1. What activities at Dirt Bikes create the most value?
The most valuable activities include inbound activities (primarily supply chain
management but also including locating appropriate, high quality parts anywhere
in the world)), manufacturing (which is mostly assembling the proper materials
that come from elsewhere, but also include the testing of each product as it comes
off the assembly line), marketing (including some advertising, its racing
commitment and accompanying publicity, coverage in appropriate journals, and
an attractive and helpful Web site), sales (both ordering systems and systems
support for its dealers), and service (again, support for its dealers, plus availability
of parts and service information for owners who are too far away from dealers).
2. How does Dirt Bikes provide value to its customers?
The value Dirt Bikes’ customers receive comes from the quality of the bikes, their
off-road and racing performance, effective and valuable user groups, and
available servicing when needed.
3. What other companies are Dirt Bikes’ major competitors? How do their products
compare in price to those of Dirt Bikes? What are some of the product features
they emphasize?
Dirt Bikes models and prices are: The Enduro 250 retails for $3250, the Enduro
550 retails for $7600, the Moto 300 retails for $4295 and the Moto 450 retails for
$8995.
ATK USA has been successful in its racing and is making a name for itself. It
emphasizes its racing history and the owner organizations it supports. It also
emphasizes its specialty bikes, such as those build for police. It has a reputation
for innovation and is very competitive in racing.. Its two-stroke Enduro price is
$4,995 to $5,695 while its four-stroke model is priced at $3,295. Other models
are priced over $8,000. It would be a direct competitor to Dirt Bikes.
The major foreign competitors are Japanese: Honda, Kawasaki. Suzuki, and
Yamaha. Honda is a major Japanese producer of various types of motorcycles,
including motocross and off-road dirt bikes. The pricing of its motocross and offroad motorcycles bikes range from about $1,200 (for off-road bikes for children)
to $6500. It is a major competitor on price and number of models offered,
although Dirt Bikes products are being marketed and sold as American. The
question is how well Honda competes with Dirt Bikes on performance and
styling.
Kawasaki is another major Japanese competitor, and this company produces offroad and motocross bikes. Its motocross minibikes begin at a price as low as
$2,300 (for young beginners) to about $5,000. Its off-road bikes range in price
from $1100 for youth-size bikes to around $5500. Kawaski is a major competitor
to Dirt Bikes on price and number of models offered. It would become an even
more serious competitor if Dirt Bikes does not continue to emphasize its
American brand name, styling, and quality.
Yamaha off-road bikes range in price from $1200 to $6500 for off-road bikes and
$2900 to $6400 for motocross. Suzuki motocross bikes range in price from $2300
to $6000 and its dual sport/dirt model prices range from $1700 to $5000. Both
companies would be serious competitors to Dirt Bikes on price.
Husqvarna is a European dirt bike manufacturer but has not made a major impact
on the American market. It would not be a strong competitor for those who want
to purchase an American product.
4. What are the competitive forces that can affect the industry?
The industry could be affected by changing economic conditions and
demographics, which could depress the market for dirt bikes and put more
emphasis on competing on the basis of cost. Young populations in Japan, USA,
and Europe who make up most of the customers for dirt bikes are declining
(although many baby-boomers and retirees are flocking to Harley Davidson and
other brands for highway cruising.) The market for dirt bikes worldwide is not
very big and there are already many competitors, so Dirt Bikes is not likely to see
competition from new entrants into the market. The ability to use the Internet to
search worldwide for suppliers could help Dirt Bikes keep its supplier costs in
line.
5. What competitive strategy should Dirt Bikes pursue?
Students will differ in their answers to this question. Like all motorcycle
manufacturers, Dirt Bikes will try to keep its costs down, but it clearly is not a
low-cost producer. It is, however a company that emphasizes the uniqueness and
quality of its product. Through better marketing, contact with customers and use
of Web and demographic data, it could also do more by focusing on market niche.
6. What information systems best support that strategy?
If students believe Dirt Bikes could benefit from a strategy emphasizing product
differentiation and finely-tuned marketing to target dirt bikes enthusiasts, then
computer-aided design systems, systems for promoting quality, customer relationship
management systems, and other systems for marketing and customer service would
be appropriate.