mikes bikes
DESCRIPTION
This was a presentation that my group and I put together for our Business I class. The project was based on a bike company we started in a business simulator.TRANSCRIPT
Reaching out for a healthier, greener horizon.
Megan Zacarias
Chief Executive Officer
Karthik Ravichander
Chief Financial Officer
Lynn Lan
Chief Operating Officer
Heather Collins Chief Marketing Officer
Laura Calderone Chief Information Officer
Executive Officers
Infinite Horizon 2008 - 2018
• Planning• Execution• Problems• Reevaluation• Future Plans
Mission Statement
To produce bicycles that are readily available to a wide range of consumers while
benefitting the environment and surrounding communities.
Planning
• Success strategy– Product– Price– Promotion– Distribution
• Finances• Vision for the company
DistributionEfficiencyAdvertisingSavingsFun Times
BUT WE FAILED
Execution and Problems
• Overall• Financial Management• Product and Firm Marketing• Operations Management
2008 – 2018 Performance
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180
2
4
6
8
10
12
14
16
18
0
2000000
4000000
6000000
8000000
10000000
12000000
14000000
16000000
18000000
Shareholder Value Profit Margin Revenues
Shar
ehol
der V
alue
($),
Profi
t Mar
gin
(%)
Who
lesa
le S
ales
Rev
enue
($)
Market Comparison
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180
5
10
15
20
25
30
35
40
Infinite Horizon Market Average
Shar
ehol
der V
alue
($)
Financial Management
• Debt– Repayment in 2011– Positive and Negative consequences
• Equity– Infinite Horizon as a private company– Repurchasing from 2008 - 2017– Repurchasing in 2018
Debt Management
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180.00
0.05
0.10
0.15
0.20
0.25
0
2
4
6
8
10
12
14
16
18
Debt to Asset Ratio Shareholder Value
Deb
t to
Ass
et R
atio
Shar
ehol
der V
alue
($)
Product Marketing
• Internal Debate: How low is low priced?• Price Jumps– Fireburst increased $15 in 2014– Adv4 increased $10 in 2015
• Phoenix intended as higher priced youth bike
Pricing
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018445
450
455
460
465
470
475
17000
19000
21000
23000
25000
27000
29000
31000
33000
Adv4 Mountain Bike
Price Sales
Pric
e ($
)
Sale
s (u
nits
)
Product Marketing
• Initial splash in advertising– Gain market advantage
• 2013: Edited and reallocated expenditures– Budget remained constant
• Effect on sales• Heavy burden
Advertising
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
10000
20000
30000
40000
50000
60000
70000
80000
Advertising Expenditure Sales
Adv
ertis
ing
Expe
ndit
ure
($)
Sale
s (u
nits
)
Product Marketing
• PR was first expense to be cut• Major drop every two years• Bare minimum for youth sector• Trial and error
Firm Marketing
• Effects of average retail margin– Adv4 Mountain Bikes– Fireburst and Phoenix
• Internal Debate: How heavily should we focus on margin?
• Distribution increased by increased margin
Distribution
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 201815
20
25
30
35
40
15000
17000
19000
21000
23000
25000
27000
29000
31000
33000
35000
Average Retailer Margin Adv4Fireburst Phoenix
Ave
rage
Ret
aile
r Mar
gin
Sale
s (u
nits
)
Firm Marketing
• Branding was lowest expenditure• Small decreases during first 6 years
maintained profit margin• 2015: increased after class discussion• Negligible effect
Operations Management
• Capacity– Low Price, High Volume
• Entering the Youth Bike Market• Problems we encountered
Capacity and Production
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180
10000
20000
30000
40000
50000
60000
70000
80000
90000
17000
22000
27000
32000
37000
Production Sales Capacity
Prod
uctio
n, S
ales
(uni
ts)
Capa
city
(SCU
)
Efficiency
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180
5
10
15
20
25
30
35
40
0
500000
1000000
1500000
2000000
2500000
Wastage Idle Efficiency Expenditure
Was
tage
, Idl
e (%
)
Effici
ency
Exp
endi
ture
($)
Quality Market Comparison
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180.55
0.60
0.65
0.70
0.75
0.80
Infinite Horizon Market Average
Qua
lity
Inde
x
Reevaluation
• Quality• Debt Management• Pricing• Capacity• Branding
• …Quality
Future of Infinite Horizon
• Option 1• Option 2
Infinite Horizon 2008 - 2018
• Planning• Execution• Problems• Reevaluation• Future Plans