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East Coast Rims

East Coast Rims

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East Coast Rims

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  1. East Coast Rims Jillian Geddes, Austin Carter, Cary Konopka, Bailey Penney Rolling in all Weather

  2. OVER VIEW OF RESULTS • East Coast Rims serves as a bike retailer with a high price, large awareness and high quality rating. • Results for 2018 • Sales of $37,218,240(increase of 16.6%) • 25,588 units sold (Decrease of 1.58% in mountain bike industry) • Highest units sold in road and youth bikes • Costs of $15,279,437 (decrease of 2.39%) • A profit of $11,904,440 (increase of 51.6%) • Shareholder value of $110.88 (increase of 86%) • Earnings per share of $16.15 • East Coast Rims market strategy involved high price, and high awareness • East Coast Rims is in direct competition with Whistler Bikes.

  3. A statement of the firms strategy • East Coast Rims road and mountain bikes are high quality, high price bikes. • Youth bikes are low price, high quality and quantity • East Coast Rims shareholder value $110.88 and EPS of $16.15 • In direct competition with Whistler Bikes who has a shareholder value of $102.42

  4. Firms financial results • East Coast Rims had Wholesale sales of 37,218,240 • Mountain bike sales of 25,588 • Road bike sales of 7,400 • Youth bike sales of 64,000 • 2018 COGS of $15,279,437 with a decrease in costs of 2.45% from 2017-2018 • 2018 profits of $11,904,440 seeing a 52% increase from 2017

  5. Financial analysis • Average sales growth 29% • Ability to reduce cost of production-management COGS 41% compared to IA 56% • Profitability, highlight 2015 capital spending • Return on sales • 5 year EPS growth 70.8% • Cash position • Financing • P/E 6.04, 7.88 • PEG .085

  6. Marketing analysis • Marketing = branding, public relations and advertising • Branded as high quality high price • Match target for each dimension of marketing • Aimed above target youth and road bike market because of high price sensitivity • Youth bike market high price high quality vastly under producing, then making the executive decision to drop price and increase production • Youth bike market, awareness rating of.33 , slightly higher than the recommended • Distribution rating of .54 in the road bike market compared to the .51 of whistler • East Coast Rims highly effective and efficient marketing = dominating all markets • Posting the highest total sales in all markets since 2015

  7. Operations analysis • Decrease in COGS by 16%, giving East Coast Rims a COGS percentage of 41.1%. • 15.9% lower than the industry average • Highest capacity in the industry, due to the demand for our products. With 46,000 standard capacity units. • Quality rating of 0.83, the highest within the industry. • High wastage of 21%, due to the large amount of capacity. • Working at full capacity, creating no idle time.

  8. Swot analysis • Strengths • Efficient and effective marketing strategy • Generate sales $.13/$1 of sales, Whistler Bikes $.193/$1 • COGS • Distribution strategy • Ability to anticipate competitor’s decisions • Financial management

  9. SWOT ANALYSIS • Weaknesses • Underproduction causing loss of: • Youth bike sales: 42.3%, 22.7%, 3% • Road bike sales: 14.1% 8.9% 4.5% • Future distribution • Opportunities • Cash position of competitors and profitability of competitors • Rest of youth bike market • Product Improve

  10. SWOT ANALYSIS • Threats • Whistler Bike’s COGS and marketing strategy • New bike launch by competition

  11. Recommendations for the future • Increase average retailer margin • Bike shops: 40% • Sport stores: 35% • Discount stores: 35% • Capitalize on all markets • 16% in youth bike market • 21% in road bike market • 7% in mountain bike market • Increase capacity for expected future demand • Maintain dividend, and quality index

  12. RECOMMENDATIONS FOR THE FUTURE • Wholesale sales increase of 21% in 2019 • Supply of sales to bike market by 2020 • 23% in mountain bike • 44% in road bike • 59% in youth bike

  13. CONCLUSION • Consistent high sales, driven by high awareness, high price • Highest SHV $110.88 • Highest Earnings per share $16.150 • Lowest COGS in 2018 • Biggest threats include direct competitor Whistler Bikes, very close SHV with a similar price and product strategy but lower quality, distribution, and wholesales. • Be future oriented in order to ensure that East Coast Rims remains a successful company