Chapter 1Management Overview of Dirt Bikes
Introduction of Dirt Bikes
Dirt Bikes USA, a small company headquartered in Carbondalewas founded in 1991 by Car Schmidt and Steven McFadden, two young but experienced bikers with engineering backgrounds who saw that dirt bikes were becoming very popular in the Unites States as both sporting and racing motorcycles. In the early time, they developed frames for dirt bikes that were more suited to off-road handling and used it as a model to build their own dirt bikes models by using motorcycle engines manufactured by other companies, such as Honda and Rotax Motors of Austria. When Steven got the first place in a race, other peoples began to very interested in their products. Both young men realized that they had an opportunity to enter into dirt Bikes market. They opened a small production facility in Carbondale which has since expanded to house 120 works involved in production, designand engineering and a corporate sales and administrative staff of close to 20 employees.
As experienced racers, they understand that the quality is the life of products. They have made a goal as the market leader to supply the best dirt bikes by using the best components.
From the beginning, the company gathered some experienced and enthusiasm young bikers. Same interest created a warmly and friendly family working environment, encouraging teamwork, attention to detail and quality, and continual learning and innovation.
Products and Services
Dirt Bikes always focus on the quality of its products. They design the frame by themselves and fit it with the best parts from the world. Over the years, they have extended their products from racing to off-road recreational use. Currently, Dirt bikes can supply four models:See Figure 1.1
Table 1.1 PPRODUCTS SUPPLIED FROM DIRT BILKES USA
MODEL PRICE(US$) APPLICATION FEATURE
Enduro 250 3250 Cross-country racing kick and electric starters,
Enduro 550 7600 Cross-country racing steering stabilizers,
Moto 300 4295 motocross racing in an liquid cooling
Moto 450 8995 enclosed dirt course
Sales and Marketing
Dirt Bikes does not directly sell to retail customers. It relies on a network of 40 distributors concentrated in the Western and Midwestern United States. A small percentage of Dirt Bikes are sold in Europe by independent distributors. If a potential customer lives more than 50 miles from nearest authorized Dirt Bikes dealer, the customer can purchase a Dirt Bike or parts through a certified independent motorcycle dealer. Retail customers can purchase spare parts directly from Dirt Bikes only by verifying that they live more than 50 miles from an authorized Dirt Bikes dealer.
One of Dirt Bikes sales department responsibilities is to aggressively promote Dirt Bikes at dirt bike racing and other events, except close cooperating with their distributors. Dirt Bikes uses a small public relation firm to place articles about new products and the company' story in the magazines.
Figure 1.2 Organization Chart
Dirt Bikes USA, owned by Carl as CEO and Steven as COO, use "flat" organization structure to manage its business. There are 3 managers in production, administration and sales & marketing departments. Totally, there are 10 employees working in administration, like controller, accountant, administration assistant, human resource, secretaries and information systems specialists. Others work in manufacturing department. (See Figure 1.2)
Situation in Dirt Bikes
In 2002, Dirt Bikes faced losing profit to 1,444,000 US$ (See Figure 1.3). The problem is caused by dropping sales revenue and increasing in operating expense. This situation has lasted for two years. Sales revenue decreased from 2001 to 2002, either domestic or international. Especially, international sales declined 14.39% in 2002.(See Figure 1.4 and 1.5)
Figure1.3 shows Gross Margin and Net Margin in Dirt Bikes...