Street Bicycles

Make a quick trip on the open road to add more dimensions of customer value

Business is more complicated than many believe. Sometimes are just missing one or two elements to be much more successful. For example, you have developed a new product very fine, but could not get anyone's attention to consider buying it? A brand name or a powerful dealer could have solved that problem for you.

If you do not have the resources available within your company, the partners must be able to provide what you need. But you have to know what you need and secure in a timely manner.

Sometimes a model company's business is inhibited by the possibility of expanding the opportunities that obviously lay. In this case, a new business model must be forged that not only allows a company to expand into other areas of opportunity, but does so in a way that provides the consumer and competitive advantages.

Let's go to the bike shop for see how this was done by a manufacturer. For over 50 years, Huffy Corporation is focused on the design and manufacture of a bicycle brand and its selling primarily in the United States. For more than 40 of those years, the company's business model works well. When stopped working, the company took to react.

Under the old business model, Huffy had to guess what kind how many bikes would be sold. If too many parts were ordered and shipped as bicycles, the company could lose money. The company had to be conservative in its estimates of future demand. If sales that was removed was that bad, but better to take inventory losses.

This business model also discouraged trying to add new items. If the new bikes were not sold, losses would be terrible. At the same time, the area was controlled by cutting other costs of manufacture. So much attention was paid to the factory operations.

Many competitors had begun to have access to their bikes at sea earlier this year. Huffy people looked at this, but had no chance that the costs, quality and delivery could be competitive.

Under Mr. Don Graber, the company made a rapid transition to a new, focused on customer business model for bicycles. Huffy now operates more similar to Nike, the footwear and clothing retailer, a company manufacturing consumer products.

Like sneakers and sportswear, bicycles have become a hot topic and more specialized. Bicycling is also diversifying to reflect new technologies and new concepts of what bikes can do.

As part of this change, not Huffy and have their own bikes, relying instead on more faster, less expensive, more versatile and foreign suppliers. Huffy has also expanded its product line to include more brands.

Success Early this differentiated approach to customer-facing increase was in an increasingly online scooter in 2000. Huffy had a scooter usually sell 200,000 units per year. As sales of new scooter off, Huffy was quickly able to expand their range. However, capital spending budget for this rapid acceleration zero. Under the old business model, most of the profits would have been lost while the investments were significant.

In the process, The focus of the company has gone from inventory management of risks to a speedy trial of promising new concepts.

How did the company find the opportunity to make the transition?

First, Mr. Graber had experience in the international group in the Black & Decker, which gave a good sense what the international manufacturers can do today. By working with leaders of Huffy said it was cheaper and better for bicycles inside the company, Mr. Graber asked test that orders placed in competitive amounts to find out what costs, quality and delivery would be in reality. The results topped expectations and the company never looked back.

As useful as the costs and savings of the investments were, Mr. Graber was much more interested in being able to do a better job for consumers. Because bicycles are a smaller category than many other consumer goods, it is impractical to launch advertising-based television large. The company aims at promoting the use of bicycles new events, word of mouth, websites, and advertising specialty as a substitute.

As skill develops, the business model will further expand in this direction of marketing low-cost brand. With more than listening to consumers, the company's ability to identify opportunities for new products and brands must also improve.

Copyright Donald W. Mitchell 2009, All rights reserved

About the Author

Donald Mitchell is CEO of Mitchell and Company, a strategy and financial consulting firm in Weston, MA. He is coauthor of seven books including Adventures of an Optimist, The 2,000 Percent Solution, and The Ultimate Competitive Advantage. You can find free tips for accomplishing 20 times more by registering at:
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