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Introduction to Dirt Bikes
Dirt Bikes USA is a small company headquartered in Carbondale Colorado that
manufactures and sells its own brand of off-road motorcycles. It was founded in 1993 to
product dirt bikes that could be customized for racing and off-road recreational riding
using the best quality components and parts from all over the world. The company has
findings. Many projects recommend you use electronic presentation software, if
possible, to summarize your findings for management. Each assignment will list the
software tools that you will need to use and the questions you will need to answer.
In order to complete your assignments, you should familiarize yourself with Dirt Bikes.
To learn more about the company and how it works, review each of these topics in this
Chapter 2 Assignment: Analyzing Financial Performance [Data File: Dirt Bikes
Financial Data]
Chapter 3 Assignment: Analyzing Competitive Strategy
Chapter 4 Assignment: Developing a Web Site Privacy Policy
Chapter 5 Assignment: Improving Decision Making: Making the Rent vs. Buy Decision
Strategy
Chapter 11 Assignment: Achieving Operational Excellence: Identifying Opportunities
for Knowledge Management
Chapter 12 Assignment: Improving Decision Making: Analyzing the Impact of
Component Price Changes [Data File: MIS13Ch12 Bill of Materials]
Chapter 13 Assignment: Achieving Operational Excellence: Designing an Employee
Company History and Background
Dirt Bikes USA was founded in 1994 by Carl Schmidt and Steven McFadden, two young
but experienced bikers with engineering backgrounds who saw that dirt bikes were
becoming very popular in the United States as both sporting and racing motorcycles.
They developed frames for dirt bikes that were more suited to off-road handling and
started using these frames to build their own dirt bike models using motorcycle engines
manufactured by other companies, such as Honda and Rotax Motors of Austria. Riding
on one of their customized dirt bikes, Steven finished first in the famous Barstow to Las
Organization Chart and Employees
Dirt Bikes USA is still privately owned with Carl serving as CEO and Steven as
President and Chief Operating Officer. About 120 employees work in design,
engineering and production, including 3 full-time product designers and 3 engineers. In
addition to a 4-person Parts department, Dirt Bikes maintains a ten-person service
department to service warranties and customer problems with parts and motorcycle
Products and Services
Dirt Bikes’ founders realized that the most popular dirt bikes were foreign brands and
wanted to capitalize on their proximity to the dirt bikes racing circuit and market in the
Moto 450. The two Enduros are endurance racers, while the Motos are for motocross
racing. All four are very modern, with such technology as both kick and electric starters,
steering stabilizers, and liquid cooling. The large majority of these bikes are sold in the
United States for between $3,250 and $9000 retail. (The Enduro 250 retails for $3250,
Sales and Marketing
Dirt Bikes does not sell directly to retail customers, relying on a network of 40
distributors concentrated in the Western and Midwestern United States. A small
percentage of Dirt Bikes are sold in Europe using independent distributors that sell other
brands of dirt bikes and motorcycles as well as Dirt Bikes. Dirt Bikes’ motorcycles,
nearest authorized Dirt Bikes dealer, the customer can purchase a Dirt Bike or Dirt Bike
parts through a certified independent motorcycle dealer. Retail customers can purchase
spare parts directly from Dirt Bikes only by verifying that they live more than 50 miles
from an authorized Dirt Bikes dealer.
Dirt Bikes’ sales department works closely with Dirt Bikes’ distributors. One of its key
responsibilities is to aggressively promote Dirt Bikes at dirt bike racing and other events.
Many Dirt Bikes employees are dirt bike racing enthusiasts themselves. Several are
Selected Financial Data
The data file Dirt Bikes Financial Data provides a spreadsheet with three worksheets
containing Dirt Bikes financial data for you to review:
• Income statement and summary balance sheet data from 2010-2012
• Annual sales of each Dirt Bikes model between 2008 and 2012
• Total domestic vs. international motorcycle sales between 2008 and 2012
margins are calculated by dividing net profit (or loss) by revenues (or sales).
A balance sheet provides a snapshot of a company’s financial assets and liabilities
on a given date, usually the close of an accounting period. It lists what material and
intangible assets the business owns and what money the business owes either to its
creditors (liabilities) or to its owners (shareholders’ equity, also known as net worth).
and balance sheet data, pay special attention to the company’s three-year trends in
revenue (sales), costs of goods sold, gross margins, operating expenses, and net income
(or loss). Pay attention to whether the company’s short and long-term liabilities are
growing and whether they exceed assets. If a company has more current assets than
current liabilities, it is a sign that it probably has enough working capital to fund
