How Many Chances for Small Independent Bicycle Retailers?
HOW MANY CHANCES FOR SMALL INDEPENDENT BICYCLE RETAILERS?
Executive summary
The purpose of this report is to provide key findings of New Zealand’s current external business environment of small independent bicycle retailers. This was achieved through analyses of articles and reports about existing bike retailers industry. The report established New Zealand’s demand for bikes is currently high due to several benefits of cycling and the Government’s encourage. Findings also highlighted that there are difficulties for new retailers such as demographic problem, low marginal margin, or cash flow problem. It observed competition within bicycle retailers and the current market structure which changed to massive cutting price sales. However, bicycle retailers need to provide services and experience to customers instead of cutting price as it is not a sustainable strategy. Moreover, the end this report has some recommendations which could help people to decide whether they should open their own small independent bicycle shops and how they could help the shops work efficiently.
Introduction
This report was commissioned to assess the key aspects of the current external business environment for small independent bicycle retailers in New Zealand, in order to determine what are the advantages and difficulties for a business in this environment. The New Zealand bicycle industry is not very attractive due to high competition between rivals in the market and the large amount of substitute vehicles. However, New Zealand Government has taken many efforts to improve air quality and reduce CO2 emissions (Pestle Analysis, 2009). This is somehow encouraging citizens to prefer bicycles more than cars and motorbikes. Furthermore, factors such as improving health and fitness are creating a good chance for new retailers to enter the bicycle market. Nevertheless, demand for bicycle is currently high does not mean small independent retailers can sell their bikes easily. High buyer’s power
Executive summary
The purpose of this report is to provide key findings of New Zealand’s current external business environment of small independent bicycle retailers. This was achieved through analyses of articles and reports about existing bike retailers industry. The report established New Zealand’s demand for bikes is currently high due to several benefits of cycling and the Government’s encourage. Findings also highlighted that there are difficulties for new retailers such as demographic problem, low marginal margin, or cash flow problem. It observed competition within bicycle retailers and the current market structure which changed to massive cutting price sales. However, bicycle retailers need to provide services and experience to customers instead of cutting price as it is not a sustainable strategy. Moreover, the end this report has some recommendations which could help people to decide whether they should open their own small independent bicycle shops and how they could help the shops work efficiently.
Introduction
This report was commissioned to assess the key aspects of the current external business environment for small independent bicycle retailers in New Zealand, in order to determine what are the advantages and difficulties for a business in this environment. The New Zealand bicycle industry is not very attractive due to high competition between rivals in the market and the large amount of substitute vehicles. However, New Zealand Government has taken many efforts to improve air quality and reduce CO2 emissions (Pestle Analysis, 2009). This is somehow encouraging citizens to prefer bicycles more than cars and motorbikes. Furthermore, factors such as improving health and fitness are creating a good chance for new retailers to enter the bicycle market. Nevertheless, demand for bicycle is currently high does not mean small independent retailers can sell their bikes easily. High buyer’s power
References: database by typing “Bike retailers” This source talked about the difficulty of opening a bicycle shop in U.S. It contained the costs of starting a bicycle retailer business and the core problems the business will face. The source was published in 1998, it talked about U.S bicycle market. However, it greatly illustrated information which relevant to all bicycle retailers in general. The information about problems such as cashflow, low marginal margin, and difficulty in buying stock are useful. This source also stated that bicycle should not cutting price to compete with other because this strategy is danger and not sustainable for the business. Its helped improve the strength of this report. There are good information in the article of what people should do to make the business easier like purchase an existing business or find a good location. However, some information were not very relevant to New Zealand industry therefore they were not used in this report. Overall, this source is quite useful as it helped the report to generally determine difficulties and some recommendations for small 8 How many chances for small independent bicycle retailers? independent bicycle retailers.