1. BAD AS BIKES Selah Manley Nikki Reilly Sara Sutton 201005574 201006070 201006245

2. Bad as Bikes Company Overview and Strategy  Financial Results: Sales: $27,131,525 Units sold of Mountain Bike: 33,480 Units sold of Road Bike: 8,663 Profit (after tax): $5,372,328 Share Holder Value: $49.91  Costs: Cost of Mountain Bike(Adv1) : $620 Cost of Road Bike (Bolt): $1,750 (released 2014) Cost of goods sold: $11,701,415 Overall Strategy: - High Price, Moderate Volume - Emphasis on quality for Bolt Road Bike - Focus production primarily on Mountain Bikes

3. Financial Analysis  Reduce debt (abolished all debt by 2016)  Large amount of dividends issued, cents per share is now $7.39  Will maintain pricing between 280-300 cents per share for upcoming years  420% increase to $49.91 in SHV in 2017  From 2015 to 2016, wholesale sales increased 29.4%.  From 2016 to 2017 Sales increased another 23.3%.  Profit after tax increased by 19.8% ($5,372,328 in 2017)  Cost of Goods Sold (%) steady decrease

4. Marketing Strategy Branding  Increased product branding expenditure from $500,000 to $900,000 Distribution  Distribution in Sport Stores: 0.20 to 0.32  Distribution in Bikes Shops: 0.66 to 0.52 Advertising/Public Relations  Advertising Expenditure = $3.35 million  Public Relation Expenditure = $2.25 million  Public Relation Rating = 0.16 for Mountain Bike 0.48 for Road Bike  Awareness Rating = 0.34 for Mountain 0.27 for Road

5. Operations Strategy Quality, Sales & Retail Pricing  Quality rating averaged 0.80 over past three years (with.81 in 2017)  Road Bike Industry for 2017: sold approx. 1,000 units less than Wheelin’ & Peelin’ still managing to top their retail sales by more than $6,000,000. Inventory  4,154 Bikes left in inventory at the end of year 2017. Capacity  Increased capacity to 40,000 in 2017, bumping capacity up 15,000 bikes Wastage and Idle Time  Wastage = 40% for Mountian Bike 46% for Road Bike  Lower than both major competitors Buckle’$ Bike$ and Wheelin’ & Peelin’  Current idle time is 0%, tied with Buckle’$ Bike$ for lowest in the industry.

6. SWOT Analysis of Bad as Bikes Strengths  High Quality Rating  High Distribution in Road Bikes  Secure in the high price/high quality road bike niche Weaknesses  High Wastage  Poor Projections leading to excess inventory.  Poor Forecasting within Bad as Bikes

7. SWOT Analysis of Bad as Bikes Opportunities  Potential to launch into Youth Bike Market  Unmet demand for low price youth bike  Potential for more sales in mountain & youth  Buckle’$ Bike$ decreasing quality could lead to potential to steal sales in road bikes Threats  Loss of sales to competition  Buckle’$ Bike$ successful youth bike product launch resulted in high unit sales  Elite is well established in the youth bike industry with an extremely high distribution level  Bad as Bikes distribution is extremely low for Discount Stores (margin % = 20%).

8. Positioning Chart

9. Future Objectives  Launch of Youth Bike  Maintaining High Expenditure on Quality & Efficiency  Branding, Advertising & Distribution Spending  Increase Market Share  Maintaining low D/E, driving SHV

10. Recommendations Launch of Youth Bike  Create a strong presence with high spending in advertising  Produce an initially more expensive model with a lower SCU number  Price aggressively low  An emphasis on advertising Maintaining High Expenditure on Quality & Efficiency  Maintain a quality rating above.81  Increase capacity  Stay current

11. Conclusion of Analysis

12. Question and Answer Period