Lb160 Tma01 Essay

314 Words2 Pages
In 2008, Brompton Bicycle forecasts to sell 19,000 bicycles, achieving £7m sales revenue and a pre-tax profit of £925,000. Managing Director Butler-Adams is conscious they have to increase sales to stay competitive in the expanding and hugely potential bicycle market. “One competitor made 350,000 bicycles while Brompton 19,000” he said. Capacity and slow production are issues. Brompton is not making enough bikes to meet demand and is losing market share in a 20% to 25% growing market a year. Butler-Adams wants to boost production to 50,000 bikes a year, changing shifts system and benefit from a £1m production revamp. He is aware their investment could be threatened by a competitor with similar quality but lower prices. They have the best folding bike but competitors are getting better and Brompton must take advantage of the opportunity to move forward and its uniqueness product. Despite bike design being covered by copyright, Brompton patent has expired eight years ago and wage structure is high compared with Taiwan where 80% of bikes are made. Skilled labour is in short supply and they have to train and develop staff skills, increasing costs, but they are reluctant to relocate from the area from where their name born. Where Brompton is competitive is their refined manufacturing process, an investment made over last 20 years. They also reduced costs by outsourcing non-core elements and retain skilled engineering at Brentford base. Attention to detail is Brompton main characteristic and cannot become obsessed by growing and lose quality or undermine the brand, losing its appeal. Overseas sales is where Brompton wants to grow. To increase sales, Butler-Adams wants a structured approach to marketing. Instead of relying only in the word of mouth of their 150,000 worldwide enthusiasts, Butler-Adams wants to promote their distribution, routes to
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