The business plan: who is the competition

The company competes with large and small manufacturers of performace racing bicycle frame sets that sell to the high end of the market through independent bike stores (IBS) and on line.  The company will have its work cut out competing with these companies given the size, resources and brand name recognition of its competitors. However, the company beleives that it will able to compete for the following reasons. First, the company is scaling out distribution by working with independent bike stores (IBS) using the agency model rather than the traditional distribution model. Second, the company scales out production to More Choice, Inc. in Taiwan (an eventually to others) which is able to provide quality carbon frames in much lower volumes and on shorter notice than the larger contract manufacturers. Third, the company provides frames to its IBS agents when the IBS agents have a customer who is ready to buy one rather than requiring distributors to take delivery of an inventory of built up bicycles months in advance. Finally, the company uses mass production techniques to create economies of scale in delivering the frames to its IBS agents and thus allows the IBS to implement measures that create economies of scale in assembly of the bikes.

In more simple terms, the company concentrates its resources on providing high quality road racing frames (not completely built up bicycles) to the "I want it right" market rather than competing in the "I want it now" market which is saturated and dominated by the big manufacturers. The company's business model allows the consumer to use the Internet to make choices and to place orders, but the company does not try to cut out the IBS. The company beleives that most consumers are still going to need the IBS for some services or they will want the community that is associated with the IBS; the company also beleives that the opinion of the IBS about a brand matters a lot. Additionally, the company beleives that it will be able to restore an old premium road frame brand for its frames which will differentiate the company from existing brands, complement the inventory of brands that the IBS offers and allow the company to introduce this new business model to the market. The company recognizes that it is not in a position to innovate frame technology and will leave that to the manufacturers in Asia who are clearly more skilled at such things. However, the company can innovate the processes of bicycle production, distribution and delivery in such a way that all parties benefit.