Essay About Competitive Environment Facing Edc And Terms Of The Competitive Environment Facing Edc

What Is the Competitive Environment Facing Edc?
What Is the Competitive Environment Facing Edc?
1. What is the competitive environment facing EDC?
In terms of the competitive environment facing EDC, Ann realizes that not only is the
number of competitors increasing, but the nature of the demand for bicycles is changing as
well. The U.S. mass market bicycle sales is expected to grow by only 2% a year, while the
Asian market for those same bikes is nearly doubling on a yearly basis. This growth scenario
is likely to lead to thinner margins and a lower ROI in the U.S. for bicycle sales. Additionally,
EDCs foreign sales performance has been flat the last two years, likely the result of not
being able to compete on price given their current U.S. distribution channels in place. EDC
has higher wage rates, material costs, and distribution costs than their competitors in Asia
and other foreign markets. Both of Anns vice-presidents agree that EDC must move quickly
to capitalize on the growing Asian market before other competitors change the market
landscape.
2. What are EDC’s strengths in manufacturing?
EDC has a number of strengths in their manufacturing division. Their flexible manufacturing
operation seems quite adept at meeting the changes in trends and fads of their market. This
operation is cited as a key factor in EDCs ability to meet rapid change in the local market.
Having their plant in Boulder, a bicycling Mecca, has helped to keep EDC on top of trends
and demand changes in the U.S. market. Their engineers seem to be ahead of the curve in
designing new products and features that consumers desire. This design knowledge is also
the result of the cross-functional cooperation, and geographical proximity of the entire staff,
including engineers, marketers, manufacturing, etc. EDC also has a strong quality and state-
of-the-art design orientations, and these strengths have helped give them a competitive
advantage in the market in that they can charge a higher price premium for their products
than their foreign competitors.
3. Should EDC establish a manufacturing division in Asia?
I think that EDC should establish a manufacturing division in Asia. The long-term horizon in
the U.S. is one of slower demand and more mass and niche competition, while the Asian
markets are growing in the double digits and may react quite favorably to a high quality
bicycle as compared to the current offerings. I do think that more research is needed in
terms of facility location (e.g., China, Taiwan, etc), but that EDC should ramp-up an operation
as soon as possible. EDC should look to where other U.S. companies are located abroad, and
discuss with those companies