Week 3 seminar
Strategic process and strategic analysis
(Baldwin bicycle company case)
a. On the basis of Michael Porter’s (1980) competitive strategies, how does Baldwin currently compete? Justify your answer. In this case, Baldwin currently competes on differentiation strategy. Baldwin had been making bicycles for almost 40 years and there are ten models in the company’s line. The company only focuses on making bicycles ranging from a small beginner’s model with training wheels to a deluxe 12 speeds adult’s model. It creates own products and own services in the market. Furthermore, most of Baldwin’s sales were through specialty bicycle shops and never sale its products through department store chain such as Rebel Sport, K-Mart etc. on the other hands, Ms. Leister who is market director of Baldwin Bicycle Company make known that the products of Baldwin are above average in quality and price, but not a “top of the line” product. Therefore, I believe that Baldwin Bicycle Company competes on differentiation strategy. b. If Baldwin took up Hi-Value’s offer, how might this change the way Baldwin competes? In particular, think about the effect on Baldwin’s costs and distribution channels (i.e. the retailers) If Baldwin took up hi-Value’s offer, this will change the way Baldwin competes to market focus strategy as Hi-Value wanted to sell its Challenger bicycles (produced by Baldwin) at lower price than the well-known brand-name it carried. That means that Baldwin begins to focus the market which under average and price. Also, it is possible for Baldwin to change the strategy to cost leadership strategy since sales volume fall in the past two way and it is the way for them to develop technology for some products to reduce the cost and increase sales volume. The on-time added cost will be increased around $5,000 when Ms. Leister accepts all the requirements (i.e. The mud-guards, seats, and handlebars need to be somewhere different to...
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