California Choppers

California Choppers

Manufacturing Company

Marketing Analysis

California Choppers is a manufacturing company, which produces high-end motorcycles for old and wealthy people. Currently company is expending on the U.S. market and plans to enter European and Chinese markets after gaining sufficient market share in the U.S. Expansion and therefore increased demand on the product increases sales. Product is mainly sold via internet. High-end and expensive motorcycles are luxury products and sales are dependant on the state of economy; e.g. in times of depression not too many people will be willing to pay so much money in order to acquire motorcycle. So, the sales of the company are cyclical. Product is being advertised through a program called TV show and this helps the company to become popular among teenagers as well.

Operations Analysis

In 2001 company decided to hire new CFO. She started the expansion of the company. To follow the growth, company needed some investments in fixed assets. That caused the main changes in the operations mainly in 2001. In 2004 and 2005 company continued growth and invested in new corporate headquarters building and new facility that caused short-term decrease of profitability and efficiency of the company.

According to my computations, California Choppers is a profitable company. Gross Profit Margin and Net Profit Margin seems to be quite attractive. If we look at GPM, we will see that since the year 2000 it was growing, but in 2004 it slowly and slightly went down. The decrease is the effect of new investments in fixed assets. The highest GPM was in 2002