Trek Bicycle

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The Exception 1

Finding the Exception
Sarah Norton
Cardinal Stritch University
MGT 405
December 15, 2012

The Exception 2

Finding the Exception

“I remember riding my bike to school every day and seeing those two men working on their bicycles in their garage, little did I know that they would be the founders of the Trek Bicycle Corporation.” My mother told this to me a few months back when we were reminiscing on the good ol' days. Waterloo, one of the smallest towns I have ever been too, is home to the success of French history. Its Trek bicycles are now the Tour de France winning frames that brought Lance Armstrong his victories and brought the midwest its spotlight on making the first American bike frames to win the world's most prestigious bicycle race. By 1984, Trek was at its peak and sales were around $20,000 with approximately fifty thousand Treks being sold in the United States (Burke, 2012). However “Trek had grown arrogant, and the problems were starting to show” (Burke, 2012). Within business success lies problems and for this company the early years presented many because Trek did not like the bicycle retailers that they were dealing with, they had no brand strategy, and they had no money to advertise

It seems that the most successful businesses start with the passion of at least one person. For Trek it was the vision of Richard Burke and Bevel Hogg. Burke was a former accountant that took interest in investments. Hogg was the owner of a Midwestern chain of bicycle stores. While Burke spent 15 years perfecting his business skills with Roth Corporation in Milwaukee, Wisconsin, Hogg was growing tired of the retail business while keeping his heart with bicycles. Burke had a passion for outdoor recreation which drove him toward the bicycle market. During a meeting between the two men in 1975 when they sought to solve the issue of foreign made product. Their main competitor at the time was Schwinn bu this company dominated the specialty retail market but their bikes were Japanese The Exception 3

made. Burke and Hogg wanted to sell American-made product for the same specialty. The company began as a five-person operation in a barn and is now a globally oriented company with distribution in 65 countries and over 1500 employees worldwide.

What made the Trek bicycle so unique? Their mission was and still is simple, build the best bikes in the world. The frame sets were handmade from steel. The style was adopted from a European brazing style with its own American flavor. Tim Issac, an early frame engineer, said that a Trek bicycle could be identified without any paint on it. The company was blessed with the right designers and tolling infrastructure to use exactly the right materials to create such unique frame sets. The company had successfully found a way to distinguish itself. “In order to succeed, you cannot just sell any brand; you need to produce something special” (Burke, 2012, p. 4). Once this is established it's time to settle on a distribution channel to ensure customers are being reached. At the time, Penn Cycle, outside of Minneapolis, Minnesota was Trek's dealer. What attracted this dealer to Trek was that not only did this bicycle manufacturer provide lightweight, advanced bicycles, but they were also made in the United States.

Market shares were quickly gaining from the Japanese and European competitors and the company was gaining dealers from Madison to San Francisco and sales had grown to over $1,000,000. After expanding the facility to allow for assembly lines and paint factories, reshaping the entire business, the company was able to hire its first true sales representatives and there in lies its customer service foundation. In 1981, sales doubles and again in 1982. In 1983, the company was already building additions to the factory. The business...
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