case study

Topics: Bicycle, Innovation, Term Pages: 188 (38078 words) Published: November 9, 2013
Professor Edward Desmarais
BUS470 Business Policy and Strategy
Fall 2001

CANNONDALE Cororation
case analysis

December 17, 2001

International Strategic Annalists
Table of Contents

A. Executive Summary……………………………………………………………. 1

B. Current Situation……………………………………………………………. 2 Current Performance……………………………………...……………. 2 Strategic Posture…………………………………………..………. 4 Corporate Governance………………………………………………..….18

C. External Factors…………………………………………………………….19 Industry and Competitive Analysis ……………………………………..….21 Summary of External Factors …………………………………………73

D. Internal Factors…………………………………………………………….77 Financial Analysis…………………………………………………… 105 Management’s Personal Ambitions, Philosophies, and Ethics………... 117 Company Culture…………………………………………………………….. 118 Summary of Internal Factors………………………………………….. 120

E. Strategies……………………………………………………………………… 125 Generic Strategy…………………………………………………………….. 125 Strategy to Gain Maintain Competitive Advantage………………………….. 126 Matching Strategy…………………………………………………………….. 127 Summary of the Strategies …………………………………………….…….. 130

F. Recommendation and Implementation / Evaluation and Control …...…………….. 134

Appendix A (Consolidated Financial Statement)………………………………….. 143

Appendix B (SWOT Matrix)……………………………………………………………. 152

Appendix C (Responses to Panel)…………………………………………………… 155 A. Executive Summary

Mission and Vision
Objectives
(short and long term; financial and strategic)
External
Opportunities and Threats
Internal
Strengths and Weaknesses
Recommendations (include the pros and cons of each recommendation) Corporate, Business, Functional, Departmental
Cannondale Corporation mission statement is:
 “To be the best cycling company in the world” . Their mission inspired ten principles and on of them is “Stay lean, remain competitive and entrepreneurial” 1 To fulfill their missions they enter the motorcycle industry recently.

 Cannondale Vision is “making the best cycling and off-road motorsports company in the world” 2. Strategic objectives
Short term:
Achieve 15% share of the off-road motorcycle US market by year 2002. Lower the operation cost in manufacturing by 2% by 2001.
Quicker product design-to-market times by 15% in 2002.
Decrease the number of new product defect by 20% by 2002.
Deliver their products to the retail stores in 5 to 12 days from the order receive. Long term:
Become number one manufacturer and marketer of high-performance bicycle in the world by 2010. Reduce the number of defects to 1 on 10,000,000 bicycle by 2004 to 2009. Enter motorcycle European markets by 2005 and capture additional 10% of market share. Spend $1 million on marketing each year to get the strongest and most recognized brand name by 2005. Establish 50% more specialty retailers store in Australia and Europe by 2005. Financial objectives

Short term:
Achieve 20% annual revenue growth in the 2000.
Return to its profit margins of 6.2% from 1995 by the end of next year. Improve its MVA by 10% by the end of the next year.
Increase revenues from Europeans market by 34% by 2001.
Improve Assets turnover by 12% by 2001 to improve assets efficiency.  Long term:
Achieve annual sales growth of 30% through 2001 to 2005.
Reduce Debt/Equity by 23% by 2003 to maintain financial stability. Become one of the two best performing stocks in the bike industry by 2005. Reduce costs to achieve higher profit margins and increase ROE to 1991 levels of 17% by the end of 2004. Achieve profit margin of 12% by 2003

Opportunities
Faster then US growth of international markets.
Expend domestic market share.
Locate manufacturing plant in other countries with lower labor cost than in US. Societal values and lifestyles in which customers turning toward outdoor activities in their leisure time and...
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