bikes r us
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Bikes R Us. Emily Foster, Emily Pelley , Jillian Marchand , and Zac Konings. OVERVIEW OF FINANCIAL RESULTS. Bikes R Us provides high quality mountain bikes for an economical price of $535/bike 2013 Results Include: Sales of Nearly: $8,700,000 Almost 25,000 units sold - PowerPoint PPT PresentationTRANSCRIPT
Bikes R UsEmily Foster, Emily Pelley, Jillian Marchand, and Zac Konings
OVERVIEW OF FINANCIAL RESULTS Bikes R Us provides high quality mountain bikes for an economical price of $535/bike
2013 Results Include: Sales of Nearly: $8,700,000 Almost 25,000 units sold Costs of around 4,500,000 Profits of close to 1,400,000 Share Holder Value of $12.17 Earnings Per Share: of $1.37
Overall the year has proved favourable with sales up almost 8% and profits up over 17% from 2012
Pricing Analysis Strong sales appear to be driven by price – Bikes R Us
increased it’s sales 7.6% compared to the industry average of 2.4%
Prices have recently been undercut by SpinAway, resulting in their 13.6% sales increase
Market tends to be concentrated in higher range(average of $555)
2011 2012 2013450
500
550
600
650
Bikes R UsSpin AwayPetal PushersFirm 4Pro Bike Swag
Awareness Analysis Awareness increased 4.3% in 2013, just missing the industry average
of 4.4% while falling far below the near 17% increase realized by SpinAway. No firms are close to target of 50%.
Spin Away’s high product awareness of 0.28 can be attributed to their $1.5 million advertising campaign and $400,000 branding strategy.
Although SpinAway sold roughly equal volume they failed to realize high profitability
A strong promotion strategy is clearly integral to high sales volume
Firm 2011 % 2012 % 2013
Petal Pushers 0.26 0 0.26 3.8 0.27
Pro Bike Swag Corp. 0.26 (11.5) 0.23 4.3 0.24
SpinAway 0.26 (7.7) 0.24 16.7 0.28
Firm4 0.26 3.8 0.27 (7.4) 0.25
Bikes R Us 0.26 (11.5) 0.23 4.3 0.24
Branding Analysis Bikes R Us pursued a modest branding campaign in 2013
spending and additional 20% to increase branding costs to $300,000
With an industry average of $390,000 Bikes R Us spent less than SpinAway ($400,000) and Pro Bike Swag ($750,000)
Overall increasing branding had a relatively weak positive correlation to sales as those with low branding(Petal pushers/Firm4) sold less than those with high branding
2011 2012 2013200000300000400000500000600000700000800000
Bikes R UsSpinAwayFirm 4/Petal PushersPro Bike Swag
Public Relations Analysis With an industry average of 18%, Bikes R Us falls considerably
behind at 12% and also behind Spin Away at 14% Mountain Bikes sales are extremely insensitive to increased PR. Pro Bike Swag’s spending of $600,000 and Firm 4’s spending of
$1 million on PR offer insights into future Road Bike Plans
2011 2012 20130.05
0.1
0.15
0.2
0.25
0.3
0.35
Bikes R UsSpin AwayPetal PushersFirm 4Pro Bike SwagTarget
Distribution Analysis High distribution rating relative to industry average of 0.23, while only failing
to meet SpinAway by 0.01 with distribution rating up 24% from last year High price firms - Petal Pushers and Firm 4 - chose to stay well below the
recommended distribution level of 50% High sales of the two firms is a result of the close negative correlation between
low retailer margins and higher retail sale values
Firm 2011 % 2012 % 2013
Petal Pushers 0.21 0.0 0.21 (33.8) 0.14
Pro Bike Swag Corp. 0.21 0.0 0.21 4.8 0.22
SpinAway 0.21 0.0 0.21 28.6 0.27
Firm4 0.21 0.0 0.21 0.0 0.21
Bikes R Us 0.21 0.0 0.21 23.8 0.26
Conclusions Sales are up about 8% from last year, and profits are rising fairly steadily at a
rate of 17-18% Highest retail sales as a result of favourable retail margins and channel support
of $280,000 which is above the industry average To maximize potential profit we must continue to penetrate more retail outlets
and marry push and pull strategies of marketing Largest threat is SpinAway’s recent price action of undercutting our firm,
although unreasonably high expenditures have made the firm relatively unprofitable
Penetrate outletsContinue
advertising/distribution intensity
Increase profits/outperform
competition
Questions?