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Financial And Other Problems Faced By Cyclermate Bicycle Manufacturers.

Extracts from this document...

Introduction

EXECUTIVE SUMMARY Cyclermate is bicycle manufacturing company established in late 1988 in United Kingdom. The firm was set up by Lewis Llewellyn and Dai Armstrong, the two close friends in a local cycle touring club. As the prospects for continued local employment were poor, they decided to use their savings to set up a bicycle manufacturing business – an obvious choice, given their shared interest, and combined expertise. Business/Product The product that the company selected was a “traditional” upright cycle, following a design typical of the 1940’s and 1950’s. They believed that there would be a strong “niche” market for such a product, given the upsurge in interest in cycling, and increasing consumer interest in “retro” styles. The market The company defines their market as traditional bicycle. The total market size was approximately £1.28b in 2009 and is expected to grow by 28% in 2010. Cyclermate’s total revenue was £1.6 m – a very small amount in 2009. However, the product they selected was a “traditional” upright cycle, following a design typical of the 1940’s and 1950’s which created a strong niche market for this such product and would be given the upsurge in interest in cycling and the increasing consumer interest in “retro” styles. Competition Cyclermate compete directly with other bicycle manufacturing company in the UK like Carrera, Charter Lea.. and alternatives to their product include electric bicycle. The high quality hand- made bikes brought them good reputation and maintained high sales though they did not advertise much. Risk/Opportunity The greatest risks associated with company today are facing is their bad credits toward the bank. In 2010, the business is in trouble, the demand keeps going down despite the price reduction. The biggest recognized opportunities for the company include the product they selected was a “traditional” upright cycle, following a design typical of the 1940’s and 1950’s which created a strong niche market for this such product and there would be a strong growth in their business because of the decrease in the number of people using cars in UK. ...read more.

Middle

The opportunity created from the meeting between Amstrong and Owen helps him to have some expertise in new technologies that might be an interesting way to develop product. The upcoming changes in human resource, followed by Mr Jones who interjected that the quality problems could probably all be solved if the directors would allow the employment of more staffs in the factory and the plans for future directions, including development of the product range, and the introduction of new ways of working, new materials and possible outsourcing of manufacture parts of the product manufacture point out the new development of their business. * Threats It can be seen that the biggest trouble Cyclermate is facing is their bad credits toward the bank. In 2010, the business is in trouble, the demand keeps going down despite the price reduction. This significant decrease in sales together with the increase in costs may last for the coming year. Therefore, Cyclermate?s overdraft is now becoming the major concern of the bank manager. So far, it is not easy for them to borrow money and this cause a lot of problem especially when they really need money to save their business. Besides, they also need to deal with their sales. Their customers demand high quality products and to meet this, they have to upgrade their producing system which will cost a lot. But, as the fact that they almost depend on their world-of-mouth reputation so it may be completely strange and challenging for them at first. 2.4. SOLUTIONS FOR CYLERMATE?S SITUATION 1. MANUFACTURING PROCEDURE AND IMPROVEMENTS 2.4.1.1 Improper workforce in manufacturing Unreasonable workforce division is one of the most serious problems of Cyclermate Ltd. Besides, lack of experienced employees and the aging workforce are worrying the production process and raising a big question for a more effective training system. First of all, the inappropriate division of duties obviously had made such a burden on many workers. ...read more.

Conclusion

Cyclermate will use newspapers, internet and radio to promote their product across the world. Company is planning to launch their website which will have all the detail about them and their product. Cyclermate will also be trading on line, and it will have all the detail about their product and prices. 1. CONCLUSION To improve the quality is should adopt proper methods of quality management which will possibly help in reducing the costs and increase the quality of the products. The products with low quality should not be brought in the market as once the reputation of the company goes down due to poor quality issues its very difficult for it to get over it. Cyclermate should appoint right person at the right position. As of now management is also involving in the production of the goods as a result of which they are losing focus on the managerial activities. Financial difficulties at the moment can be just resolved with immediate cash which can be only done through mortgaging assets and selling the lying stock in the warehouse. To be up to the standards of the competitors the cyclermate needs to produce cheap products at higher quality and for that it needs to revise its budget and take necessary cost cutting measures and quality management measures. Costs should be allocated appropriately, i.e. there should be proper budgeting. The company should introduce batch manufacturing of products, i.e. relating a group of components at a workstation before moving the group to the next step in production. Overall I think that Cyclermate will have a better future if they operate their business in slightly different ways. Cyclermate products were famous for its quality and price, if the company still provide what the consumer wants than it would be no harm to the company. But there few changes needs to be changed and once the new rules and regulation apply into the business than it would be a great opportunity for Cyclermate to operate their services. ...read more.

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