Strategic Analysis of Brompton's Business: Market and Competition, Study Guides, Projects, Research of Marketing

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Strategic Analysis ofBrompton’s Business

Brompton’s Bicycle Models

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Brompton produces three models, M, P and S^ –

the X version of each model indicates a superlight specification made out of titanium

M (and MX model) •^

The all round, general purpose bike

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A best seller with room for luggage at the front

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UK RRP = £630 (and £1,050)

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Weight = 11.5kg (and 10.5kg)

P (and PX model) •^

The touring bike, with a rear rack for luggage

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UK RRP = £765 (and £1,185)

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Weight = 12.2kg (and 11.3kg)

S (and SX model) •^

For a more ‘sporty’ ride

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UKRRP = £630 (and £1,050)

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Weight = 10.7kg (and 9.8 kg)

Routes to Market

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Evidence C and D refer to some of Brompton’s competitors in the folding bikemarket. There are three routes to market:

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Traditional bike dealers (independents, bike shops and chains)^ –

Work closely with the manufacturer – Provide a full after sales service / repairs – Medium and high priced bikes – Higher margin, lower volume

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Mass market, discount retailers such as Tesco and Argos^ –

Retail bikes on behalf of manufacturers – Little or no after sales service – Low and cut price bikes – Low margin, growing volume

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Internet retailers such as Daudbikes^ –

UK based importer – Outsourced own brand production and wholesaler for other bike brands – Provide internet/mail order delivery and no value added – Very low prices (from £69) – Low margin, emerging market

Some of Brompton’s Competitors

Competitor

Production

Summary

Airnimal

UK

High performance bikes. Good folders. From £800.

Dahon

China

Wide range of bikes including small and large wheels. USA based. Sold asDahon or made by Dahon and sold under other brand names. £250 to £2,

Di Blasi

Italy

Very wide range of bikes including trikes and mopeds. Good folders.

Giant

Taiwan

Wide range bikes. Giant Halfway is the best known. A good folder from £350.

Go-Bike

Taiwan

New entrant to the folding market. 20” wheel.

Green GearCycling

USA

Good riding performance. Custom built bikes. Leading brand is Bike Friday.From £900 to £2,000.

Mobiky

France

Good folder, but quite heavy.

Moulton

UK

Fast, sporty performance bikes. Poor folders. Expensive from £5,000.

Riese undMuller

Taiwan

German designed. Leading brands are the Birdy and the Frog. Good folders.From £800.

Pashley

UK

The UK’s other volume supplier besides Brompton. Specialist, unconventionalmodels such as trikes, unicycles and delivery bikes.

The case study raises a number of interesting questions

about Brompton Bicycle Limited’s business

Factory in London:^ Design and Build (skilled machining & complex engineering) Outsourced production^ (non core elements)

Bike Shops (in UK and USA) Distribution Network (in Rest of the World)

Bicycle Customers

Production

Distribution & Sales

Buyers

Folding bikes& spare partsfor servicing& repair

Can production processesbe undertaken moreefficiently?

How fast can theymove into new geographical markets?

Can new products besuccessfully targeted andlaunched?

To what extent isproduction in the UKa benefit or a cost?

How fast and by howmuch can productioncapacity be increased?

Key Strategy Question:^ What are BromptonBicycles’ Strengths,

Weaknesses and Issues in

its four main business

activities?

Marketing^ Human^ Resources

Operations

Finance

Brompton Bicycles’ capability to compete successfully in

the market for folding bicycles will be affected by the

company’s strengths and weaknesses

MARKETING:

… with a strong brand name and strengths across the

marketing mix…

Product •^

A range of rear suspension bikes that fold within 20 seconds to the size of a smallsuitcase and which can then be stored in a luggage rack, cupboard or under a desk

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Spares - additional revenue is generated from the sale of spare parts, all made byBrompton, for service and repair work done via the shop and distribution network Price •^

Selling prices of £550 to £1,200, targeted at the higher end of the folding bike market Place •^

Sales to bike dealers through a distribution network^ –

Direct to bike shops in the UK (100 shops) and the USA (10 shops) – these shops becomestakeholders – Via distributors in other parts of the world

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No internet sales because of the importance of after sales service with shops and dealers

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Sales income is distributed: Europe and the Far East = 65%, USA = 5%, Rest of theWorld = 30%

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Sales are made in 27 export markets Promotion •^

Word of mouth marketing is very important

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Lots of personal selling – dealers come to the Brentford factory to “try and buy” the bikes

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Brompton World Championship (BWC) race is in its fourth year. It is a 13km race onBrompton bikes around Blenheim Palace. Tour of Spain winner Roberto Heras holds theworld record time, set in Barcelona two years ago.