It was founded in 1991 by Carl Schmidt and Steven McFadden, two young but experienced bikers with engineering backgrounds who saw that dirt bikes were becoming very popular in the United States as both sporting and racing motorcycles.
Goals and Culture
- Culture: Carl Schmidt and Steven McFadden founded dirt bikes USA. They noticed that Dirt bike was becoming popular in the United States. They were founded on a friendly, family type atmosphere, attention to detail and quality, and continual learning and innovation. With these values Dirt bikes has excelled to one of the top companies, competing with the likes of Honda, Yamaha, and Kawasaki.
- Goals: Dirt bikes goals are very ambitious, and if fulfilled will bring them to the top of the list. They want to improve on their services, and products, and innovate cutting edge technology that will hopefully propel them to the top. They want to increase sales in both the domestic and international market.
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Products and services:
Dirt Bikes does not sell directly to retail customers, relying on a network of 40 distributors concentrated in the Western and Midwestern United States. A small percentage of Dirt Bikes are sold in Europe using independent distributors that sell other brands of dirt bikes and motorcycles as well as Dirt Bikes. Dirt Bikes motorcycles, parts, and service, including warranty repairs, can only be obtained through an authorized Dirt Bikes dealer. All motorcycle and spare parts sales, shipping and set-up must be handled by a certified dealer. If a potential customer lives more than 50 miles from the nearest authorized Dirt Bikes dealer, the customer can purchase a Dirt Bike or Dirt Bike parts through a certified independent motorcycle dealer.
Retail customers can purchase spare parts directly from Dirt Bikes only by verifying that they live more than 50 miles from an authorized Dirt Bikes dealer. The engines for Dirt Bikes are Rotax engines from Austria and tires are from Dunlop, but many of their parts, such as shock absorbers, front wheel forks, exhaust pipes, and headlights, are from the United States. Dirt Bikes currently produces four models: the Enduro 250, the Enduro 550, the Moto 300 and the Moto 450. The two Enduros are endurance racers, while the Motos are for motocross racing. All four are very modern, with such technology as both kick and electric starters, steering stabilizers, and liquid cooling
Carl Schmidt is the CEO of Dirt Bikes USA and Steve McFadden serves as President and COO. The employees of this company are involved in the design, engineering and production aspects, and include 3 full-time designers, 3 full-time engineers, 4 full-time parts specialist, and a 10-employee service department. There is also a marketing manager whose job is to oversee 5 sales representatives. Overall, the company employs 120 people and has expanded greatly since the early 1990’s. The strengths of this organization is that production department is divided effectively in smaller parts, they can easily control the operations. However, the weaknesses of organization is moderately hierarchical & small, there are no separate managers for service, shipping & receiving, parts and design & engineering and manufacturing.
Information System Requirement And Financial Performance:
Dirt Bikes USA relies heavily on database software such as Microsoft Excel and Microsoft Access. This is to keep track of sales, inventory, and employee matters. The income statement, also called an operating statement or profit and loss statement, shows the income and expenses of a firm over a period of time, such as a year, a quarter, or a month. The gross profit represents the difference between the firm’s revenue (or sales) and the cost of goods sold. The gross margin is calculated by dividing gross profit by net sales. Revenue is not growing steadily, from 2005 to 20046 the revenue increases at rate of 4. 12%; from 2006 to 2007 the revenue decreases at rate of -6. 12%.
Cost of goods sold increases steadily from 2005 to 2007, while revenue just increases from 2005 to 2006, and decreases from 2006 to 2007. Gross margin and net margin decreases from 2005 to 2007 Operating expense increases from 2005 to 2007 A company has more current assets than current liabilities, firm has enough working capital to fund investments in new products and information systems. Firm has assets to pay for expenses and to finance the development of new products and information systems.
Analyzing Competetive Strategy value Chain Of Dirt Bike USA:
The company provides value to its customers by designing and manufacturing high quality custom motorcycles, and by servicing those motorcycles. Dirt Bikes choose top components from different famous suppliers around the world to make sure that each component of their product perform the best quality to customer. This activity make it become a unique spirited style for which company is noted. Moreover, all of Dirt Bikes’ product are warranty repaires, shipping and set-up must be handled by a certificate dealer, if the customers living within 50 miles from the nearset athoritized
Dirt Bike dealers, they can purchase a Dirt Bike or Dirt Bike parts through a certified independent motocycle dealer, and so forth. The fact showing Dirt Bike’s concentration on providing the best products and services to its customers is that the company’s parts and service department is responsible for 15% of the total revenue. Furthermore, the most significant evidence to prove that Dirt Bike has provided the best quality products can be seen in the numbers of races that this brand wins each year. Besides, focusing on diversity of products is also a reason create value for Dirt Bike in the high competitive market.
The company has produced many forms of racing dirt bike such as racing specifically for different size bikes, for short distances, long distances, and even for up to six days. Currently, Dirt Bike produces the highest value product is the Enduro 550, which is the top selling bike focused toward the dedicated beginner and semi-professional racer. By products lines that represent the needs and request of customers, Dirt Bike has gained the satisfation and trust from its customers. One of the most activities creating the most value for Dirt Bike is advertisement.
Most of its advertisement is at racing event or racing magazines. Although known as one of the supplier selling the highest quality to customer, Dirt Bike use a very competitive level of price to against others competitors. Other ways to provide value to customers are the policy of listening to customers’ feedback on how to improve the product, sharing their experiences and informing the newest products to them through Dirt Bikes USA Owner Group. In addtion to adding value to its products and customers, Dirt Bikes also have a professtional employees who communicate with customers and show up the high quality as well as the differences of Dirt Bike directly.
There are many company which produce and sell dirt bikes in the world. Among of such a huge competitors, Honda, Kawasaki, Suzuki and Yamaha represent as Dirt Bike’s primary competitors. Those companies are known for completely custom in-house design. Besdides that, they not only sell products but also the parts of their bikes,which allow them to expand theirs business and control the quality as well as the revenue of company. Furhermore, Having a large Expenditure budget on advertisement helps them build a significant image in customer’s trust, gain a strong loyalty with long-term customer, appear popular on other retailers’ websites. Four brands shoould have been consider as the “ big four” threaten Dirt Bikes USA.
- Slimmed -down fuel tanks
- Wide-ratio gearing
- Electric starting Suzuki Advantages:
- Loads of mid-range
Lightweight handling Yamaha Advantages:
- Lightweight frame
- Lightening- quick handling
- Smooth power delivery
Factors Influence Dirt Bike Industry:
- Internet: the fast development of Internet is always a good sign for society and all manufacturing process whole the world. However, it is also considered as a potential threat of any industry, not except dirt bike. The ease of access allows Dirt Bike as well as other competitors to search the information of lower price supplies, high quality but cheaper parts as well as labor or advance advertisement. There is the same source for all compaies, therefore, it is hard for Dirt Bike to make the differences from other exitsting competitors as well as new potential competitors who are going to step into this segment.
- Economy situtation: There is no exactly prediction about the world in the future, especially the current economy in Europe is not a optimistic view for Dirt Bike when its the largest market is almost in those Western countries. When there is a recession, people tent to reduce their demand in leisure activities; as a result, the revenue of dirt bike industry will steadily decrease.
- The policy of goverment: It can not deny the relationship between economy and politic. Lower tax on import goods and service as well as afforable tax income, so forth are factors can determine the supply and demand of dirt bike industry. When governemnt carry out the tighten policy, selling those products will get the big trouble.
- Taste of customer: Taste is also an important factors influent on dirt bike industy. It is very simple to see that switching hobby from using dirt bike to other vehicles will cause a headache for producer to motivate their customer to spend money on unnecessary procucts.
- Quality: When Dirt Bike came into this industry, it made a promise on providing high quality and services to its customerl; therefore, it must keep its promise as its competitive advantage against others rivals.
- New competitors: a market with many competitors will also cause some problems to existing company in dirt bike market. The organization as well as strategy will change along with behaviors of new enterprises.
The most suitable strategy that Dirt Bike USA should follow is Low-cost Leadership. As we know, it has 4 big competitors who make Dirt Bike have to apply the most attractive strategy to gain more loyalty, interest from customers as well as keep its market segment in long term. Others set the higher prices for their products as the claim on the quality. If Dirt Bike could produce such high quality products but sell at an attractive price, this competitive advantage would help Dirt Bike become unique in this industry.
Moreover, Dirt Bike should apply some methods to improve its business besides the Low-cost Leadership:
- Firstly, Dirt Bikes is known as one of the highest quality suppliers in the world. Its warranty on satifation of customer with Dirt Bikes’ products is its competitive advantage and it should continue to make use of this advantage to expand its business to others segment or others countries. It can do the same as other rivals by selling the parts to satisfy full demand of customers or expand its business to ATV or road motorcycles, which will help Dirt Bikes’ revenue as well as gain a better profit. Secondly, Dirt Bikes alsmot sell its products through its distributors. The information they keep is just information about those distributors not its customers. Another way to improve its business is develop its information system. Set up a large source of information about about all customers not only help Dirt Bike with managing customer profile more easily, spreading out needed information faster but also create a great bridge to build a long-term relationship with customer.
- Finally, it should spend more money and time in advertisement, especially E-commerce.
Its website should be redesigned to make customer as well as employees has a clearly look at all products it is selling. Providing more detail, technical information, comparision to others same line products. Those essential information has to be uploaded on the Website, beautiful and clear design to help customer more knowledgeable about products they would like to buy and support employees when they talk about products customers would like to know or they would like to sell. What is more, Dirt Bikes should invite famous riders to ride advertise for their products. This method will raise the trust in customer more.
Information Systems Would Be Suitable For The Chosen Strategy:
- CAD/CAM: technology allows engineer and draftspeople to design systems.
- Communication and collaboration systems: allows all employees to communicate effectively and efficiently via e-mail, voice mail, call center and others.
- Data warehouse: allows managers and knowlegde workers store huge amount of data that can be easily accessed and manipulated for decision support.
- Mobile computing systems: supports mobile employees who work with cusomer or business partners outside the physical boudaries of the organization.
- Supply Chain Management System: This system may allow the company to manage their inventory levels more efficiently.
Improving decision making:
Making the rent or buy decision for hardware and software a. Rent or purchase software. Thus, purchasing software is the best solution to deal with product's core competence forever-have guaranteed appreciation over a time period time-minimal IT staffs| Weaknesses| -limited time using-limitation on the software customization-uncomfortable when the software is out of date-frequent software updates-long term reliance on vendor support| -expensive cost-expense when alternative new software-limitation on software customization-incompatible with company needs-frequent software updates-long term reliance on vendor support|
If the company rent software, it can change into another software when the old one doesn’t fit company needs. The cost paid for rented software is cheaper than purchased software, so the cost for changing does not take much as well. Suppose the rented software is not out of date, the company also does not waste available resources as well as the money spending. Software is usually sold in a package. The company has to buy full package even though it may not use all the functions. Thus, the company will waste the big money for spending useless functions of the software which is going to be released.
Otherwise, the company has free management to deal with software’s core competencies forever. The company do not need to concern about time using as renting. That is uncomfortable when someday the software is out of date but the company still need to use it, the manager will have to sign a new contract for continuously using. That affects to company’s operations and waste time. Renting and purchasing need to be updated frequently to ensure that they always fits to company demands, hence both of them rely on vendor support in long term. Additionally, limitation on the software customization need to be considered as well.
The company rent or purchase any software, it just has authority to use this software for helping the business to run effectively. It is not allowed to transfer or copy into many versions to sell. However, minimal IT staffs is a strong point of both renting and purchasing. Software helps the company to handle well with a large information that human can not do although amount of staffs is large. c. Other factors need to be considered (beside cost):
- Duration of need (long term or short term) If the company want to use in short term (usually under 6 months), then renting is optimal solution. In contrast, purchasing will be the best solution if time using is over 6 months (long term)
- Compatibility Software run on iphone can not run on android. That is example about compatibility. Similarly, Microsoft 2010 can not run on window XP SP1, SP2, rather than they are window XP SP3, win 7 or later
- Friendly interface Software that is easy to use will increase efficiency for the company.
- Efficiency Microsoft 2007 is better than Microsoft 2003 because Microsoft 2007 has more functions than Microsoft 2003:colorful interface, beautiful templates.
- Furthermore, office 2007 can open XML files which are files of older office version…More functions are shown on ribbon. That helps users manipulate quickly.
- Supporting The software should provide support for common tools used for the volume digitization of paper documents and integration with other devices that generate digital documents such as fax servers.
Dirt Bikes USA does not sell its products directly to retail customers; however, these transactions are primarily made through its distributors’ network.
The information of a customer will be collected by the company’s distributors when this sale is made. This database is then forwarded to Dirt Bikes. Figure 1: Customer Database collected from distributors. Figure 1 shows the customers’ information that distributors forwarded to Dirt Bikes. This table includes many kinds of information: customer name, address (street, city, state, and zip code), telephone number, model purchased, date of purchase, distributor, customers’ interests and tastes (their ages, level of education, and favorite sport), and their attentions to racing events.
Storing all the information at only one place is so complicated and when it develops into thousand-record table, it is difficult to manage all information effectively. Moreover, it may take a lot of time to withdraw a piece of data as needed. To be able to market aggressively, therefore, the database needs to be redesigned. The new database will include tables and reports that allow the company to know certain information about the customers. The Marketing department would also like to be able to keep the customers updated on certain events, such as races and sales, depending on their ages, education level, and their previous purchases.
Using Microsoft Access program (version 2007), the database that we designed is very simple to use, yet very effective. From the main database (Figure 1), 3 sub-tables are adding and each table manages 1 kind of information withdrawing from the main data. Figure 2: Distributor table The table shows the list of distributors’ names and their IDs. Managing distributors’ information by their IDs can avoid confusions and help looking up this information easily and quickly. Figure 3: Model table This table shows the models of dirt bike that the company produces and sells in the market.
Each model is managed by 1 ID. Each record comprises Customer ID (the customer that made this transaction), Model ID (model ordered), date purchase of such transaction, and Distributor ID (distributor that made the transaction with the customer). Purchase ID is the primary key of the table. Figure 5: Relationship between 4 tables. This figure shows the relationship between 4 tables: Customer table (main table), Purchase table, Model table, and Distributor table.
Specifically, Customer ID is the primary key in Customer table and in Purchase Table; Customer ID is the foreign key. Model ID is primary key in Model table and the field with the same name in Purchase table is foreign key. Distributor ID in Distributor table is the primary key and is the foreign key in Purchase table. All these relationships above are in one-to-Many type because the primary keys of tables of Customer, Distributor, and Model can appear many times in Purchase table. It means that one customer can make many transactions with many distributors and buy many models as well.
Figure 6: Identify repeat customer by query. This table shows the way we design query to count the number of transactions that customers have made so far with source is Purchase table. Based on the result of this query, we can report frequent customers of Dirt Bikes USA. Besides knowing who are valuable customers that the company needs to take good care of, Marketing department can also recognize effective distributors to give them acknowledgements for their good jobs (rewards, bonus, etc. ). Additionally, more reports can be added to better suite the needs of the company. Several reports that may be of need to Dirt Bikes USA are Racing events report, which show customers are avid racers, as well as the ages of the customers. Below are some examples of the reports needed by the Marketing department of Dirt Bikes USA. Figure 8: Racing events.
This figure shows the way we made report of Racing events. The report shows customers that will attend racing events. This information is useful to Dirt Bikes USA because it enables the company to notify customers of when certain racers are being held. This way, the customers are aware of races and events that they are interested in attending or racing in. Figure 9: Customers’ ages, Education levels, and favorite sports This figure shows the way we design the report of Customers ‘Ages, Education Levels, and favorite sports. The report allows the Marketing department to see their customers’ tastes.
It can also help the company know which group of customers they are serving. From this information, Dirt Bikes USA can improve their performance in Customer services as well as improving its products’ designs and quality to fit customers’ interests.
Supply Chain Management Solution:
A supply chain is defined as a network of organizations and business processes for procuring materials, transforming raw materials into intermediate and finished products, and distributing the finished products to customers. Fulfilling orders on time is becoming increasingly harder for Dirt Bikes.
This is due to the delays of obtaining certain parts to the motorcycles, especially their fuel tanks. This is a serious issue because this could lead to loses in sales because customers do not want to wait so long for their orders to be filled. Finding a different fuel tank supplier is very necessary. In response to the supply chain problems that Dirt Bikes USA searched for alternate suppliers on the internet. The suitable choice is motosport. com. They have the cheapest price and their website guarantees 30 day price matching. The shipping is not only free but 2nd day by Federal Express. The motosport. com website also looks more professional, and has a contact page that shows a picture of their administration offices, and the address of their warehouse. It is possible that Dirt Bikes USA could be aided by implementing supply chain management software.
The figure below compares the features of The Logility Company’s Voyager Supply Planning software with Wolin Design Group’s da Vinci software. The suitable option is the da Vinci software. There are some reasons for this, first of all, the company does not require the purchase for all the components of the software; a company can choose to buy only certain applications. There are even add-ons to the standard software package. Before the company purchases the product, they are allows to do a demo with employees from Wolin Design Group.
If the company is not satisfied with the product, the company will not have to purchase the software. Once the demo is complete and the company purchases the software, the implementation process begins. There is a Help Desk that can answer any questions or fix any problems that may arise. The actual software package itself provides Dirt Bikes with great services. Da Vinci is a whole database where every part of the ordering, financing, and inventory side of the company can be kept. It allows tracking of the products and shipping aspects.
Inventory Management and other reports are easy to access because of the tracking. There are reports for the profit, revenue and costs of Dirt Bikes, as well as management reports. The reports help with the decision making and the everyday success of the company. The software also tries its best to minimize the cost of building the bikes and the all around costs in general. Voyager Supply Planning software is a great option, but da Vinci provides services that are more suitable for Dirt Bikes USA.
Internet is becoming more and more popular in modern life as well as in business. E-commerce is an useful application for seller and buyer to reach their willingness.. Almost everyone has a computer with internet connection. By having a website, Dirt Bikes would be able to expand its business better because it will reach out to many people. Customers will also find it more convenient to do their shopping online. The customers have more time for choosing products and the shopper has a chance to read about all the different kinds of bikes. It also enables them to compare bikes to one another, as well as see pictures of all of them. E-commerce allows the company to be more competitive.
Dirt Bike should sell not only motorcycle but also parts on the Web, the customers will have more option when looking its website. Advertisement about the new products, popular product on the front page of the website is also a good way to attract customer. Although there are many benefits from E-commerce, Dirt Bike has to face with risks that derive from online trading.
- Buyers from all over the world may use fake or stolen credit cards and online payment accounts or they outright lie about delivery. Many claim non-delivery or damaged goods in order to get refunds. This is turn makes it costly for sellers, as they are faced with the reality that now they have lost both their inventory and money.
- Sellers may take money without ever sending any product or forwarding inferior goods to the customers.
- When a company accepts a customer's credit card and personal data, unless the business takes measures to protect that information, data is easily stolen through hacking, making both the seller and the buyer vulnerable.
Solutions for better E-commerce strategy:
One e-commerce company that provides excellent services is NetSuite. It allows a small to medium company to be managed completely on this one software. Some of the services : website and web store building and hosting, built-in analytics and reporting, low-cost customer service, and superior e-commerce marketing tools. In order for the e-commerce software to be a profitable investment for Dirt Bikes, the cost savings need to increase. The increase should be more than the company has made in the past, and then some because of the cost of the e-commerce software.
- Managed Completely on on Software. Website and Web store building and hosting
- Built-in analytics and reporting
- Low-cost customer service
- Superior e-commerce marketing tools 5
The most important explicit knowledge of Dirt Bike USA assets are its engineering designs, its customer relations management, and its sales/marketing processes. This is the explicit and tacit knowledge, most of the knowledge can be documented. The engineer can graph his or her design and the customers or sellers can save their information in their documents.
There is also tacit knowledge, the designers have to think about the new ideas to refresh the products and attract people, the engineers have to think about the techniques to deal with employees and customers as well, they have to think the ways to increase the employees’ productivity, some tricks that can be used by the sellers to persuade the customers to buy their products. However, the knowledge assets of Dirt Bike is not only internal asset but also external assets. The Dirt Bike use outside engine manufacture so it has be knowledgeable about the engine products that are produced and developed by their engine suppliers.
The marketers also use outside media to know about the market trend, the customers interest to increase the investment from outsiders to expand the company. Knowledge management system is the system that would contain as much information as possible that can be documented and organized, from raw data to data studies. The system brings many benefits for employees and company itself. The engineers can use the data from this system for the correct engine designs and knowing whether the engine products from the suppliers are qualified are or not. The designers can use the data and get the materials for the products.
The marketers can use external and internal data for making marketing plan and getting investment. The sellers can use the data for market segmentation, and determine the time for selling suitable kind of product. The managers can know the information quickly to update about the new plan, new economics trend to have better react. Finally, the company can get the products’ feedback from customers, make the survey about the customers’ interest. With many benefits from the Knowledge management system Dirt Bike need to use it but the problem here is how can they find he Knowledge management system company that suitable for them? The appropriate knowledge management system for Dirt Bike is Safeharbor (http://www. safeharbor. com/solutions/knowledge-management-services/) it has almost everything that suitable for not only Dirt Bike but also many different companies. Its Knowledge Engineers work directly with the company’s teams to help with some or all of the following: Content assessment, Content creation and testing, Analysis and reporting, Contact center alignment, Taxonomy, Best practices.
It has some functions that other companies do not have like multi-language which is necessary for the company to have agencies in different countries, multi-currency for faster transaction and Boolean search for faster searching.
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