Mikes Bikes

Reaching out for a healthier, greener horizon.

Megan Zacarias

Chief Executive Officer

Karthik Ravichander

Chief Financial Officer

Lynn Lan

Chief Operating Officer

Heather Collins Chief Marketing Officer

Laura Calderone Chief Information Officer

Executive Officers

Infinite Horizon 2008 - 2018

• Planning• Execution• Problems• Reevaluation• Future Plans

Mission Statement

To produce bicycles that are readily available to a wide range of consumers while

benefitting the environment and surrounding communities.

Planning

• Success strategy– Product– Price– Promotion– Distribution

• Finances• Vision for the company

DistributionEfficiencyAdvertisingSavingsFun Times

BUT WE FAILED

Execution and Problems

• Overall• Financial Management• Product and Firm Marketing• Operations Management

2008 – 2018 Performance

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180

2

4

6

8

10

12

14

16

18

0

2000000

4000000

6000000

8000000

10000000

12000000

14000000

16000000

18000000

Shareholder Value Profit Margin Revenues

Shar

ehol

der V

alue

($),

Profi

t Mar

gin

(%)

Who

lesa

le S

ales

Rev

enue

($)

Market Comparison

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180

5

10

15

20

25

30

35

40

Infinite Horizon Market Average

Shar

ehol

der V

alue

($)

Financial Management

• Debt– Repayment in 2011– Positive and Negative consequences

• Equity– Infinite Horizon as a private company– Repurchasing from 2008 - 2017– Repurchasing in 2018

Debt Management

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180.00

0.05

0.10

0.15

0.20

0.25

0

2

4

6

8

10

12

14

16

18

Debt to Asset Ratio Shareholder Value

Deb

t to

Ass

et R

atio

Shar

ehol

der V

alue

($)

Product Marketing

• Internal Debate: How low is low priced?• Price Jumps– Fireburst increased $15 in 2014– Adv4 increased $10 in 2015

• Phoenix intended as higher priced youth bike

Pricing

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018445

450

455

460

465

470

475

17000

19000

21000

23000

25000

27000

29000

31000

33000

Adv4 Mountain Bike

Price Sales

Pric

e ($

)

Sale

s (u

nits

)

Product Marketing

• Initial splash in advertising– Gain market advantage

• 2013: Edited and reallocated expenditures– Budget remained constant

• Effect on sales• Heavy burden

Advertising

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

10000

20000

30000

40000

50000

60000

70000

80000

Advertising Expenditure Sales

Adv

ertis

ing

Expe

ndit

ure

($)

Sale

s (u

nits

)

Product Marketing

• PR was first expense to be cut• Major drop every two years• Bare minimum for youth sector• Trial and error

Firm Marketing

• Effects of average retail margin– Adv4 Mountain Bikes– Fireburst and Phoenix

• Internal Debate: How heavily should we focus on margin?

• Distribution increased by increased margin

Distribution

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 201815

20

25

30

35

40

15000

17000

19000

21000

23000

25000

27000

29000

31000

33000

35000

Average Retailer Margin Adv4Fireburst Phoenix

Ave

rage

Ret

aile

r Mar

gin

Sale

s (u

nits

)

Firm Marketing

• Branding was lowest expenditure• Small decreases during first 6 years

maintained profit margin• 2015: increased after class discussion• Negligible effect

Operations Management

• Capacity– Low Price, High Volume

• Entering the Youth Bike Market• Problems we encountered

Capacity and Production

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180

10000

20000

30000

40000

50000

60000

70000

80000

90000

17000

22000

27000

32000

37000

Production Sales Capacity

Prod

uctio

n, S

ales

(uni

ts)

Capa

city

(SCU

)

Efficiency

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180

5

10

15

20

25

30

35

40

0

500000

1000000

1500000

2000000

2500000

Wastage Idle Efficiency Expenditure

Was

tage

, Idl

e (%

)

Effici

ency

Exp

endi

ture

($)

Quality Market Comparison

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20180.55

0.60

0.65

0.70

0.75

0.80

Infinite Horizon Market Average

Qua

lity

Inde

x

Reevaluation

• Quality• Debt Management• Pricing• Capacity• Branding

• …Quality

Future of Infinite Horizon

• Option 1• Option 2

Infinite Horizon 2008 - 2018

• Planning• Execution• Problems• Reevaluation• Future Plans