Case Study: Kootenay Bicycle Company
Case Study:
Kootenay Bicycle Company
Prepared for:
Cam Shackelton
Feb 13, 2007
EXECUTIVE SUMMARY
Kootenay Bicycles (Kootenay) build custom frame or bike in a large metropolitan area in western Canada since 2002. Although sales have been steadily increasing since inception, it has not been successfully translated to profits. Signs of operational inefficiencies, lack of financing and limited expandability limits its growth.
This report analyzes Kootenay’s current strategic alternatives, with a diagnosis of the company at all levels to formulate the best strategic direction the company should undertake. As a result, the following strategic options were considered and Kootenay is recommended to: • Accept MHB alliance proposal after detail review of contract and analysis; • Reject financing proposal from angel investor; • Reject distribution proposal from retail chain stores;
Operational efficiency is also addressed with a detailed implementation plan. By implementing the strategic and operational recommendations discussed in this report, Kootenay is destined for both short and long term sustainable growth.
TABLE OF CONTENTS
INTRODUCTION 1
SITUATIONAL ANALYSIS 2 Internal Environment 2 External Environment 2 Financial Analysis 3 Strategic Mission 3
STRATEGIC OPTIONS 4 Strategic Option 1: Independent Growth 4 Strategic Option 2: Angel Investor 5 Strategic Option 3: Retail chain store 6 Strategic Option 4: Mountain High Bike (MHB) 7
STRATEGIC RECOMMENDATIONS 7 Alliance with MHB 7 Revisiting Mission Statement 8
OPERATION ISSUES 7 Product Mix 9 Productivity 10 Production Capacity 10 Pricing 10 Accounting 10 Activity Based Costing 10 Marketing 10 Human Resource Management 10 Supply Chain Management 10 IT System 11
IMPLEMENTATION PLAN 13
CONCLUSION 16
EXHIBIT 1 17 SWOT Analysis 17
EXHIBIT 2 18 Financial Data 18 Alliance with Mountain High Bike (MHB) 18 Financial ratio
Kootenay Bicycle Company
Prepared for:
Cam Shackelton
Feb 13, 2007
EXECUTIVE SUMMARY
Kootenay Bicycles (Kootenay) build custom frame or bike in a large metropolitan area in western Canada since 2002. Although sales have been steadily increasing since inception, it has not been successfully translated to profits. Signs of operational inefficiencies, lack of financing and limited expandability limits its growth.
This report analyzes Kootenay’s current strategic alternatives, with a diagnosis of the company at all levels to formulate the best strategic direction the company should undertake. As a result, the following strategic options were considered and Kootenay is recommended to: • Accept MHB alliance proposal after detail review of contract and analysis; • Reject financing proposal from angel investor; • Reject distribution proposal from retail chain stores;
Operational efficiency is also addressed with a detailed implementation plan. By implementing the strategic and operational recommendations discussed in this report, Kootenay is destined for both short and long term sustainable growth.
TABLE OF CONTENTS
INTRODUCTION 1
SITUATIONAL ANALYSIS 2 Internal Environment 2 External Environment 2 Financial Analysis 3 Strategic Mission 3
STRATEGIC OPTIONS 4 Strategic Option 1: Independent Growth 4 Strategic Option 2: Angel Investor 5 Strategic Option 3: Retail chain store 6 Strategic Option 4: Mountain High Bike (MHB) 7
STRATEGIC RECOMMENDATIONS 7 Alliance with MHB 7 Revisiting Mission Statement 8
OPERATION ISSUES 7 Product Mix 9 Productivity 10 Production Capacity 10 Pricing 10 Accounting 10 Activity Based Costing 10 Marketing 10 Human Resource Management 10 Supply Chain Management 10 IT System 11
IMPLEMENTATION PLAN 13
CONCLUSION 16
EXHIBIT 1 17 SWOT Analysis 17
EXHIBIT 2 18 Financial Data 18 Alliance with Mountain High Bike (MHB) 18 Financial ratio
References: 1) http://en.wikipedia.org, Retrived February 6, 2007 2) www.futureshop.ca, retrieved on February 3, 2007 3) Industry Canada - Bicycle Sector (2000) http://strategis.ic.gc.ca/epic/internet/insg-as.nsf/en/sg01103e.html 4) Katherine F 5) Bicycle retailers and industry news, April 1, 2006 www.bicycleretailers.com ----------------------- [1] http://en.wikipedia.org, Retrived February 6, 2007 [2] www.futureshop.ca, retrieved on February 3, 2007 [3] Industry Canada - Bicycle Sector (2000) http://strategis.ic.gc.ca/epic/internet/insg-as.nsf/en/sg01103e.html [4] Katherine F [5] Bicycle retailers and industry news, April 1, 2006 www.bicycleretailers.com -----------------------