Case Study—Baldwin Bicycles
ACCG330 Case Study—Baldwin Bicycles
a On the basis of Jordan Porter's(1980) competitive strategies, how can Baldwin at present compete? Rationalize your answer. (25%)
From the article it seemed that Baldwin Bike Company competed somewhere between an expense leader and a differentiator. Baldwin have been a bicycle manufacturer for nearly four decades. The article illustrated that Baldwin Bicycle had the image to be above average in quality in cost, meaning to talk about that it was not really low cost rival. Besides, Baldwin had never before given away its products through department store organizations of K-Mart, which is popular for its reduced price. However , no obvious facts showed that Baldwin got targeted a certain market part as a differentiator. To begin with, the organization seemed aiming to attract every range of customers—its product line included 10 types which targeted from little beginners' style with schooling wheels into a deluxe doze speed adult's model. Furthermore, over a long term operation, Baldwin Bicycle appeared not made any excellent competitive edge that could be recognized by consumers to be apart from its rivals, such as company loyalty, customer satisfaction, product feathers or technology. Above all, Baldwin Bicycle had not clarified the strategic orientation currently.
b If Baldwin took up Hi-Valu's offer, how might this change the way Baldwin competes? Especially, think about the effect on Baldwin's costs and division channels(i. e. the retailers). (45%)
If accepting the offer, Baldwin's strategy might be restructured a lot more like a cost-leader. Before drawing a draft cost research, several presumptions should be considered. a) Selling price should remain steady.
b) Variable and fixed costs should continue to be constant. Direct material and labor costs remained a similar in the current selection, and no idle time allowed. c) Estimation of that Hi-Value would buy 25. 000 units and Baldwin could lose 3 thousands units must be...
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