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
SHV Comparison
$120.00
$100.00
Shareholder Value
•
$80.00
$60.00
Whistler Bikes
$40.00
East Coast Rims
$20.00
$0.00
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
Profit after Tax
$14,000,000
$12,000,000
$10,000,000
Dollars
•
$8,000,000
$6,000,000
$4,000,000
$2,000,000
$0
Whistler Bikes
East Coast Rims
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
$1000's
Year
Sales
Net
Income
Net
Income
Growth
% of
Sales
Year
Sales
Cogs
% of
sales
2018
37218
2017
31911
2016
25394
2015
18184
2014
9293
2013
8370
2012
7782
2011
7150
11904
7852
3421
1436
2107
1783
1413
985
51.60% 129.52% 138.23% -31.85%
18.17%
26.19%
43.45%
31.98%
24.61%
13.47%
7.90%
22.67%
21.30%
18.16%
13.78%
2018
37218
15279
2017
31911
15654
2016
25394
13007
2015
18184
11442
2014
9293
4339
2013
8370
3842
2012
7782
3824
2011
7150
3820
41.05%
49.06%
51.22%
62.92%
46.69%
45.90%
49.14%
53.43%
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
Overall Sales
Future Sales
140000
Bike Sales
120000
Bike Sales
100000
80000
60000
40000
20000
0
2017
2018
2019
2020
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
Ad4
Quickshifta
Digimonsta
2017
26000
7500
52112
2018
25588
7400
64000
2019
30274
8434
78672
2020
32418
8814
88112
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