Schwinn bicycles - Case Study Example

?Case study Table of Contents Case study Table of Contents 2 Executive Summary 3 ment of Problem 3 Situation Analysis 3 SWOT Analysis 3 Strengths 3 Weakness 4 Opportunities 4 Threats 4 Analysis of Alternatives 5 Recommendations 6 References 7 Executive Summary Business environment is characterized by increased competition and high turbulence. The present study would analyze the case of Schwinn Bicycles with regards to its turnaround strategy. The study would essentially undertake a SWOT analysis to analyze the company areas of strengths, weakness and opportunities as well as suggest certain strategic alternatives to the company and frame a set of plausible recommendations for the organization. Statement of Problem The main area of concern with regards to Schwinn bicycles in the present study is to analyze the reasons for the decline of the company and the positioning issues of the brand and the product. Situation Analysis SWOT Analysis SWOT is an tool for analysing Strengths, Weakness, Opportunities and Threats of an organization (Dibb & Simkin, p.28). Strengths The main strength of the company lies in its large number of association with the industry segment. The company’s association with the industry dates back to more than a hundred years. Schwinn bicycles was once the market leader in the industry and has a an easy brand recall by the customers. The expertise of manufacturing and other operational aspects also constitute some of the other strngths of the company. A team of deidcated huamn resource base as well as a number of manufacturing units also serve as potential strngths of the company. Weakness The major areas of weakness of the company lies in its considerbly degrading market share and its outdated product line that finds very few takers in the market. In addition to this the issue lies with the poor positioning of the company as the customers find the brand and its products outdated and old fashioned that does not meet the expectations of the prospective sutomer segments. The internal organizational aspects like HR policy and the aspect of sourcing some of the products from Asian nations has also put questions over the aulity aspect of the company’s products. Opportunities Opportunities for the company exist in the mountain bike segment that has considerble demand in the market. In addition to this scope also exists for the company in unexplored and new markets wherte the company can leverage its association with the industry and its accrued experince to gain customer confidence that can reap benefits for the company. Opportunities also exists for the company in innovating its exiting product line that can help it to make its cash registers ringing and help maintain profitability and sustainability in the long run. Threats Schwinn Bicycles faces threats from its competitors in the market that of late have taken an edge over it in the market by virtue of greater innovation and newer product lines. The company also faces threats from the negative positioning and a poor image among the customers with the brand and its products. The constantly dwinndling market shares along with large number of debt obligations and the extensive levels of competition in the market serves as sources of considerable threats that can generate considerble issues for the organization. Analysis of Alternatives In the light of the issues surrounding the company, it has become imperative for the company to undertake strategic changes in its functioning that can help generate competitive advantage for the organization. Some of the strategic alternatives that can be considered by the company are stated below: One of the possible alternatives before Schwinn bicycles is a repositioning strategy. Repositioning involves changing the perception about a product or a brand in the minds of the target market audience. The repositioning strategy would involve focusing on innovation and needs of the customers and successfully communicating this change so as to change the perception of the brand and its product in the minds of the target market audience. The repositioning strategy would be aimed at creating a favorable image of the brand in the minds of the customers. In this regard the company could resort to manufacturing the bicycles especially the mountain bikes in USA itself as that would add value to the product and the brand. A new promotional campaign highlighting this change must be communicated to the target market audience so as to regain the customer confidence in the brand. A brand ambassador can also be chosen that would add value to the promotional strategies of the company. Another strategy for the company could be an international expansion strategy into emerging markets like some of the Asian markets. The industry is in a very nascent stage in these markets and has considerable opportunities for new market players. The company already has certain manufacturing units based in those regions and those could help in marking successful foray in those markets. The existing brand image and its experience of being associated with the industry for a long period would certainly help in reviving the fortunes of this organization. Out of the two strategies mentioned the repositioning strategy seems to the most appropriate as the company already has a presence in those markets, secondly the company also has a good brand recall in the US market that could help the company emerge successful in the market. The second option of expanding internationally involves considerable risks as entry and success into a new market involves a lot of factors. In addition the second option is also more costly as a lot of funds would be required for setting up international expansion. The credit crunch and unavailability of funds can also be a huge deadlock for the company making repositioning the best possible option for Schwinn bicycles. Recommendations The analysis of the case study shows that the company is in urgent need of new strategies. A repositioning strategy is the most viable option for the company in the present scenario. However this would require careful planning and execution along with a powerful and well knit integrated marketing communication plan that can help in generating a positive mindset of the consumers with regards to the company. Approaches like focus on innovation and improvement in product line would help the company revive itself and regain its lost position in the market and generate sustainability in the long run. References Dibb, S. & Simkin, L. Marketing Planning: A Workbook for Marketing Managers. Cengage Learning EMEA, 2008. Read More