EAST COAST
RIMS
J I L L I A N G E D D E S , A U S T I N C A R T E R , C A R Y K O N O P K A , B A I L E Y
P E N N E Y
Rolling in all
Weather
OVER VIEW OF RESULTS
• East Coast Rims serves as a bike retailer with a high price, large awareness and high quality rating.
• Results for 2018• Sales of $37,218,240 (increase of 16.6%)• 25,588 units sold (Decrease of 1.58% in mountain bike industry) • Highest units sold in road and youth bikes• Costs of $15,279,437 (decrease of 2.39%)• A profit of $11,904,440 (increase of 51.6%)• Shareholder value of $110.88 (increase of 86%)• Earnings per share of $16.15
• East Coast Rims market strategy involved high price, and high awareness
• East Coast Rims is in direct competition with Whistler Bikes.
A STATEMENT OF THE FIRMS STRATEGY
• East Coast Rims road and mountain bikes are high quality, high price bikes.
• Youth bikes are low price, high quality and quantity
• East Coast Rims shareholder value $110.88 and EPS of $16.15
• In direct competition with Whistler Bikes who has a shareholder value of $102.42
2011
2012
2013
2014
2015
2016
2017
2018
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
SHV Comparison
Whistler BikesEast Coast Rims
Share
hold
er
Valu
e
FIRMS FINANCIAL RESULTS
• East Coast Rims had Wholesale sales of 37,218,240• Mountain bike sales of 25,588 • Road bike sales of 7,400• Youth bike sales of 64,000
• 2018 COGS of $15,279,437 with a decrease in costs of 2.45% from 2017-2018
• 2018 profits of $11,904,440 seeing a 52% increase from 2017
2011
2013
2015
2017
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
Profit after Tax
Whistler BikesEast Coast Rims
Dollars
FINANCIAL ANALYSIS • Average sales growth 29%
• Ability to reduce cost of production-management COGS 41% compared to IA 56%
• Profitability, highlight 2015 capital spending
• Return on sales
• 5 year EPS growth 70.8%
• Cash position
• Financing
• P/E 6.04, 7.88
• PEG .085 Year 2018 2017 2016 2015 2014 2013 2012 2011
Sales 37218 31911 25394 18184 9293 8370 7782 7150
Cogs 15279 15654 13007 11442 4339 3842 3824 3820
% of sales 41.05% 49.06% 51.22% 62.92% 46.69% 45.90% 49.14% 53.43%
$1000'sYear 2018 2017 2016 2015 2014 2013 2012 2011Sales 37218 31911 25394 18184 9293 8370 7782 7150Net Income
11904 7852 3421 1436 2107 1783 1413 985
Net Income Growth 51.60%
129.52%
138.23% -31.85% 18.17% 26.19% 43.45%
% of Sales
31.98% 24.61% 13.47% 7.90% 22.67% 21.30% 18.16% 13.78%
MARKETING ANALYSIS• Marketing = branding, public relations and advertising
• Branded as high quality high price
• Match target for each dimension of marketing
• Aimed above target youth and road bike market because of high price sensitivity
• Youth bike market high price high quality vastly under producing, then making the executive decision to drop price and increase production
• Youth bike market, awareness rating of.33 , slightly higher than the recommended
• Distribution rating of .54 in the road bike market compared to the .51 of whistler
• East Coast Rims highly effective and efficient marketing = dominating all markets
• Posting the highest total sales in all markets since 2015
OPERATIONS ANALYSIS
• Decrease in COGS by 16%, giving East Coast Rims a COGS percentage of 41.1%. • 15.9% lower than the industry average
• Highest capacity in the industry, due to the demand for our products. With 46,000 standard capacity units.
• Quality rating of 0.83, the highest within the industry.
• High wastage of 21%, due to the large amount of capacity.
• Working at full capacity, creating no idle time.
SWOT ANALYSIS
Strengths
• Efficient and effective marketing strategy
• Generate sales $.13/$1 of sales, Whistler Bikes $.193/$1
• COGS
• Distribution strategy
• Ability to anticipate competitor’s decisions
• Financial management
SWOT ANALYSIS
Weaknesses
• Underproduction causing loss of:• Youth bike sales: 42.3%, 22.7%, 3%• Road bike sales: 14.1% 8.9% 4.5%
• Future distribution
Opportunities
• Cash position of competitors and profitability of competitors
• Rest of youth bike market
• Product Improve
SWOT ANALYSIS
Threats
• Whistler Bike’s COGS and marketing strategy
• New bike launch by competition
RECOMMENDATIONS FOR THE FUTURE
• Increase average retailer margin• Bike shops: 40%• Sport stores: 35%• Discount stores: 35%
• Capitalize on all markets• 16% in youth bike market• 21% in road bike market• 7% in mountain bike market
• Increase capacity for expected future demand
• Maintain dividend, and quality index
RECOMMENDATIONS FOR THE FUTURE• Wholesale sales increase of 21% in 2019
• Supply of sales to bike market by 2020• 23% in mountain bike• 44% in road bike• 59% in youth bike
2017 2018 2019 20200
20000
40000
60000
80000
100000
120000
140000
Overall Sales
Bik
e S
ale
s
2017 2018 2019 2020
Ad4 26000 25588 30274 32418
Quickshifta 7500 7400 8434 8814
Digimonsta 52112 64000 78672 88112
10000
30000
50000
70000
90000
Future Sales
Bik
e S
ale
s
CONCLUSION• Consistent high sales, driven by high awareness, high price
• Highest SHV $110.88
• Highest Earnings per share $16.150
• Lowest COGS in 2018
• Biggest threats include direct competitor Whistler Bikes, very close SHV with a similar price and product strategy but lower quality, distribution, and wholesales.
• Be future oriented in order to ensure that East Coast Rims remains a successful company