems, utilities, applications and programs. The company requires purchasing and installing programs that are compatible with TAAS. The Windows^© variety of offerings is appropriate for using with TAAS because they accommodate a wide array of applications.

Compatibility

The aspect is concerned with the capacity to share whichever kind of information across technology modules all over the enterprise. It makes data readily available to users without experiencing difficulties due to differences in the type of data or information. It facilitates the spanning of corporate boundaries, empowers the users and readily avails knowledge within the business.

Connectivity

The purchase and installation of hardware and software is only among the initial stages of having an IT infrastructure. Small enterprises may not require complex networks to meet the needs of the organization. However, large enterprises such as Shores and More Bicycles require an elaborate network that will increase the sharing of data and information internally (Local Area Network – LAN) with other plants (Wide Area Network – WAN), Metropolitan Area Networks (MAN), Storage Area Networks (SAN) and Content Networks (CNs including intranet, extranet the internet and the VPN).

Connectivity regards the capacity of an equipment module to link with other modules inside and outside the enterprise environment (Duncan, 2012). Connectivity will allow for the smooth and transparent businesses that are autonomous in terms of time and space. Besides, the connectivity makes the sharing of IT resources at the policy level.

Modularity

Modularity regards the capacity to effortlessly reconstitute the technological modules. These activities include adding, modifying or removing some components. Modularity facilitates the setting of the desired organizational processes for sharing and usability. These include the tailored programming and module-based software architecting. Additionally, it is a range that describes the level at which a system’s modules can be disconnected and rearranged.

The aspect is critical for businesses that desire to communicate internally with customers and other branches virtually. Upon training on the utilization of TAAS, the IT personnel will play a fundamental role in enhancing company productivity through the reconstitution of some elements to accommodate other components of the existing systems.

Data

Data refers to information that has been decoded into a system that is more suitable to transfer process or share. Data is typically presented in symbols where operations can be executed by a computer and transmitted in electrical signals. The data that will be collected by the proposed system will be essential in analyzing the company performance and identify areas that require improvements. The sharing of the data will facilitate the development of strategies by different departments in pursuit of organizational objectives.

Gap analysis of the current technology and future needs for the IT infrastructure

Currently available hardware

Shores and More Bicycles Company has the basic hardware that increases the organizational operations. These include computers, servers, landline telephones and switchboards. The hardware currently available conveniently caters for the needs of the company. However, some of the company’s branches experience shortage of the crucial hardware such as power backups and data backups. The servers available in some locations require an overhaul and upgrading to increase their efficiency.

The company requires purchasing modern hardware that will allow the effective installation of the TAAS. Most of the computers were meant for outdated programs considering their specifications. Computers with larger capacity will allow the company to maintain data for the increasing workforce.

Currently available software

Despite the company having several branches and plants in different states and countries, the only recognizable 3D software in Rome (Italy) is a standalone machine. Therefore, there is need for sharing the software on a platform that will allow other users to view the images directly and make changes if necessary. However, these changes should be reflected so that the research and design department can approve or ignore the proposed changes. The nature of the challenge requires that the company creates a portal to allow real-time communication between engineers in different regions.

Currently, the company has only one application that is accessible to all members. However, the accessibility of the system can only cater for the current company size. The software utilized by the company is decentralized for every department. The incorporation of the data is a challenge as individual departments require sending copies to the IT department for incorporation. In some circumstances, the personnel fail to integrate the reports resulting in the misleading reporting of the actual company performance status.

In addition to software that will facilitate employee data collection, analysis appraisals, the company require to install software that will facilitate easier sharing of information devoid of risk of interference. There should also be standard software across the company that will allow product developers to produce bicycle parts and apparel upon crosschecking from a main source.

Upgrading and reorganizing the IT infrastructure

The IT infrastructure aptitudes allow the numerous kinds of IT applications prerequisite to back the present and future organizational goals and facilitate the economical positioning of commercial advantages. The company should purchase modern computers with the following minimum specifications for users in different locations:

Hard disk: 1 Terabyte

Pentium 4 CPU: Above 3. GHz

RAM: Above 2 GB

However, the company should ensure that it acquires a main frame computer for each of its branches. The approach will ensure sufficient data storage space and efficiency. The main frame will function as the server and a backup. It will be easier to share data and information across the company (Byrd & Turner, 2011).

Specific technologies/vendors/products

The IT status of the company requires that the company adopt the ‘Time and Attendance System’ (TAAS). Considering the wide ranging organizational activities of the company, the ALTO PLUS is an appropriate system that will solve most of the problems that the company faces. The technology only requires the HR department to feed new employee’s information into a computer including a photo. The information is relayed to the ALTO PLUS.

When the employee reports to work, they swipe their cards on any terminal within the company. The system immediately sends the information to the respective departments, the local HR and the headquarters while the data is stored in a server. After the shift, the employee swipes the card again. The standard hours worked and the overtime hours are calculated immediately. At the end of the month, it calculates the salary for every employee. The data stored in the system can also be exported for use in 3^rd party systems.

Company’s need for system support

The company currently experiences multiple challenges that curtail its growth and expansion. The company requires an asset management system. The system will enable the accounts department to track the company assets globally. Additionally, the department will easily issue financial statements about liabilities and capital among other critical entries that reflect on the company performance. The proposed system caters for these concerns.

Provided the company has sufficient data storage space, all the company details can be entered into the system including starting capital, assets acquired and liabilities. The system generates financial statements when processing the payroll.

The human resource function responsible for the recruitment and selection of the workforce will require an integrated system that will automatically update new employees to all the relevant departments including the finance and IT departments. Such technology includes the TAAS system utilized by emerging and innovative companies. When an individual has not reported to work for two consecutive days or miss any three days in a week, the HR receives a notification through email.

The same is sent to the headquarters. The advantage of the system is that the company only requires one set of equipment for each plant. These systems are then linked through a server and all the data is collected at the headquarters thus ensuring that the company operations are standardized globally (Longbottom, 2014).

The plan will be possible once the IT department applications are upgraded from the current standalone applications. A portal will be developed where customers can place their orders online. Within the same platform, suppliers will have their section where they can communicate with the relevant departments. The move will facilitate the streamlining of the supply chain.

There is dire need for integrated systems considering the applications and services layer the company will have upon expansion. The application accessible by all members of the company will render the payroll system dysfunctional upon the increase of the company personnel which is imminent. The ALTO PLUS will place the company in a competitive position considering that the portal developed will integrate the successful online sales of the company products with the projected sales.

Emerging technology for later implementation into the proposed system

The ALTO PLUS is currently gaining popularity across many manufacturing industries. However, the idea that an employee can swipe the card on behalf of another has got developers thinking. There is a viable solution that future systems will include cameras that will identify the employee using rays. The employee will only require standing in front of the swiping machine with the eyes open and swipe the card. The machine will detect the individual holder of the card. When the information does not tally, the card number will be sent to the relevant department for action to be taken (Hinchcliffe, 2011).

Report for the management: Three year plan

Businesses globally are discovering that the capability to successfully control human resources is becoming a chief indicator of managerial and corporate growth. Organizations that stand out in using Information Technology human resource management systems to organize and manage workforce capital are making considerable benefits in the marketplace. However, those that disregard the importance of sophisticated HR technologies are dragging behind the competition.

The Human Resource Information System (HRIS) is a tool that caters for many areas of organizational management. These areas include data entry, data tracking, and data information needs of the Human Resources. Others are payroll, management, and accounting functions in organizations. Typically designed as a data base, thousands of organizations trade some form of HRIS. Each of these HRIS possesses different competences. It is hence imperative to pick the HRIS cautiously founded on the competences required by the organization. The type of HRIS selected determines the implementation period considering the relevant short-term and long-term benefits of the system.

Rollout schedule

The implementation of the proposed IT system is projected to begin in January 2015. The projection of the start date is due to consideration of the infrastructure that requires being put in place prior to the implementation of the actual system. The first six months will be consumed in upgrading the current computers. Modern servers and computers will be purchased and installed. Part of the IT personnel experienced in hardware configuration will be deployed to assist the supplier to ensure that they are conversant with the hardware once the supplier hands-over the project to the company.

Serviceable old computers will be upgraded and issued to departments that do not maintain high volumes of data. The overhauling of the company LAN will be done at this stage. The cables will be replaced to introduce the optic fiber cables. The configuration of the servers, routers and computers will be conducted simultaneously. The ALTO PLUS system will be installed. The software supports the use of a platform that accommodates Smartphones.

Consequently, it will allow executives of the company to communicate globally. The strategy to use the software will increase communication with suppliers, which will enhance the company’s supply chain. The system is crucial in ensuring that hearing-impaired suppliers and customers can access the products of the company.

The next six months will involve a pilot department to assess the effectiveness of the new system. In this case, TAAS will be utilized. TAAS will collect data and use the information to analyze the successful sales. The success of the pilot project will mean that the entire system can be rolled-out. During the second year, the system will be upgraded to include the digital camera version for optical identification of the employees.

The data collected will be analyzed using the TAAS system to reflect on the individual performance of the employees as well as the general performance of the company. A web portal will also be developed during this period. It will allow suppliers, customers and employees to interact freely.

During the third year, the entire system will be merged globally to streamline the supply chain. The efficiency of the network equipment will be observed over a period of two weeks during which bottlenecks will be fixed.

Justification for implementing the system

The selecting of human resource technology in leading businesses requires addressing an array of considerations. These include labor management functions such as numerous must-have features. Some of these features include Management Tools, Employee Tracking and Compliance & Policy Tracking. Principal human resource solutions progress organizational output through provision of influential management aspects and elements to human resource managers and leaders.

Typically, leaders ought to possess the vision for performing appraisal information, guidance and certifications. There is other vital information that requires handling by the company for effective management of the human capital. The system must also provide the managers the capacity to execute point-control budgeting, and institutional processes.

Hiring at the company is decentralized; there is no preset, corporate hiring figure and the operating groups, which form the company, are responsible for their own strategic decisions. In spite of being linked by the common denominator of ‘electricity’, their businesses are very diverse and range from bicycles and apparel.

Therefore, even a job vacancy labeled ‘mechanical engineer for sales’ can mean something as diverse as selling apparel to fashionable customers in Brazil or desalination plants to experts at utilities in the Middle East. As a well-known employer of choice for engineers, the company receives numerous unsolicited job applications via its Internet site where open positions will be listed. In addition, it is possible to draw on the talent pool of thousands of highly qualified students that serve their internships at the company every year.

When special skills or professional experience are required, the company will use the standard approach (advertisements, career fairs and direct contacts). The proposed technology will allow those in the HR departments to have good contacts with the universities in the respective countries and know which graduate profiles best serve their requirements.

Human resource needs for the recommended IT system

Currently, Shores and More Bicycles lack an appraisal system critical in assessing the performance of individual employees and consequently the company. The HR department requires having the updated attendance information for every employee to assess their performance. The proposed system will further ensure that all the company information is readily available.

The headquarters can easily assess the performance of individual plant’s viability and determining the efficiency of the specific plant management. The company requires hiring more IT experts to assist the existing pool of experts. The IT department will appoint among them a systems administrator who will be answerable to the CEO as opposed to the current situation where blames are shifted among the IT assistants when something goes wrong.

The approval of the HR manager will be required prior to presenting the administrator to the management. If none of the IT personnel meets the threshold of an administrator, the HR function will exercise due diligence in recruiting externally. The Hr department will, therefore play a central role in ensuring that the appropriate personnel is available for the success of the proposed technological adjustment.

How the IT system will help support the company’s globalization

The ALTO PLUS has the potential to expose the weaknesses of individual plant management in a timely manner. TAAS has sufficient specifications to locate the position of the end user through a GPRS locater. The ALTO PLUS when configured through the TAAS system has the potential to identify employees, managers and suppliers through the identification of ZIP codes and IP addresses.

The headquarters can hence compare the performance in different global locations and determine the places where it should establish its plants as well as the mobilization of its workforce. The portal will enable customers in different markets to determine the nearest stores where they can purchase the products. The company will be able to keep in touch with the suppliers globally. Additionally, the company will be able to track the production rates of the suppliers in real-time.

The move will help avoid delivery delays and consequent loss of business. The company will further stand the opportunity to accurately track the movement of goods ordered by customers to ensure timely delivery. This will assist in developing an efficient supply chain. The suppliers will have a schedule on their Smartphones that will prompt when delivery is due. Orders placed by different customers will be available on a common platform that allows communication with different suppliers to avoid issues of delayed orders.

For successful globalization of the company’s business, it is critical for ALTO PLUS and TAAS to be included. The two systems will be essential in ensuring that the headquarters, the employees, the suppliers and the shareholders are engaged when making essential decisions. Moreover, it is worth noting that the company management shall make the final decision.

How a specific emerging technology will facilitate growth

The availability of the internet will be augmented by the availability of smartphones. The company customers will be able to access the company through these gadgets via the internet. This has the potential to increase the customer base considering that the dedicated personnel will be responding to individual enquiries by customers.

Customers will be able to order products through their smartphones. In addition, they will be able to make payments online. The data collected from the customers will assist the company in identifying potential markets where outlets can be opened to exploit emerging and existing markets.

Smartphones enable users to receive news at the touch of a button. In recent years, configurations are available to allow users to install applications (Apps) in various gadgets. These include various applications that allow customers to order the variety of bicycle products and apparel. Most Smartphone companies are developing phones that include Artificial Intelligence (AI).

Shore and More Bicycles Company require consulting with mobile phone providers so that the Smartphones the company will be using are configured to allow a shared platform. The strategy will allow the management, the suppliers, the customers and the shareholders to engage in a meaningful way. The Smartphones will allow suppliers to store data in the form of reminders that will allow alert them when necessary. In addition, employees will interact with suppliers and customers even when in transit.

The communication will be facilitated by the conversion of languages that enables individuals from diverse language backgrounds to communicate easily. The management will benefit through the wide range of applications such as search and arithmetical optimization.

Conclusion

Technology plays a central role considering that it is a stage that is compounded by chances and risks. Conversely, organizational expansion often brings with it the conforming increase in financial prosperities for the shareholders and workers alike. Organizational growth is viewed as a confirmation of the founder’s primary commercial start-up idea and the ensuing determinations to make the vision a reality. The growth comes with many corporate commitments that require the organization to keep pace with technology.

It is hence imperative for expanding businesses to establish technological systems to help in monitoring cash flow, increase innovation, track inventories, manage finances, and trace human capital information. Introducing new and emerging technologies require organizations to invest in more advanced information technology and communication systems to provide sufficient backing to the variety of organizational operations. The human resource function responsible for the recruitment and selection of the workforce will require an integrated system that will automatically update new employees to all the relevant departments including the finance and IT departments.

References

Broadbent, M., & Weill, P. (2009). Management by maxim: How business and IT managers can create IT infrastructures. Sloan Management Review, 38(3), 77-92.

Byrd, A., & Turner, D. (2011). An exploratory analysis of the value of the skills of IT personnel: Their relationship to IS infrastructure and competitive advantage. Decision Sciences, 32(1), 21-54.

Duncan, B. (2012). Capturing flexibility of information technology infrastructure: A study of resource characteristics and their measure. Journal of Management Information Systems, 12(2), 37‑57.

Hinchcliffe, D. (2011).The “big five” IT trends of the next half decade: Mobile, social, cloud, consumerization, and big data. Web.

Longbottom, C. (2014). A data center infrastructure strategy fit to support business growth. Web.

Introduction

A bicycle is a convenient, environmentally friendly, and healthy transport. More and more European and American cities are building bike paths and purchasing municipal bicycles to introduce shared bicycles. The most outstanding example is Amsterdam, where movement around the city center takes place exclusively by bicycle. As a result, locals save on public transport and benefit from quick relocation opportunities. This paper aims to discuss the relevance of implementing the shared bicycles project on the college grounds.

Brief Service Description

The college occupies a relatively large area, and students have to cover considerable distances on foot to get from one classroom to another. Therefore, the launch of the shared bicycles project will be in high demand among students, as it will help them save time during breaks between classes and keep a good shape. Moreover, cycling is fun and can help clear the mind after a dose of challenging academic information.

Concept Statement

The concept will be implemented by installing bicycle parking at each educational building and purchasing enough bicycles for shared use by college students. To prevent bikes from being stolen, several cameras will need to be installed around the college grounds’ perimeter and periodically checked the number of bicycles. They can also be painted using college symbols, which will psychologically become an obstacle to theft. A deposit or payment system could also be introduced – for example, 1 or 2 pounds to guarantee that the bike will be parked in the proper place.

Target Market and Service Positioning

The primary consumers of the service will be college students, teachers, and visitors to the campus. Since the service is aimed at the well-being of the entire community, high payment for the service should not be involved. However, since the purchase will be made at the college’s expense – that is, at the cost of all students, and only those who wish will use the service, payment systems can be installed on bicycles. Through it, customers will pay for trips with a smartphone using a QR code.

The service price can be symbolic – for example, 10 or 25 cents; however, since bicycles will be used by many people every day, the costs of purchasing bikes and installing parking blocks will be reimbursed during the first semester. Before implementing the shared bicycles project, it will be necessary to conduct an anonymous vote among students. In it, they will express their desire or unwillingness to use the service. Students will also submit their proposals on the project website – such a website will be easy to make using WordPress.

Marketing Objectives

Marketing objectives are an essential part of strategic planning as they provide a clear perspective for a business or initiative. According to scientists, goals should be SMART – specific, measurable, accurate, realistic, and timely or targeted to motivate all project participants (Richardson, 2019). ‘Accurate’ means the goals should be aspirational and achievable; ‘realistic’ implies that the chosen objective will deliver the required changes. ‘Timely’ means that the team needs to have enough time and resources to achieve the goal, whereas ‘targeted’ means that the objectives target the appropriate segment. Besides, when setting goals, the SWOT or TOWS scale can be used, starting with SO and ST.

Moreover, when setting goals, a brand awareness and distribution strategy should be developed, and tactics that will ensure the first trial and repeat purchase. Besides, a competitive strategy for market positioning will have to be created. According to scientists, the company’s competitive positioning is a statement of market targets or where the company will compete and differential advantage or how the company will compete (Hooley et al., 2020). In the presented case, the shared bicycles’ business initiative will be a monopolist in the target market. Therefore, the competitive advantage was embedded in the concept of effort. Social media will be used to raise brand awareness and as a distribution strategy, since this approach has proven effective (Cheung et al., 2020). Besides, an advertising campaign will be developed in the form of bright posters and flyers for a student rock band’s concert to inspire students, teachers, and guests of the college for the first trial.

Simultaneously, the low price and convenience of the service are guaranteed to ensure repeat purchases. To be more specific, marketing objectives will include developing brand awareness and distribution through the one-month social media campaign. The first trial will have to be achieved among 50% of students during this period, and after the rock concert, this figure will presumably increase up to 75%. Moreover, the repeat purchase of the same amount is awaited among consumers of the shared bicycles service.

Financial Objectives

Financial objectives will include achieving a sales level high enough to cover the project implementation costs. The contribution of material and intangible resources implies material costs for purchasing bicycles and parking blocks, payment systems, printing posters, and flyers (Kamasak, 2017). Intangible costs are creating a website for the initiative, labor, and time spent on developing a campaign on social media and student radio, designing posters and flyers, and organizing a student rock band concert.

According to scholars, getting the highest market share is a common goal for most companies. Moreover, market share is defined as the market’s proportion supplied by the company’s product or service (Engle et al., 2016). The market share will be 100% since we are monopolists, but it will not provide us with high sales, since they will depend on the level of students’ interest. Therefore, our goal is to maximize sales while also considering the low elasticity of the market. It means that the initiative’s success will depend solely on our efforts with minimal external influence (Edeling & Himme, 2018). It is noteworthy that lower elasticity is characteristic for markets with a large number of participants and service markets compared to the product markets.

Societal Objectives

Achieving societal objectives is at the heart of the concept of our business initiative. According to scholars, societal goals are usually linked to social problems to be addressed (Dhiab et al., 2020). In the presented scenario, the leading social problem is that students do not always have enough free time to rest during the breaks as they have to cover long distances between buildings on foot. In the next academic year, the initiative will be especially attractive for the freshmen, as they will have to spend time remembering the location of buildings and auditoriums. In this regard, some of the posters will include a campus plan, and maps will be printed on advertisement flyers. It will attract new users of the service and will help to achieve social objectives.

Another essential societal aim is to improve the general health of students, teachers, and college guests. When cycling, the body absorbs more oxygen as blood flows faster through the veins. Accordingly, more oxygen enters the brain, which allows it to work more efficiently, creating more new neural connections. Exercises also reduce blood cortisol levels, whereas the increased cortisol leads to irritability, stress, anger, and panic attacks. Moreover, both regular and one-time activities cause the release of endorphins responsible for a stable state of the psyche and good mood, forming in a person the traits characteristic of optimistic people.

Spending time outdoors and exposure to sunlight have the same effect. Besides, sunlight increases melanin production, without which a person becomes indifferent, tired, apathetic, and energyless. The emergence of the shared bicycles’ service will attract many students who will ride bikes for their pleasure. Therefore, students will reduce the time they spend near the computer and will communicate more, which, in turn, will have a positive effect on their mental health.

Marketing Mix

As part of the development of a marketing strategy, it is necessary to determine the marketing mix components. According to scientists, “marketing mix is the combination of all of the factors at the command of a marketing manager to satisfy the target market” (Proctor, 2020). The marketing mix includes the 4P model, which has later been expanded to the 7P model. The new model includes physical evidence, people, and process indicators in addition to the initial product, price, place, and promotion indicators.

It is noteworthy that when starting businesses that provide services, scientists propose relying on the 7C model. This model implies the customer-oriented approach (Meral, 2019). Therefore, it will be most relevant for the project of the shared bicycles. According to scientists, the product should reflect customer needs and wants; price should be seen as a cost to the customer, and the place should be related to the customer’s convenience (Meral, 2019). Promotion can occur through communication, people should be cared for, processes must be coordinated and complete, and the physical evidence of a business should be expressed in comfort and cleanliness.

To be more precise, the product – the shared bicycles service will be available to the public for a small fee and will have the brand names ‘Rocket Bicycles’ and ‘Butterfly Bicycles.’ The artists who specialize in graffiti will paint the bicycles and thus increase their attractiveness to students. Each bike will have a ‘rocket’ or ‘butterfly’ logo so that potential consumers can choose the bike they like best.

The bikes will be of two types – with and without frames and two sizes – medium and large. Besides, the bells will be attached to reduce dangerous situations. This diversification will make bicycles more comfortable to use and attract more customers. The design will be developed individually, taking into account the interests of all students. For example, pictures may include sports games, names of musical groups, names of cities and countries, items used in various professions. Therefore, a daily choice will turn into a game, since every bike will be unique.

The price per trip, as mentioned above, will be extremely low to increase sales. It is reasonable since the price should be considered in terms of how acceptable the customer’s costs will be. Within the framework of this concept, the rate can be increased if a financial need arises. It will also be possible to introduce a bicycle rental service for a day – for trips within the city limits, and such a rental can cost 1 or 2 pounds. Since the student’s information will be reflected when paying with a credit card, the likelihood that someone will steal, lose, or break a bike is extremely low. It is because every student will understand that they will have to pay a fine in such a case. Given that the service is a monopolist in a small market for college students, the price could not be compared with competitors’ prices. Therefore, the decisions will be made, relying on fairness and financial calculations.

The location should be convenient for the customers, and the bicycle parking blocks will be located near the entrances to the college buildings and college territory. Places of selling a product or service are usually understood as channels of distribution. Therefore, bicycle parking blocks will act as channels of distribution. However, the service does not provide for the existence of target retailers or distributors, since this would require high additional costs. Besides, there is no need for distributors’ services since the service will be provided on a self-service basis.

Further, the promotion will be carried out through communication with customers. In addition to an advertising campaign to attract first customers and provide trial and repeat purchases, advertising campaigns will be launched from time to time to support the brand. Therefore, the first ad campaign will be based on the dissemination of brand awareness through social media and posters that will be spread within the college campus. The flyers with an invitation to a student rock group concert will also be distributed to support the initiative. In two or three months a repeat concert will be held to consolidate the success and attract new customers. Therefore, to successfully promote our service on the market, up to five events during the year will have to be organized to achieve full brand awareness and customer loyalty.

The factor of people in the shared bicycles’ initiative will be taken into account through the caring attitude, as the scientist’s advice. In particular, since our effort aims to solve social problems and achieve societal objectives, its concept is based on a caring attitude. The caring attitude will also be expressed in the advertising campaign framework through the distribution of the college maps, where classrooms and buildings will be indicated. As cycling improves health, flyers will also be made with infographics on the benefits of sports. The comfort and cleanliness of the shared bicycles will express the physical evidence of the service provided. Therefore, once or twice a month, a particular paid service company will repair, wash, and clean bicycles. Finally, all business processes that the service includes will be coordinated and complete. For ensuring this, detailed plans will be developed for each of the stages of the service implementation.

Sales Forecast and Financial Evaluation

Before starting to implement the project, it is necessary to conduct its financial evaluation. The financial assessment usually includes a sales forecast for one year and five years and the rationale that describes how the sales forecast was made. The next step in financial evaluation is to determine service costing, marketing budget, net contribution, and rationale of how these all were calculated. In general, to forecast sales, there is a need for information on sales in previous periods.

In the absence of such information, it will be possible to simulate it, taking into account the expected demand or start making a forecast after gaining real accounting data for two quarters. The sales forecast formula is as follows: Sales forecasted = trend + average seasonality (Stambolinska, 2017). In this case, the ‘trend’ means “a gradual change in sales, which moves in a certain direction from quarter to quarter and can be represented by a line or curve on the graph” (Stambolinska, 2017, para. 5). Simultaneously, ‘seasonality’ refers to “a periodic, usually regular and predictable pattern of levels of business activity in which most or all sales occur in a given quarter” (Stambolinska, 2017, para. 5). Besides, ‘average seasonality’ means the average value of seasonality for the same quarter in different years.

If there are indicators for the previous two quarters, then the calculations will be based on them. Anyway, a sales forecast cannot accurately predict the future (Berry, n.d.). Instead, forecasting is about “understanding the driving forces of sales and interdependencies to connect the dots by looking at the plan and actuals each month and easily make course adjustments” (Berry, n.d., para.2). Therefore, the next step of financial evaluation will be to determine service costing, marketing budget, and net contribution.

Service costing will reflect the cost of maintaining the business. The case presented, will include the services of a company providing maintenance. The service cost unit will have to be determined to calculate the service cost. It will be named bicycle/day and express the cost of servicing one bicycle per day. Service costing includes fixed costs or standing charges and variable costs or running expenses.

The calculation formula is as follows: Cost per service unit = Total costs for the period / Number of service units in the period. The service cost will not include the parking price, as this is a project for college students. Still, if a similar project were carried out in different conditions, parking costs would be included in service costing. Besides, service costing here does not include the wages of retailers or distributors. However, if such workers were hired, their salaries would be reflected in the service costing calculation.

The marketing budget is usually calculated for a year and includes the costs for organizing events aimed to achieve the marketing objectives. Most of the marketing activities will be done in-house – distributing leaflets, designing posters, painting bicycles, performing a rock band concert, and maintaining social media webpages. Therefore, marketing costs will be reduced to the costs of printing posters and flyers and purchasing paint for decorating bicycles. The budget calculation can be done using a template and a simple formula that assumes the addition of all costs associated with marketing.

Therefore, the net contribution or the amount remaining after all the necessary deductions will be the estimated amount of profit from the shared bicycles project. If this figure is positive, the first step will be to pay artists who will paint bicycles, designers who will make posters, and the rock band who will play five concerts. If, after deducting these costs, the amount is again positive, it can be spent on charity, the university’s needs, or in support of other social or business initiatives.

Time Plan

A time plan is usually drawn up to control the implementation of the project. The prelaunch period will take two months; the first month will be spent on preparing detailed plans for implementing the above stages. The preparatory work will take another month – the purchase of bicycles, installing parking blocks, design development, printing posters, painting bicycles, preparing a concert of a rock band, and organizing cooperation with a maintenance company. Further, during the first year, financial records of sales and costs will be kept. Based on these data, in the future, it will be possible to make a real sales forecast, to adjust the price for the service and current costs.

Monitoring and Control

Several tools can be applied to monitor and control the conduct of business. The most common is a benchmarking method, determining the most critical aspects of running a business – for example, sales level, customer satisfaction, improving student health, and giving marks on these indicators. Another monitoring tool is determining critical success factors for the subsequent development of an integrated approach to consolidate success. However, it will be possible to apply monitoring tools only based on the existing business and assess the processes taking place in it.

Business control can include an annual plan, profitability control, production control, and strategic control. A yearly plan is usually drawn up to create a structure and direction for the business’s further development. At the same time, profitability control implies the need to track sales, profits, and expenses and reflects the profit-earning potential of a product or service. Production control is monitoring the processes of providing the service of production processes. Further, to handle strategic control, organizations usually draw up strategic plans and try to adhere to them. A distinctive feature of strategic control is the need to deal with uncertainty and ambiguity at various stages of the control process. Finally, there is a contingency, which describes how the organization will act in particular circumstances that threaten the business or if the implementation of the original plan becomes impossible. In the case presented, such unforeseen circumstances could be the closure of a college due to a new surge of COVID-19, or problems with bike maintenance.

References

Berry, T. (n.d.). How to forecast sales. Web.

Cheung, M. L., Pires, G., & Rosenberger, P. J. (2020). Exploring synergetic effects of social-media communication and distribution strategy on consumer-based brand equity. Asian Journal of Business Research, 10(1), 126-149.

Dhiab, H., Labarthe, P., & Laurent, C. (2020). How the performance rationales of organisations providing farm advice explain persistent difficulties in addressing societal goals in agriculture. Food Policy, 10(19), 1-14.

Edeling, A., & Himme, A. (2018). When does market share matter? New empirical generalizations from a meta-analysis of the market share–performance relationship. Journal of Marketing, 82(3), 1-24.

Engle, C. R., Quagrainie, K. K., & Dey, M. M. (2016). Seafood and aquaculture marketing handbook. John Wiley & Sons.

Hooley, G. J., Piercy, N., & Nicoulaud, B. (2020). Marketing strategy and competitive positioning. Pearson Education.

Kamasak, R. (2017). The contribution of tangible and intangible resources, and capabilities to a firm’s profitability and market performance. European Journal of Management and Business Economics, 6(5), 252-275.

Meral, Y. (Ed.). (2019). Tools and techniques for implementing international e-trading tactics for competitive advantage. IGI Global.

Proctor, T. (2020). Absolute essentials of strategic marketing: a research overview. Routledge.

Richardson, N. (2019). Sustainable Marketing Planning. Routledge.

Stambolinska, V. (2017). How to forecast your sales through simple calculations. Web.

Sprocket Bicycle is a bicycle ride-sharing company that provides an easy and secure way for vehicle owners to earn money by renting out their bikes to people. When they are not using the bicycle, they can offer it to willing people for a time, who can then use it to ride to a different point and back. The application benefits both bike owners and renters, with the former receiving money from their property and the latter being able to access convenient and inexpensive transportation.

Moreover, since people lend out their personal bikes, Sprocket Bicycle circumvents the quality and maintenance issues that most centralized bike-sharing companies have. As such, there is reason to believe that the company may be able to find a niche of considerable size or create a new market the same way its inspirations have. The purpose of this report is to provide a financial analysis of the company’s needs and potential for financial success.

The company’s costs will be relatively low, given that it will not purchase or maintain bikes but rather let its users do so. Moreover, the expense of purchasing the electronic lock for the bike can be shifted to the bike owner, who will buy the device from the company and compensate it for the purchasing and shipping costs. As a result, a large portion of the expenses can be mitigated, though substantial categories remain. The most significant will be related to the company’s business model, which involves taking a fee out of each payment the renter makes to the owner.

Each transaction is associated with a credit card processing fee, which will be significant compared to the portion the company takes. Another significant cost category is the price of developing and maintaining the software and hardware needed for the app’s operations. Finally, the costs that exist for every business, such as administrative, marketing, and operational expenses, as well as insurance payouts to people whose bicycles are ruined or who are issued a faulty vehicle have to be taken into consideration.

In terms of growth, it can be assumed that the rates will be similar to those for Uber or similar ride-sharing applications. Lyft, a competitor in a field where Uber dominates, was able to triple its traffic between 2015 and 2016 (Winkelhake 272). With that said, the use case for Sprocket Bicycle is considerably more limited than that for the services above, as the bike has to be returned to its initial location. As such, it misses out on a large customer base, and its growth is unlikely to be as fast.

With that said, this report will assume an optimistic projection of 50% annual growth on average. The business has the potential to grow significantly faster, but there are too many random and unpredictable factors involved that make assuming success an unproductive endeavor. Once it has a foothold in the market, the company should be able to grow exponentially before reaching saturation sometime later. It is reasonable to assume that, given the size of the target market, this slowing in growth will happen past the five-year period that is being considered.

The company’s starting capital is determined by the scale at which it intends to start operating. Per Harroch and Smith (7-3), capital should be considered in terms of the specific stages at which different resources will be required. First, a proof of concept has to be established, which can be accomplished with $10,000. Then, the development of the app and the associated hardware can begin, which amounts to a total of $250,000.

With these steps done, an initial supply of locks and marketing can begin, incurring a further $100,000 cost for a total of $360,000 over 6 months to establish the business. With that said, some safety margin will also likely be necessary. Overall, at the business’s opening time, a starting capital of $450,000 may be warranted to ensure that it can operate throughout the first year and possibly secure additional investment for the future.

Overall, the 5-year projection in Table 1 shows that Sprocket Bicycle will struggle to break even within the first five years, instead incurring large expenses continuously. An extension of this model for later years suggests that if the company can maintain a 50% growth rate, and if all of its costs also stagnate (which is unlikely), it will be able to break even after 15 years. This finding is in line with Sprocket Bicycle’s inspiration, Uber, which has also historically struggled with profitability and has been unable to achieve it (Albinsson and Perera xvi).

Table 1: Five-Year P&L Projection.

Sprocket Bicycle will be among the new generation of companies, such as Amazon, that provide ubiquitous and highly convenient services without charging sufficiently high prices to become profitable, as they would drive users away. The long-term feasibility of this approach is unclear, but it appears to have been effective for many businesses so far.

As is the case with Uber and similar companies, Sprocket Bicycle is not necessarily destined to fail because of its lack of profitability. Uber finances its operations despite the losses by attracting investors, who increase the company’s value and provide it with the cash it needs to continue operating. With that said, the potential use case of Sprocket Bicycle will be considerably less large-scale than Uber’s due to the issue of it only permitting round trips and not transport to any point.

As such, its potential for growth is also substantially smaller, especially given that bike rental stations are considerably less affected by this drawback. Overall, the venture is highly risky and not necessarily attractive, and it is unlikely to draw the attention of large capital the same way Uber did. With that said, Sprocket Bicycles may be able to secure funds from less risk-averse investors and create a niche for itself in which it will grow steadily.

References

Albinsson, Pia A., and B. Yasanthi Perera. Uber. ABC-CLIO, 2020.

Harroch, Richard D., and Gregory C. Smith. Start-Up & Emerging Companies: Planning, Financing & Operating the Successful Business. Law Journal Press, 2020.

Winkelhake, Uwe. The Digital Transformation of the Automotive Industry: Catalysts, Roadmap, Practice. Springer International Publishing, 2017.

After the death of Mao Zedong, the new president of the People’s Republic of China carried out a number of reforms that helped raise living standards and radically change the Chinese economy. The essence of China’s new economic policy was the desire to reduce the control of the central government over economic aspects and facilitate the mechanisms of the natural market. This decision led, among other things, to the emergence of a large number of companies that have a price advantage in the production of bicycles due to the availability of cheap labour and relatively low costs (Mao et al. 456). That is why bike production moved to China. China has a competitive edge, not only in assembling bikes, but also in producing bike parts. This is due to the fact that the raw materials from which they are produced are extracted directly in the country, and most of the raw materials are immediately sent to the technological production of China.

Detroit Bikes cannot produce a competitive product in the United States. This is due to the fact that bicycles are custom and represent a premium segment product. Since the price of Detroit Bikes is quite high, most people prefer the Chinese alternative. Minimal production costs in China make it possible to make bicycles produced there much cheaper than Detroit Bikes products. However, the globalization of production and markets can benefit Bikes Lakes in its endeavour. This economic factor will allow Detroit Bikes to successfully carry out production activities in China. It is much more profitable to organize production in China than in the USA (Mao et al. 456). Thus, bicycles produced in the Chinese branch of the company will be cheaper and more profitable for sale.

Work Cited

Mao, Guozhu, et al. “How Can Bicycle-Sharing Have a Sustainable Future? A Research Based on Life Cycle Assessment.” Journal of Cleaner Production, vol. 282, no. 1, 2021, pp. 1-12.

An effective way to delve into a particular business area is to talk to representatives of large companies. An essential part of this process is asking questions that allow drawing the necessary conclusions about the companies’ operations. A few of the best questions to consider are:

1. How do companies present to their target customer? The fact is that creating a bicycle involves design invention, pricing, and raw material selection. For the industry to develop in-demand designs, managers need to anticipate and double down on the needs of potential customers (Mari, 2020). Consequently, such a question would reveal a company’s logic in creating a product.
2. How are the priorities between bike speed and safety? It is essential to understand that the bicycle is a means to get around more quickly and a form of entertainment, for example, for children or adults on a walk (Mari, 2020). Such a question will reveal the weaknesses and strengths of the company’s production.
3. For which country or region are the bicycles mainly produced? The fact is that states have a different cultures of leisure. Bikes, for example, are popular in the Netherlands, America, and Russia (Marqués, 2020). In Austria or Portugal, on the contrary, such transport is not in demand (Marqués, 2020). When analytics discover the answer to this question, they can understand what climatic conditions the industry is focusing on based on the geography of the countries.
4. What materials are used to make bicycles? Today’s world has many counterparts, such as steel, hard plastic, and carbon fiber. Based on the company’s answer, analytics can compare the cost of production and the product’s final price, thereby revealing the industry’s profit.
5. Does the company produce all-purpose bicycles or focus on each type of exploitation separately? Consumers prefer to use bikes for various purposes, from mountain biking to professional sports. By answering this question, analytics can see how well a company uses all possible business areas and whether it can increase its influence.
6. How environmentally friendly is the production facility? The critical point is that several bicycle consumers are eco-friendly (Marqués, 2020). Moreover, in today’s world, the harmfulness of production is an essential criterion for maintaining consumer loyalty (Marqués, 2020). By answering this question, the company can indirectly say to what extent it complies with one of the most critical areas of production optimization.

References

Mari, C. (2020). A business history of the bicycle industry. Shaping marketing practices. Springer International Publishing.

Marqués, R. (2020). An analysis of the role of cycling in sustainable urban mobility. The importance of the bicycle. Cambridge Scholars Publisher.

Four Corporate Strategic Thrusts and Decisions

The company’s or Just About You Bicycles’ corporate strategic thrusts are primarily focused on delivering a product with the highest possible value to the customer in order to become a major leader in the overall market. The emphasis is put on the value-driven markets, where the thrusts revolve around ensuring that the latter goal is achieved. The selected corporate strategic thrusts are the focus on the long-term perspective, willingness to take risks, market leadership, and thus, top competitive forces include superior customer value, high personal touch, high-volume and low-cost manufacturing, and prudent cash management. The first financial decision derived from these thrusts is focused on providing customers with the highest value in the marker of carbon fiber bicycles. Such a value can be delivered by selling the product at a reasonable price and with outstanding quality. Therefore, the company aims to sell its products with minimal profit margins with profits sustainable for maintaining and gradually growing JAYB. In other words, the key emphasis is put on value creation rather than pricing. For example, JAYB MAX 2.0’s retail price is $1025, and for JAYB SPEEDSTER1 and JAYB SPORT, the prices are $1500 and $675, respectively. The goal is to capture the largest market share of the general customer base by expanding the latter and establishing the company as a leader.

The second financial decision is focused on compensations for workers, where both sales force and production workers are paid around $25000 per year with expanded coverage and two weeks of vacation. It is important to note that although the sales force is paid more by a small margin, the overall ratio is in favor of manufacturing workers rather than the sales force (Chen et al., 2016). In addition, supervisor’s compensation, despite their position, is equivalent to both workers and sales force professionals. Therefore, it is evident that in order to provide the highest possible value, the decisions are based on employee empowerment focus on the quality of products, which can only be delivered by attracting the most skilled production workers as well as sales managers.

The first non-financial decision is superior manufacturing, which is of paramount importance in regards to strategic thrusts. It is important to point out that the majority of value is found in the product itself, which why manufacturing is critical for the company’s approach. In other words, the overall production process needs to both efficient and reliable in order to avoid faulty products as well as be able to adhere to the company’s long-term perspective. For example, reliable production means that fiber bicycles will not be of low quality, and thus, customer perceived value will be high, which will be the major catalyzer for the company’s goal of becoming a market leader. The second non-financial decision is centered around embracing conscious capitalism, where all stakeholders’ interests and perspectives are factored in rather than a sole emphasis on shareholders and management. For example, since the company seeks to be a market leader in the long term, it is critical to operating in an ethical manner, where profits are not the only goal.

Changing Decisions

On the basis of previous decisions made in the last three quarters, the majority of them were focused on employee empowerment and value creation through superior manufacturing. However, the company needs to change by allocating some of its focus on both consumer safety as well as worker safety. Firstly, it is important to note that the regular or standard carbon fiber material is not a reliable and durable material, which is prone to cracks and breaks. In other words, such a material can be a major source of danger for cyclists, especially for those who ride on mountains and high risk areas. Therefore, the company’s decision needs to switch to more expensive and durable enriched carbon fiber. Since the company primarily focuses on value generation rather than pricing, the expensiveness of new alternative carbon fiber is not an obstacle. However, the company is highly concerned with the safety of customers, which is why it is of paramount importance to integrate changes in regards to acquiring enriched carbon fiber as soon as possible. Therefore, JAYB should have prioritized the purchase of enriched carbon fiber bicycles earlier in order to avoid manufacturing high risk products.

Secondly, another change needs to be focused on employee safety and community well-being. JAYB should have prioritized protecting workers and communities from toxic substances as well as provided compensation. In other words, such an approach benefits in a multitude of ways, where the company attracts the most skilled workforce, which ensures that it establishes superior manufacturing. It also helps to promote sustainability and environmental plausibility, which are critical in the cycling industry. It is evident that people interested in bicycles are more likely to be aware of their environmental impact, which is why companies manufacturing them need to be extra cautious of their ecological influence (Karanikola et al., 2019). Protecting workers and communities from toxic byproducts of the production process needs to become a top priority for the company.

Decisions with Positive Effects

The first positive decision is centered around the fact that the company wants to embrace conscious capitalism by factoring in the interests of all parties involved in the business. In other words, JAYB does not solely emphasize the importance of executives and shareholders because customers, workers, and communities are of paramount importance as well. The decision benefitted greatly since such an approach will keep JAYB remain competitive with its main industry rivals, such as Thunder Bike and BIK3D. Without this explicit and highly prioritized decision, the company would worsen its chances of becoming an industry leader because it would be challenging to keep up with the given shift within the industry. Both consumers and companies are becoming more and more aware of the safety implications of their products, which is why embracing conscious capitalism benefitted greatly in avoiding overlooking these areas. Although JAYB still needs to switch its carbon fiber material and increase worker safety measures, the decision greatly reduced the amount of change, which would be required for adherence to the current shifts.

The second positive change is focused on economies of scale or achieving value generation for customers by producing more products at lower costs. The current trends indicate the market of carbon fiber bicycles is booming with increases in demand, revenues, production, and distribution. By focusing on both volume and quality by undermining immediate profits, the company will greatly enhance its chances of becoming an industry leader by being able to deliver high-quality products and meeting the market demands. In other words, the decision was a correct one because it was also risky. If the market had experienced a decrease in demand, then the company’s focus on volume alongside quality would have resulted in failure since it would have created substantial losses.

Valuation

The valuation of the company needs to be provided on the basis of all financial data as well as analysis. The method will primarily focus on the net asset valuation method, which focuses on the formula: Assets = liabilities + owner’s (stockholders’) equity. The approach will mainly utilize the balance sheet, which can be accessed in Table 1. Although the calculations will be primarily based on the balance sheet, the income statement can be accessed in Table 2 and cash flow in Table 4. In order to calculate the total asset value, debt needs to be subtracted from the total asset value, which is equal to $2 983 884 – 0 = 2 983 884. In order to find the total owner’s equity, retained earnings need to be subtracted from common stock equity, which is equivalent to $5 000 000 – 2 016 116 = 2 983 884. Therefore, the valuation based on assets indicates that the company’s worth is equal to $2 983 884. The original stock value issue is equal to $5 000 000 – 2 983 884 = $2 016 116, which is loss to investors.

Therefore, considering that there are a total of 50 000 outstanding shares of stock, the number $2 016 116 is divided by 50 000, which is equal to $40.32 loss per share, and the current value is equivalent to $2 983 884 / 50 000 = $59.68 per share.

Table 1.

ROI

In order to calculate the projected financial return on investment or ROI, it is important to Subtract the initial value of investment from the final value of the investment, and divide the calculated value by the initial value of the investment, which is multiplied by 100 for percentage. In the given case, ROI is equal to (($2 983 884 – 5 000 000) / (5 000 000)) * 100 = ((-$2 016 116) / (5 000 000)) * 100 = -40.32%. Therefore, the value shows that there is no gain from the investment but rather a loss. In other words, it would have a negative effect on investors since the ROI is negative. However, such a projection is expected since the company plans to focus on delaying immediate profits in accordance with the long-term perspective, which focuses on creating value for customers, establishing a superior manufacturing process, and increasing volume as well as expanding its current market share.

Table 2.

Business Analysis

Ratios

It is important to note the fact that the liquidity ratio is unavailable since there are no current liabilities, as can be seen in Table 3 as well as from the balance sheet. In the case of the activity ratio for JAYB, the fixed assets turnover is equal to 2.53, and the total asset turnover is equal to 1.08. Both of these values are below average for the industry ratios, which are equal to 2.76 and 1.20 for fixed and total assets turnover, respectively. The identified ratio is the total turnover ratio of 1.08, which is indicative of how efficiently the company is able to manage its working capital, which includes payables, receivables, cash, inventories, and other forms of assets. Therefore, the activity ratio is lower than the industry value, which means that JAYB is poorly managing its working capital by being inefficient with it. In other words, investors and researchers can clearly observe that the overall fiscal health of the company is not an attractive one, and it also shows that the company is inefficient in its asset usage in comparison to the industry.

In the case of the leverage ratio, both debt ratio and debt to paid-in-capital are equal to 0 since there is no debt, and the same value can be found in the industry average. It is highly useful information for banks and other stakeholders because it reflects a company’s capability in regard to debt management and ability to meet the corresponding obligations (Barth & Miller, 2018). The lower ratio value makes it easier for a company to secure some form of loan, and since JAYB’s leverage ratio is equal to 0, one can realize that the company can always loan funds from, for example, banks to expand and grow more aggressively. In other words, it can be indicative of potential opportunities of JAYB for securing funds.

In the case of profitability ratios, the net profit margin is equal to -18.61 for JAYB and 21.74 for the industry average. The given ratio is indicative of how efficiently a company can generate profits, and since the value is negative, investors will be able to understand that the company is not profitable at the moment and operating at a loss. Since JAYB’s key objective is to achieve long-term profitability at the cost of immediate gains, the ratio is in accordance with the outlined strategy. In order to fully achieve the economies of scale, which will ensure lower cost of production and higher volume output, the company will have to reinvest the profits into improving and expanding manufacturing.

Table 3.

Cash Flow Analysis

The statement of cash flow can be accessed in Table 4. In the case of cash flow, the beginning and ending cash positions for quarters four, five, and six are 1 044 424 and 3 272 529, 3 272 529 and 2 501 054, and 2 501 054 and 1 713 884, respectively. Cash flows from current operations are cash flows from operations in the ordinary course of business of an entity. As a rule, they are associated with the formation of profit or loss from sales. The information on flows from current operations shows the level of cash coverage and also provides a basis for forecasting future cash flows.

In the case of cash flow from operating activities, the cash inflow in quarter 1 comes only from the company issuing stocks and raising capital, and there was no revenue. However, JAYB spent $200 000 on store expenses, which made the operating expenses = -200 000. In subsequent quarters, revenue started to emerge, increasing cash inflow, but operating activities were always at a negative value since JAYB is heavily reinvesting the revenue cash back into a sales force, marketing research, internet marketing, distribution, research, and development, and production. There is a strong and prominent pattern of revenue growth each quarter, where, from quarter 4 to 6, the revenue increases by roughly $1 000 000 or one million each period. However, since the company is in an attempt to have manufactured with high volume and low cost through economies of scale, it is evident that the operating expenses or cash outflows will also increase. Each term, the company gradually increased the operating expenses at a higher rate than revenue growth, which is why net operating cash flow is negatively increasing each subsequent quarter from -200 000 to -547 170.

Cash flows from investment operations are cash flows from transactions associated with the acquisition, creation, and disposal of investment operations. Information about them shows the level of expenses of the organization carried out for the acquisition or creation of non-current assets. In the case of investing activities, the only form of investment can be found in fixed production capacity, which occurs at quarters 1, 3, 5, and 6. The former two are equal to $480 000 each, and the latter two are equal to $240 000 each. These investing activities reduce the total cash flow by a significant amount. Therefore, both investing activities and operating activities are sources of cash outflow or cash reduction because JAYB reinvests all revenue cash back into the operations and additional amount from the common stock cash. In addition, the fixed production capacity investments are equal to $480 000 for every two quarters.

In the case of financing activities, the company primarily gains additional cash inflow or an increase in cash, excluding revenue, solely from an increase in common stock. Cash flows from financial transactions are cash flows from transactions related to attracting financing by an organization on a debt or equity basis, leading to a change in the amount and structure of capital and borrowed funds. Information about them predicts claims of creditors and shareholders in relation to future cash flows and future needs in attracting debt and equity financing. JAYB issued stock for during quarters 1 to 4 and did not issue them in the quarter 5 and 6. The total amount of increase in common stock for the first four quarters is equal to $5 000 000, which allowed the company to reinvest all of its revenue and more during the initial periods without losing cash. However, the lack of increase in common stock in the last quarter led to a decline in cash balance. In other words, JAYB aggressively used the common stock cash to jumpstart the business by heavily investing into operations and production capacity, and thus, sustaining the company on common stock money. This allowed JAYB to grow its revenue effectively, which can become a full source for cash inflow for future operating and investing activities.

Payments and receipts from a single transaction can relate to different types of cash flows. For example, the payment of interest is the cash flow from current transactions, and the repayment of the principal amount of the debt is the cash flow from financial transactions. When repaying the loan, both of these parts can be paid in one amount. Cash flows are reflected in the statement of cash flows with a subdivision into cash flows from current, investing, and financing operations. Each type of income is reported separately from the sale of the organization. Cash flows are reflected on a net basis in cases when they characterize not so much the activities of the organization as the activities of counterparties and when the receipts of some persons determine the corresponding payments to others. For example, agent’s cash flows, indirect taxes, receipts from the counterparty for reimbursement of utility bills, payment for transportation of goods with receipt of equivalent compensation from the counterparty. Thus, the calculation of the cash flow statement by direct and indirect methods showed that in the first case, to compile this reporting form, information is needed on the turnover of the company’s accounts, taking into account the corresponding accounts. In the case of the indirect method, the preparation of the cash flow statement is based largely on standard accounting forms.

Table 4.

Decisions and Scorecard Performance

The conscious scorecard can be accessed in Table 5 in the Appendix. The first identified decision is focused on quality inspections, which took place in all quarters of 2 to 6. This affected the company’s performance by increasing the quality costs every quarter from $47 681 in quarter 2 to $120 276 in quarter 6. The second identified decision is centered around the environmental concerns, which took place in quarter six, and it is evident that these additional expenditures are reflected in production and system improvement costs. The latter values are the highest in the sixth quarter, which shows the overall performance was impacted. Since these are mandatory decisions for the company to make in order to adhere to the strategic changes, such as improving employee safety and environmental impact, the increased operating cash outflows by a significant margin. The third decision is focused on supplier relationships, such as measuring and rewarding purchasing agents, which also impacted the performance in the research and developments section of the cash flow. The given decision took place in quarter 6, and the research and development operating expense increase are partly due to these measurement activities.

Sources

Barth, J. R., & Miller, S. M. (2018). Benefits and costs of a higher bank “leverage ratio.”Journal of Financial Stability, 38, 37–52. Web.

Chen, Y., Sun, I. Y., Ukaejiofo, R. U., Xiaoyang, T., & Brautigam, D. (2016). Learning from China? Manufacturing, investment, and technology transfer in Nigeria. IFPRI.

Karanikola, P., Tampakis, S., Matzaraki, L., & Tampakis, A. (2019). The residents’ take on using bicycles in the urban environment: The case of the city of Alexandroupolis, Greece.WSEAS Transactions On Environment and Development, 15, 204-212. Web.

Appendix

Table 5.