| APNL Cycles: Marketing Plan Ashley Villanueva, Latisha Walker, Patricia Williams, Nadia Waseem MKT-607-0500: Marketing Management Dr. Maisoun Kawwaff November 11th, 2020 |
Executive Summary
Through the first three quarters, we were able to learn about our ability to perform in the market. From Q1 to Q3, we increased our net operating cash flow by an exponential amount for a new small business. Additionally, we were able to hire additional salespeople while keeping costs reasonable. Over the last three quarters, we have compiled an equity worth 1.9 million dollars. To continue to grow at this rate or an even faster rate, we as a company will need to invest in additional marketing, R&D projects, and keep our reputation through the community positive by addressing concerns that were found from our surveys.
Review of Company
Overall Strategy:
Our strategy as a company has been to focus on quality and offer options for all types of riders. We want to be able to target a healthy portion of the cyclist market. Overall strategies for the company are to provide quality products and improve operation and performance to achieve elevated levels of reliability and efficiency. We surveyed our staff to address areas and issues that needed attention, and a solution to solve the problem. Based on the results, there are four areas of deficiencies of operations as follows:
- Environmental Concern
- Quality Control
- Employee Involvement
- Production Efficiency
We decide to invest setup cost, an expansion cost, and an operating cost to take action to fix capacity, operation capacity, and employee satisfaction to start the quality improvement process with the Human Resource Department. These improvements are categorized by the Potential Impact on Reliability, Potential Impact on Morale, Cost to Operate, and Operation and Invested. The total investment of $538,688 in the four areas of deficiencies. For environmental, worker training, quality control, supplier relations, and health concerns, we decided to focus on three areas, as follows:
- To retrofit production facility with a system to collect, store, and dispose of all chemicals, Separate employees from chemicals with respirators, protective clothing, and gloves,
- Create a “clean room” production facility by controlling the airflow with a super clean, reverse-flow, air ventilation, and filtration system.
- Separate employees from chemicals with respirators, protective clothing, and gloves.
- Schedule time for department planning with coworkers and supervisors.
- Train operators to detect errors and adjust machines so they produce within tolerance.
- Work with suppliers to launch and maintain their quality improvement programs.
- Setup and run a health clinic that includes general practitioners plus a few specialists for the immediate families of employees.
Based on this improvement, we hope to see the result soon, and each quarter we will continue to inspect to enhance reliability and morale.
Financial Performance
As a new company, we had somewhat of a rough start. Due to the needed startup investment, a lot of our cashflow went into operations and investing in our products. However, from our first quarter to now, we have drastically changed things around. Our gross profit margin has increased tremendously just like our net profit margin. We have maintained a leveled debt ratio because we have used all our own cash to support operations and any other expenses. Although we have also seen an increase in our costs of goods sold, we have also increased our revenues. Our earnings per share continue to increase as well. All these increases are a testament of our rapid growth and ability to manage our assets successfully to penetrate the market. We have managed to successfully turn things around into a positive slope all around, however, as a business it is time to look forward to innovation and invest in the future.
Market Performance
APNL cycles have been performing very well especially when comparing the outcome of quarter 1 results vs. the outcome of quarter 3. In two quarters, we were able to increase our net income by over $170,000. Additionally, we were ranked as the number one brand for both recreation and speed bicycle designs as well as for recreation and mountain ad copies. Our product reviews were acceptable however, with the proposed strategy revisions we will be able to increase our product review exponentially.
SWOT Analysis
| S Strengths | W Weaknesses | O Opportunities | T Threats |
| All APNL brand products are highly rated (either in first or 2nd place). We do not lose sales due to ‘stock-outs’. Our price is comparable to competitors. Our marketing efforts are proving to be effective. | Sales can improve exponentially, although we are doing much better than we were in Q1, we are still at a -2 earnings per share. Our cash balance is not enough to fund desired R&D projects. | We can still improve our brand to be ranked higher than acceptable. We can invest in research and development to put ourselves ahead of competitors. We still can expand outside the United States. Since our bike is number one when compared to competitors, we should take a good portion of their sales. | If we were to expand to other locations, our competitors are already established there. Cyclosis and Aero Bike Hub are already manufacturing similar bicycles with similar price points – if they invest in R&D, they can quickly surpass us in the rankings. |
Proposed Strategy Revisions
Currently as a business, we are researching new products that can help us attract a niche market. Due to the current economic situation, bike riding has become a hobby that many are partaking in. We hope to rapidly put something into manufacturing that will allow us to take advantage of this expanded market. We need to focus on a product or features that will be both attractive to the veteran bike rider as well as novice. One product that we can add to our product line is bike racks. Any experienced biker as well as a novice will need a bike rack. An easy to use but durable bike rack that can transport their specialized bicycle as well as a standard bicycle. Our next venture should focus on researching and developing the next best bike rack. This will allow us to take advantage of the new consumers as well as penetrating the existing market of experienced cyclists.
Another area of focus should be our bicycles. We need to make sure the styles and models we produce fit perfectly into the ideal bike rack. We need to be the one stop shop for bicycles and bike racks. We could look into bundle deals to get our product out there. Let our consumers and their social media be our marketing strategy. Offering a discount for bundling both products will also promote sales. All of this will help us grow and expand.
After studying reports of the consultants regarding deficiencies and opportunities facing our company, we’ve decided to create a series of system improvements that will create a higher standing for us among customers, employees, suppliers, stockholders, and the community. One area of system improvement that will help ups amongst specifically our employees will be to invest in a study to improve operations. Through our study, we learned that many of the workers and the community are worried about the effect of the production facility on the community and even their own health. Focusing on a study will show that we care about our community and it will also keep our employees healthy thus, able to be more efficient while employed with APNL cycles.
Through the last few quarters, no company or brand has been able to achieve any higher than an ‘acceptable’ rating on their product. In order to achieve a higher than acceptable rating, we will need to invest in some research and development projects. To really take the bicycling market to the next level, I propose we should invest in the research and development of Puncture resistant slime in tires, full suspension, and a carbon fiber material for the frames. Bike riders will typically carry around extra tires/tubes on their rides just in case they puncture their tires. If they do not carry around these extra parts on their ride, they risk having to walk their bike back to their destination. If we were to invest in the research and development of these tires, we will be able to give our riders a peace of mind while riding and save them money on replacement tubes and tires. This, however, is something we can not do with our current resources and we will need additional funding from a third-party lender or investor.
An additional proposed strategy revision we would pursue in the next quarter would be to begin utilizing paid search engine marketing. Paid search engine marketing can be very valuable, if utilized correctly. A good rule of thumb would be to first establish our firm’s identity through media and organic web marketing. We have invested in Market Research and we are performing at an ’Acceptable’ rating – which is the highest rating that we’ve received in the industry, and it is the highest rating that anyone has received when considering the brand reviews. If we were to invest in paid internet marketing and social media, it would increase exposure to the company and it would also increase our sales – hopefully getting us to a point where we have to create more bicycles as a means of supplying the demand.
Conclusion
In summation, we will need to work on several things to ensure the growth of our company. As discussed, we will need to take the information from the first three quarters to improve our brand, reputation, and overall strategy. If we are successful – we will be able to ensure a great product for our consumers, happy employees, and a profitable organization. We will need help from a third-party to fund these plans for the future. This investment will help us grow into the leading company in our industry.
References
Sisodia, R., Henry, T., &Eckschmidt, T. (2018). Conscious Capitalism Field Guide: Tools for Transforming Your Organization. Harvard Business Press.
Schwerin, David A. Conscious capitalism. Routledge, 2012.
Coates, B. E. (2015). The increasingly visible hand of government behind corporate citizenship & conscious capitalism. Journal of Business Theory and Practice, 3(1), 27-52.