Frame and Wheel can not compete directly with any of the existing manufacturers and does not plan to. These companies have established brand names and loyal customers, comprehensive national and global distribution networks, huge factories that create massive economies of scale, deep resources and huge marketing budgets. They also compete in the low, middle and high end of the market: they try to be all things to all consumers. Additionally, Frame and Wheel will be hard pressed to compete with the smaller boutique manufacturers and the custom frame shops: these companies have track records and bikes that are already on the road.
Frame and Wheel can compete because it does not have to follow the existing rules of distribution, pricing and production that characterize the bicycle industry today. For example, instead of requiring an independent bicycle store (IBS) to become a dealer and then stuff them with inventory at the end of each year, the company can use the agency model and allow the IBS to purchase frames when there is demand. Alternatively, the company can sell frames directly to consumers and then have the frames shipped to the consumer or to the consumer's favorite local bike store. Or, the company can use ebay to auction the frames to consumers without requiring the consumer to sacrifice the benefits of warranty or crash replacement programs while simultaneously rewarding consumers for purchasing their frames during the off season. In simple terms, the company is not beholden to the existing business model and can adopt the strategies and policies that benefit the consumer and the IBS. The industry is ripe a change.
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