Group Members: Mumtaz Ahmed
Zainullah
Hesab Magsi
Waseem Suleman
Sumreen Kasi
Summiya Lunni
Strategic Management
Cannondale Bicycle Company
IQRA UNIVERSITY
Cannondale Foundation or History
Cannondale Corporation was established in 1971. The company initially produced a
bicycle trailer. Today Cannondale’s most popular product is the mountain bike.
Cannondale has expanded its product line to include over 71 models of bicycles and has
become one of the leading bicycles manufacturers in the world. Although the company’s
main activity is manufacturing and distributing bicycles accessories and equipment. The
founder of the company’s “Joe Montgomery”
Strategic Posture
Mission
Cannondale’s mission is to be the best cycling and off-road motor sports company in the
world. The focus is on people – employees, customers, retailers, and vendors – working
to accomplish the mission. The philosophy of Cannondale states:
1. We care about each other, our customers, our retailers and our vendors.
2. We produce a stream of quality innovative products.
3. We devise a flexible manufacturing process that lets us to deliver those innovative,
quality products to the market quickly and then back them with excellent customer
service.
4. We limit our distribution to the best specialty retailers in the world.
5. We stay lean, remain competitive and entrepreneurial.
6. We put 90% of our profits back into the company to underwrite future growth; the
balance we share with all of our employees.
7. We promote from within whenever possible.
8. We concentrate on detail, because the last 5% is often the difference between
success and failure.
9. We continuously improve everything.
10. We govern our every deed by what is ‘just and right’.
The mission statement and philosophy of Cannondale are rather broad. Nearly every
company in existence wants to be the best. Cannondale’s mission statement could easily
be applied to manufacturers in other industries by changing a few words, just as easily as
it is applied to Cannondale. One problem with the mission statement is it does not set a
clear direction of where Cannondale is heading in the future. Cannondale recently made
their company more diverse by adding dirt bikes and ATV to its product line. The vision
does not expand on how the company is going to pursue this market or how to become
the best.
Strategies
Marketing Strategy
The growth rate of the bicycle industry in the United States is currently 2%. Cannondale
recognizes that the same opportunities do not exist that were once enjoyed in the US
market because of today’s slow rate of growth. The company has now globalized its
operation and has moved into other markets throughout the world. In Europe, cycling is
the second most popular sport behind soccer and offers the opportunity to increase the
company’s growth. The company has established subsidiaries in Europe, Japan and
Australia to become a major player in the world market of bicycles. Cannondale bikes
are sold today in over 60 international markets.
One of the marketing tools of Cannondale is its partnership with Volvo to create
the Volvo/Cannondale Mountain Bike Racing Team. The championships won by this
team have given the company a prestigious presence in the mountain bike market.
Cannondale has also used magazines as a way to promote its bicycles. The company
typically advertises in cycling magazines, along with general magazines that are intended
to reach
Competitive Strategy
Today, there are over a billion bicycles throughout the world used for a variety of
purposes. In many countries, bikes are a primary means of transportation. Today, 70% of
bicycles are used for transportation, 29% for recreation and 1% for racing. Cannondale’s
competitive strategy is the focused differentiation strategy. A focused differentiation
strategy is aimed at a niche group of customers with unique tastes. The bikes produced by
Cannondale are targeted towards the high-end market niche of the bicycle market such as
professional bike racers or the serious mountain bikers. The price of a Cannondale bike
ranges from $500 to $4,000. Cannondale tries to produce bikes that are lighter, stronger,
faster and more comfortable than its competition.
In the United States, there are two primary outlets used for selling bikes, retail
stores and bicycle specialty shops. Specialty stores offer high quality bikes, ranging in
price from a few hundred dollars into the thousands. Most specialty stores have trained
salesmen and offer repairs to bikes. Retail stores, on the other hand, offer lesser quality
bikes, with fewer features and little or no support to the customer. The bikes sold through
retail stores are starting to incorporate some of the past innovations that come with high
end bikes. While the lower end bikes are incorporating features such as shocks on their
bike, they are not of the same quality of those found in specialty shops. Thirty percent of
all bikes sold in the US are from these specialty shops. Cannondale only sells its bikes
through these specialty stores. The company selectively chooses the specialty stores to
carry their bikes, and Cannondale use these specialty shops to give its bicycles the
perception of superior quality.
Cannondale differentiates their bicycles by adding additional features that aren’t
available on other bikes. One primary means of differentiating its bikes is through its
research and development department. The company continually develops and adds new
features that the customer values. Cannondale’s rise in popularity came as a result of
offering the first aluminum frame mountain bike to the market. Over the years,
