Specialized

This case study is about “Specialized Bicycle Components Inc.” known as Ride the Red “S”. Specialized was founded in 1974 by Mike Sinyard. According to Chris Murphy, director of marketing for Red “S”, specialized is for serious riders. He says, “The customer is buying the ride from us, not just the bike.” The company began to produce its own bike parts by 1976, and introduced the first major production mountain bike in the world in 1980. Specialized now has an extensive global distribution network of 5000 retailers in 35 countries in Asia, North America, South America, and Australia. They maintained a reputation as the technological leader in the bike and bike accessories. The formal mission is still the same since they established the company “To give everyone the best ride of their life.”

Specialized produces a full range of high-end and entry-level road bikes, mountain bikes, commuter/city bikes, children’s bikes, BMX bikes, and offers an extensive line of bike accessories. They divide the bike market in two categories: (1) the retailer- it only sells to the retailer because they realizes a strong relationship with the dealers is a key factor for success. (2) The end-user consumer- its focus in designing the product and broken down into the target age groups.

SWOT Analysis:

Internal Strengths

• Higher technology and enough innovation ability in design.

• Good retailer relationship and extensive global distribution network (5000 retailers in the world)

• Good advertisement.

• The people in the company and the passion which the people have for what they were doing.

Weaknesses

• Sales amount was going down.

• Dealers don’t have the time to educate customer in each product of every line that they carry.

• Just focus on the retailer instead of the end-users.

• Competition - There are now more than 20 manufacturers in the bicycle industry and Specialized will need to stay at the forefront in order to keep its leadership.

External Opportunities

• More people (94%) have new requirements for bicycles; the customers need bikes in different fields.

• The popularity of Lance Armstrong has increased the interest on road bike, which represent 5% of the market.

• The growing interest in cycling this is result in magazine coverage and the using of bikes and accessories in window displays that related to cycling.

• The company constantly visits and context dealer to keep in touch with the changes needs and desires for the consumers and dealers.

• This is also considered as an oppertunity for the company to gather vital feedback that can constantly enable them to produce better products which are high in quality and low in price.

Threats

• Competition and pricing – There are 20 other manufacturers and that puts a lot of pressure on Specialized to be at the forefront of their industry.

• There are fewer and fewer good retailers and people who retailers are lining up the most run and profit about companies.

• Sales and marketing - Other manufacturers are selling through other mediums other than retailers which could limit Specialized’s exposure to the end-user.

2. As part of step 2 of the planning phase and using your SWOT analysis, select target market on which you might focus for present and potential bikers.

Specialized current target markets are two age groups i.e., 18-25 year old and the 30-40 year old professionals. First, to increase their sales, the company should broaden its market groups to include the baby boomers that are at the top of their “earning” power and can easily afford to pay for the “specialized bike designs” that the company is focused on. The baby boomers not only have the money but also have the time, with most of their kids in college or on their own. It is also an alternative to other fitness programs that the boomers have gone into such as the gyms and spas, by doing that it can attract more consumers. Second, advertising their products would also be a key factor in