Mikes Bikes Business Plan PDF

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Big Baller Bikes

Group Members: Michael Stedman, Erik Szilagyi, Carlos Betances, Amir McCormick

Executive Summary; Big Baller Bikes was created with the idea in mind that we will create and distribute the most affordable, yet best quality mountain bikes in the market today. Whether you are riding to work, or simply riding to the basketball courts with some friends, we know how crucial bicycles are when it comes to efficient transportation. The following business plan takes a closer look at how Big Baller Bikes can maintain such high-quality products, and what the company plans to do moving forward. The following information has been gathered about the company: mission statement, situational analysis, SWOT analysis, business resources, business strategy, financial projections and budgets. The overall goal of Big Baller Bikes is to create the highest quality bicycles in order to be the leading bike company in the market. Our business strategy is aimed at mass producing bikes and selling them at affordable prices. One of the first actions by the company to achieve this was to set the bicycles at a medium price range. By doing this, we can guarantee a stable growth of loyal customers over time. Some competitors price their bikes at very low or very high prices. While these actions may have beneficial short-term outcomes, they will most likely suffer long term. Another imperative aspect of the company is advertising. How a company spends its resources on advertising can determine its success. We as a company have decided that to have the maximum number of customers, we must advertise to satisfy all parts of the market. Some other important parts of the business plan are the situational analysis and the SWOT analysis. These analyze internal and external factors that may influence the company. The last part of the business plan is a summary of what the company plans to accomplish in the future. We intend to continue to mass produce our quality bicycles and sell at a medium price

range in order to have a mass appeal to customers. This way, Big Baller Bikes will be the dominant force in the bike market.

Mission Statement Our mission is to produce high quality bicycles and cycling gadgetry at a competitive price while satisfying customer needs. Our products offer environmentally friendly methods of transportation for those out there who want to make a difference in the world. A luxurious design combined with cutting edge technology offers features that consumers will not find with other brands. We have a variety of products that have been battle-tested on all types of terrains to suit any type of rider. We offer children’s bikes so even “Small Ballers” can ride around town while being safe and stylish.

Situation Analysis Competitive forces: 1.Competitors: Our competitors Double Go 7 Bikes, Bike City, Dragon Bikes, Elite Bikes, KlonBikes Inc., 5 Star Bikes, and Tricycle all sell similar products and are trying to reach a similar target market. They could pose a threat to Big Baller Bikes capturing potential consumers. 2.Other forms of transportation: Cars, motorized bikes, ubers and taxis are all other forms of transportation potential consumers may choose over riding a bike. Each method has different advantages and disadvantages. The existence of the other options gives consumers alternatives to bicycles which could diminish the amount of business we receive.

3.Branding: Differentiating Big Baller Bikes from any ordinary bicycle manufacturer is a task that is important to the success of our movement. The conversion of the mindset of an ordinary consumer to the mindset of a “Big Baller” is something that needs to happen with initial purchase of a Big Baller Bikes product. Establishing the reputation of a prestigious brand and gaining the loyalty of customers is just as important as money.

*Economic forces: 1.Gas Prices: The price of gas can affect the number of potential customers. If the price of gas is high consumers will be looking for cheaper alternatives to riding in a car. If the price is low consumers may be more inclined to ride in vehicles that are gas powered due to quicker transportation. 2.Employment/Unemployment: The percentage of people unemployed can affect the market size of those who are looking to purchase a bicycle. If consumers lack discretionary income to spend on bicycles and other discretionary items sales will decline. However, if the amount of people employed is high and consumers have a steadier flow of discretionary income bicycle sales are likely to rise. 3.Operating and Manufacturing Costs: If the cost of doing business becomes too high Big Baller Bikes may need to produce less bikes to stay in business and may not meet the demand for bicycles. *Legal and Regulatory forces: 1.Safety Regulations: If safety regulations for bicycles change or new laws are enforced, adapting to new standards may affect our ability to produce and sell bicycles.

2.Environmental Policies: New policies surrounding the environment and public health may arise and may promote the use of bicycles and other methods of transportation that have a small carbon footprint. Policies such as can lead to an increase in sales. 3.Workplace Standards: New workplace standards that regulate our manufacturing plants and what is considered a safe workplace can increase the cost of doing business or make it harder to produce more bicycles. This has a direct result on the volume of business that we do. *Technological forces: 1.Production Technology: Improvements in production technology that allows for more efficient bicycle production will increase the number of bikes we are able to produce, while using less resources. Saving costs in this area will allow for our profit margins to rise. 2.Online Presence: Maintaining a relevant and competitive online presence is important to sales. In today’s digital age majority of consumers shop online. Allowing easy access to our inventory and making online purchases easy is crucial to the success of our business. 3.Advances in Bicycle Technology: As new biking technology is invented, it is important that we incorporate these advances into our design so that we can remain ahead of the curve and competitive. Consumers are attracted to the newest products with the most cutting-edge technology. *Socio-cultural forces: 1.Bicycle Niche: Controlling the bicycle niche is essential to the success of our business. Automotive transportation will always be more dominant so capturing majority of the market of consumers who prefer bicycles is important to stability and growth. 2.Go Green Campaign: Environmentally conscious consumers seek automotive alternatives and often find themselves in the market for a bicycle. Movements and campaigns focused on the

improvement of the environment create opportunities for consumers to convert from automobiles to bikes. 3.Obesity: Obesity has been a problem in the United States for the last 25 years. Nearly 70% of Americans are considered obese. Exercise is essential to the health of all human beings and activities such as riding a bicycle can help lower obesity.

SWOT Analysis Strengths: 1. Technology: Big Baller Bikes makes it it’s mission to use the newest and most advanced to produce the most superior bikes. (External) 2. Location: The company has several stores within major urban areas, as well as the surrounding suburbs to make it easily accessible for anyone to come to a store and purchase a bike. (Internal) 3. Advertising: With vast outlets for advertising, Big Baller Brand can receive recognition very well. (Internal) Weaknesses: 1. Costs: As the company gains new customers, there will be a very high demand for bikes, and therefore they must increase the production of bikes. This has the potential to be very costly and may introduce problems for the company. For example, employee salaries may be affected. (Internal) 2. Poor distribution: At an early stage of the company’s development, it has been a struggle to develop sufficient distribution channels to satisfy customers in every part of the world. (Internal)

3. Scarce Resources: Being that Big Baller Bikes is a relatively new company, we may not have a great amount of cash or materials to purchase what we need, or to get rid of newly acquired debt. (Internal)

Opportunities: 1. New Products: With the company’s current success and the very positive outlook, Big Baller Bikes will begin to develop several different products. This is in hopes that the company will increase potential customers. (Internal) 2. Online Distribution: As Big Baller Bikes becomes better known, opportunities for partnering with online distributors will open up. For example, being in business with amazon would introduce millions of potential customers to Big Baller Bikes. (Internal) 3. Celebrity Endorsements: Once the company is well recognized, there is a great chance that celebrities will become interested in our products. Professional cyclists and BMX riders can have a significant impact on future sales. (External)

Threats: 1. Regulations: There is the potential of government policies being introduced which may have a detrimental effect on the company. International connections could be hurt if there are policies passed to reduce foreign exchange. (External) 2. Close Substitutes: With technology increasing at a drastic rate, it is possible that consumers will tend to lean towards a substitute to a regular bike. For example, motorized bikes, scooters, and transportation apps can all draw potential customers away from Big Baller Bikes. (External)

3. Competitors: There is a large threat in the future that competitors in our market may become the leaders if Big Baller Bikes does not continue to make intelligent business decisions. (External)

Business Resources Human Resources: Experience and Expertise We all took it upon ourselves to assign roles in the development of this business to succeed. Each of our members contributed equally to the tasks assigned and made sure we worked as efficiently as possible. Michael had the role of the President and was responsible for the decision making in our group as well as making sure we were on top of our assigned tasks and deadlines. Carlos has the role of the Vice President, and he oversaw/carried all the decisions made by the president. Amir Is the head of public relations where his task was to keep track of all competitors and crucial information for upcoming rollovers. Erik has the role of the accountant where it was his job to keep track of all the numbers and make decisions based on this information. Financial Resources: We took control of all operations including the distribution, shareholder value, and production but implemented our branding strategy to create our image. Product, debt, and equity are also an essential part of our financial resources as well as our capacity. We used distribution as a critical vehicle to carry out our product based on our retailers. We used our forecast results to implement the number of bikes we were to produce each year and increase our shareholder value. We used branding and capacity to try and reproduce our bikes in profitable ways to improve our firms value.

Business Strategy ➢ Objective 1: Augment Shareholder Value over $25 Desired Date: February 14th (Rollover number 5) If we are to hover in the medium price range category, we expected our whole sales to slowly rise because of increased awareness of our brand when we steadily increase our devotion to advertising and brand awareness. In addition, our capacity numbers should reflect a steady decrease of idle percentage (increased productivity) and conversely a better production and wastage percentage, resulting in what we would expect to be an increased SHV. ➢ Objective 2: Reduced Wastage below 12% Desired Date: February 9th (Rollover number 4) Each rollover we plan on incrementally adding $65,000 to our efficiency from the current $125,000 in expenditure already devoted currently. Although, we are aware of the law of diminishing returns that is shown on the Efficiency Function Graph we are confident that by deploying this strategy we can ultimately increase our efficiency and income ratings to an already rising sales and revenue ratings. ➢ Objective 3: Brand Awareness Index above 38% Desired Date: February 16th (Rollover number 6) Our strategic placement of a medium/medium allows us to cater to all segmentations of customers as we plan on investing heavily on advertising and branding to give our product(s) an awareness rating that will in turn lead to an uptick in sales. We plan on following an incremental uptick of advertising as the rollovers progress, meaning we would invest a whopping 2.2 million dollars into advertising alone by the desired date, with a heavy concentration on Internet advertising. As well, we anticipate that by increasing the amount invested in branding of at least

over a million by the desired date, we would produce a branding index of at least .45 that will in turn produce increased sales as we continue to hover around a medium price range, in turn increasing SHV. ➢ Objective 4: Increased Market Share above 15% Desired Date: February 14th (Rollover number 5) Market share is directly influenced by the amount of retail sales, meaning we plan to tackle this by increasing our amount of production. We plan on increasing our production on an incremental basis, as youth and road bikes enter the fold, we can expect to be have at least 27,000 produced bikes in total, come the fifth rollover. As well, we plan on allocating at least $150,000 in support to bikes shops come the fifth rollover, because we anticipate that store loyalty will create incentive to showcase our product more readily than our industry competitors.

Financial Projections and Budgets As depicted by the “Advertising and PR Reach by Media” graph we as a firm anticipate that we will devote the largest portion of our funds eventually to Internet. By the time we reach the maximum amount of 3 million dollars we become aware that magazines follow the law of diminishing returns, inherently reaching less potential customers, meaning we will devote less of our funds to that aspect of Advertising/PR. As a firm we believe it is paramount we build a longlasting relationship with our wholesalers, so we intend on devoting an increasing amount to margin percentages and amount of support as the rollovers progress, that way it gives our shops an incentive to sell our product over the competitors. Our intended mountain bike consumer show more interest when caught by advertising than public relations, and as depicted in our graphs we have invested more than three times more in advertising than public relations. Brand

awareness is a crucial facet of our business as our firm has dedicated our mission statement to the notion that our “Big Baller” image is the deciding factor in this chaotic market environment. In regard to “suggested” values provided by Mikes Bikes we sold our bikes for only $5 more than recommended, but eventually out produced our suggested amounts by almost 6,000 bikes, as we continue to produce in mass volume as a part of our goal to have outstanding brand awareness and (medium/medium) price ranges. Initially we started small in advertising and public relations with a combined $200,000 less than the suggested values as a way of penetrating the market, but as time progressed we have gone all in advertising and public relations with over $2.5 million invested almost twice what would usually be expected. For these current rollovers we slightly decreased the marginal percentage given to wholesalers from the suggested values but raised the support numbers to compensate for the loss in percentage....