Case Analysis
On the basis of Michael Porter’s (1980) competitive strategies, how does Baldwin currently compete? Justify your answer.
According to Michael Porter’s (1980) competitive strategies, it can be seen that Baldwin competes on differentiation strategy. As we know the differentiation strategy is an integrated set of action designed to produce or deliver goods or services that customers perceive as being different in ways that are important to them. It is said in this case Baldwin has almost forty years history in making bicycles. Especially, there are 10 models included in company’s line, ranging from a small beginner’s model with training wheels to a deluxe 12 speed adult’s model, which means that Baldwin has different types of bicycles for different customers. Moreover, most of Baldwin’s sales were through speciality bicycle shops. Baldwin had never before distributed its products through department store chains of any type (e.g. Rebel Sports, K-Mart etc). It also mentioned that the marketing director, Ms. Leister, felt that Baldwin bicycles had the image of being above in quality and price, but not a “top of the line” product. All of these show that Baldwin has created its own successful brand and products in the market. Thus, Baldwin Bicycle Company competes on differentiation strategy.
a. If Baldwin took up Hi-Valu’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).
In my opinion, if Baldwin took up Hi-Valu’s offer, it will make Baldwin change the way which it competes to market focus strategy. First of all, as it is mentioned in this case, Hi-Valu wanted to sell its Challenger bicycles at lower prices than the well-known brand name bicycles it carried (e.g. Trek). This behavior will push Baldwin to focus the market which under average price.
Secondly, because the “bicycle boom” had flattened out, and this plus a poor economy had caused Baldwin’s sales
According to Michael Porter’s (1980) competitive strategies, it can be seen that Baldwin competes on differentiation strategy. As we know the differentiation strategy is an integrated set of action designed to produce or deliver goods or services that customers perceive as being different in ways that are important to them. It is said in this case Baldwin has almost forty years history in making bicycles. Especially, there are 10 models included in company’s line, ranging from a small beginner’s model with training wheels to a deluxe 12 speed adult’s model, which means that Baldwin has different types of bicycles for different customers. Moreover, most of Baldwin’s sales were through speciality bicycle shops. Baldwin had never before distributed its products through department store chains of any type (e.g. Rebel Sports, K-Mart etc). It also mentioned that the marketing director, Ms. Leister, felt that Baldwin bicycles had the image of being above in quality and price, but not a “top of the line” product. All of these show that Baldwin has created its own successful brand and products in the market. Thus, Baldwin Bicycle Company competes on differentiation strategy.
a. If Baldwin took up Hi-Valu’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).
In my opinion, if Baldwin took up Hi-Valu’s offer, it will make Baldwin change the way which it competes to market focus strategy. First of all, as it is mentioned in this case, Hi-Valu wanted to sell its Challenger bicycles at lower prices than the well-known brand name bicycles it carried (e.g. Trek). This behavior will push Baldwin to focus the market which under average price.
Secondly, because the “bicycle boom” had flattened out, and this plus a poor economy had caused Baldwin’s sales