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A Tale Of Three Wheels In The Bicycle Industry

778 words - 4 pages

A Tale of Three Wheels in the Bicycle Industry

Pacific Cycle
Chris Hornung, the founder and the first CEO of Pacific Cycle grabs a lion’s share of the U.S. bicycle markets. In 2005, around 19.8 millions of bicycle were sold in U.S. the total retail value of bikes, parts, and accessories were more than $6 billion.

There are basically hundreds of bicycle manufacturers in U.S., but they are small specialized firm. Pacific Cycle is interested in high-volume business. Pacific Cycle designs, markets, and distributes a full range of bikes brands such as GT, Schwinn, Mongoose, Roadmaster, etc. Its’ powerful brand portfolio serves virtually all demographics, price categories, and product ...view middle of the document...

Overall, the price of bikes has declined steadily, for around 15% per year. This decline has made it important for PC to control costs.

PC was recently acquired by Doral Inc. and now operate as independent SBU. It is one of the most prolific bicycle suppliers in the world, selling to more than 60 countries via more than 50 international distributors. In 2007, Jeff Frehner replaced Chris Hornung as President and CEO of PC, and will continue to build PC’s international business and strengthen its brand across the globe.

Pacific Cycle adopts the low-cost leadership strategic position as it is focused on lowering its’ cost (as well as price) and its’ scope of arena is broad.

Trek Bicycle
TB is founded in 1976 by Richard Burke and Bevill Hogg. From the beginning, they targeted upper-end users and success came quickly. Today, customers pay top dollar for smooth suspension, customized paint jobs, and innovations in racing geometry. With annual sales of about $400 million (almost the same with PC’s), Trek is now the country’s number one maker of high-quality bikes.

Although most of Trek’s growth has been fueled up by internally developed products, Trek has made a few strategic acquisitions, including Gary Fisher Mountain Bike and two mountain bike competitors in 1995: Bontrager and Klein. Trek now makes various types...

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