The business plan: market saturation

Frame and Wheel takes the view that the market is saturated with carbon racing road frames. If you type in carbon road frame into eBay, you find thousands of new, generic carbon road frames listed for $300 per frame, the excess inventory of distributors of Asian manufacturers, no doubt. Not many of these frames are selling primarily because they are generic (they have no brand) and they are old designs. Additionally, the consumer has no idea what they are getting; it all looks very dodgy. Add to that the thousands of branded carbon road frames that are being pumped out each day by the big manufacturers and pushed out into the market through the IBS distribution channel. The market is clearly awash in carbon and it makes one wonder where all of the old carbon frames go once people are done with them (Indeed, Frame and Wheel has a recycling program just for this purpose).

Frame and Wheel takes a less scientific approach to determining market saturation. Everyone at the races in New England is on a carbon road frame. Frame and Wheel's primary competitors at the races are on the following frames: Trek, Giant, Cannondale, Ridley, Specialized, Cervelo, Scott, Fuji and Look. However, Frame and Wheel rarely sees classic brands such as Bianchi, Pinarello, Raleigh, Eddy Merckx, Colnago and DeRosa. Although these brands are certainly there, they are not ridden by the riders who are usually at the front. This suggests that the more competitive riders are riding newer brands and the less serious riders are on older more classic brands. Frame and Wheel beleives that the market is saturated with carbon road frames brands from the big three (Trek, Specialized and Giant) and the newer brands, but less so with the classic brands. On this basis, there is room in the market for a cross over classic brand that is brought to market using a scaled out production and distribution network, a demand pull model and mass production techniques for sophisticated services. 

Frame and Wheel notes that the market is devoid of any classic brands from Northern Continental Europe. This is probably a function of this local market. A riding friend who lives in London mentions that the club rides are full of Italian brands (Colnago, Pinarello, etc) and that many bikes are set up using Campagnolo. It has been a long time since Frame and Wheel has seen a bicycle in New England set up with Campagnolo. Interestingly enough, a rider in Maine described to Frame And Wheel his preference for Campagnolo components and the lack of choice in the local market. This rider had just purchased an Italian frame on line too. He is a model example of the cyclist consumer today.