Mike's Bikes Simulation

Mike’s Bikes Simulation

Best Bikes was created by Gary McKnight, Leann Sanchez, and Kathryn DeBoer in the summer of 2014. We developed a mission statement that reads, “To produce quality bikes that give the consumer the best economic value for their money while maintaining an environmentally responsible company which will be a benefit to their communities.” This beginning strategy was focused on being steady for Share Holder Value and keeping the business moving in an upward swing.

Background

Best Bikes final Share Holder Value ended at $157.63 in 2023 with stock selling at $126.47. Dividends per share were at $24.60 and there was a cumulative change in SHV of 1071.1%. The retail sales were at $159M, wholesale sales at $75M with total economic value created at $99M with no debt. Best Bikes market share in 2023 was 35.5%.

Goals for Best Bikes included finding a niche that would allow us to provide bikes for individuals looking for our unique product. Best Bikes strived to provide the best quality bikes by investing in quality controls. Initially we started with the one bike we inherited, with a one bike in one segment company. According to our text “Strategic Management,” there are four factors that help a company to build and sustain competitive advantages that Best Bikes took into consideration. These would include superior efficiency, quality, innovation, and customer responsiveness. (Charles Hill, 2013)

Best Practices

Initially, we started with the one bike we inherited, the ADV2. The idea was to determine what the competition was doing and respond to that. Best Bikes wanted to utilize our cash flow and refrain from debt to launch our next round of bikes and this was possible with just staying in alignment with our company goals. The focus initially was on staying on target with customer demand and we eventually were able to develop a bike for every market.

Keeping a close eye on our manufacturing capacity usage and especially our idle time we ended with a 75% production efficiency in 2023, while this was a little low of our goal at 80% to 85% with an idle time goal of less than 3%. Ending with a breakdown time around 10% indicated that we would need to spend more on preventive maintenance. Overall , Best Bikes had become a little inefficient in the last few years which indicates the need to revamp factory processes.

Best Bikes keeps a close eye on its current status in its industry and this knowledge will allow it to remain competitive. This includes public awareness with advertising and marketing, product availability with distribution, inventory and delivery, and of course manufacturing. As stated in our text “Strategic Management,” managers who understand how the demand for a product is affected by the changing needs of customers can focus on developing new strategies