Schwinn Case Study

A. Environment

“For decades, the Schwinn brand, synonymous with durability, ruled the road,” (Donnelly & Peter, 2011, p. 521) but that is where they fell short. The bicycle market has changed in the last few decades, and is no longer ruled by the leisure riders who enjoy the paved road, but instead prefer to take their ride to the woods and mountains. This trend began in the late 70’s and early 80’s, but went unnoticed by Schwinn until it was too late; two-thirds of bicycles sold were mountain bikes and none of those sales belonged to Schwinn (p. 521).

Today, the market is dominated by companies such as Trek, Cannondale, and Specialized, comprising nearly 50% of the market share. These companies focus on the current trends of mountain bikes with padded seats, upright handlebars, fat tires, and more gears for climbing (p. 521), they are up to date and high tech; a perfect fit for the tech savvy generation. Other trends that could affect the market that Schwinn operates, is the recent advent of “going green.” Since the environment that Schwinn is based out of (Boulder, Colo.) is a young, hip, and trendy area, this could be a big reason why people will be looking to purchase a bicycle, and even more so a mountain bike, because they do after all live in the Colorado mountains.

B. Industry

The industry that Schwinn Bicycles operates in is a consumer good that can range from low end to high end in regards to cost. The major competitors in this market are Trek Bicycle, Specialized Bicycle Components, and Cannondale (p.520). BicycleRetailer.com points out that although the thought is that the “big three” (Trek, Giant, & Specialized) comprise the lion’s share of the U.S. bicycle market, that is incorrect (2012). In 2012, there were 143 active bike brands in the United States. Although Trek, Giant, and Specialized are recognized as the top three brands