Schwinn Bicycles.
I. Background:
A. The Environment
i. Social
The social environment of the company would be composed of people who are looking for a cheap adult bike although the company is trying to change it for people looking for high-end, high-tech bike who are willing to spend money to get a superior quality product.
ii. Economic
Historically, the company has been the biggest U.S. brand in its category with up to 25% market share. Nowadays, it has lost that position as market leader and scrapes a mere 5%.
Schwinn was recently sold to the Zell/Chilmark Investment fund, who is trying to turn it around by injecting new money and trying to reposition the brand from the low-end of the market to the high-end one.
The company has had to face a major downsizing (from 300 employees to 180) as well as having its headquarters changed from Chicago to Boulder.
iii. Political-Legal
- No known political-legal issues are mentioned in the case.
iv. Other
B. The Industry
i. Competitive Situation
Who are the main competitors?
Schwinn’s main competitors would be other high-end brands such as Trek, Cannondale, and Specialized.
What are their strengths and weaknesses?
Cannondale:
- Strengths:
Cutting edge technology in aluminum-frame bikes.
Bikes are handmade in the U.S.
- Weaknesses:
No known weaknesses are mentioned.
Trek:
- Strengths:
Cutting edge technology in carbon fiber-frame bikes.
Production is being moved back to the U.S.
- Weaknesses: