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DEVINCI ATLAS-RX MOUNTAIN BIKE Prepared for Aashna Dayal IBM 104 Section -G St

DEVINCI ATLAS-RX MOUNTAIN BIKE

Prepared for
Aashna Dayal
IBM 104 Section -G
St. Clair College

Prepared by
Harmanjot Kaur (0717790)
International Business Management Program
St. Clair College

July 16, 2018

TABLE OF CONTENT

1 EXECUTIVE SUMMARY………………………………………………………3
2 INTRODUCTION……………………………………………………………….4
3 IDENTIFICATION OF PROBLEMS……………………………………………4
3.1 Higher import duty………………………………………………………….4
3.2 Shipping cost………………………………………………………………..4
3.3 Research & Development……………………………………………………4
3.4 Competition………………………………………………………………….5
3.5 Software and Finance Problem………………………………………………5
4 PRODUCT POSITION IN CANADIAN MARKET ………………… ……….5
5 SWOT ANALYSIS……………………………………………………………..5
6 GLOBAL MARKET TREND ANALYSIS…………………………………….6
7 PESTLE ANALYSIS……………………………………………………………6
7.1 Political…………………………………………………………………….6
7.2 Economic……………………………………………………………………6
7.3 Social and Cultural…………………………………………………………6
7.4 Technological………………………………………………………………6
7.5 Legal……………………………………………………………………….7
7.6 Environment……………………………………………………………….7
8 MAIN COMPETITORS ……………………………………………………….7
8.1 Mobike…………………………………………………………………….7
8.2 Giant………………………………………………………………………7
8.3 Yerka………………………………………………………………………7
9 VISUAL………………………………………………………………………..8
10 CONCLUSION ………………………………………………………………9
11 RECOMMENDATIONS……………………………………………………..9
14 REFERENCES……………………………………………………………….10

1 EXECUTIVE SUMMARY
Cycles Devinci is a Canadian bicycle manufacturer started its business from Quebec in 1987. Devinci which is last bicycle manufacturing of Canada became very interesting subject specially for business students as this firm looking for opportunity to become world leading company in bicycle market. This article analysis the product material, parts and involvement of new technology as well as the company background. This project predicts the success and success factor of this product and company in Taiwan. Moreover, problems which are faced by this company and product will be examined in the following paragraphs. Additionally, products actual position in the Canadian market as well as global market will be identified with the implementation of SWOT analysis. Furthermore, to make this product successful this article shows the PESTLE analysis to evaluate the success factor of this product in Taiwan, also evaluate the market growth and competition given by its main competitors. In the end, this article will end with a lucrative conclusion and some recommendation according to the market of Taiwan bicycle market, global bicycle market as well as Canada bicycle market.

2 INTRODUCTION
Devinci cycles is a last Canadian manufacturer which was founded by two engineering students in Chicoutimi, QC (Quebec) in 1987. Owner of road biking, Felix Gauthier, purchased half the company in 1990, Under Gauthier the brand has grown its U.S. and international distribution channels. Gauthier has since taken over full ownership of the business and Devinci proper was born. Devinci has been manufacturing aluminum bicycles in different types of its Chicoutimi, Quebec, factories since 1987. The current factory surrounds 100,000 square feet and employs 75 to 125 workers, depending on production cycles. Bicycle manufacturing begins in Devinci’s R;D department. This is where Dave Weagle’s patented Split Pivot suspension engineering is merged with Devinci bike frame design. Before production, an instrumented test bike is created. This technology is proprietary to Devinci and is used to measure real-world forces on a bike combined with computer CAD simulations. In past, the purpose of the company to make a performance bike that the average cyclist could take to the races or on a long ride like a fondo without feeling too beaten up afterward but currently company is doing its best to exploit its aluminium expertise and innovate in ways to keep it growing. Although the company does import carbon parts and frames for some of its bikes, it still welds its own aluminium frames on site, which ensures quality in a much trickier process. Having that expertise on site also means the company can adjust to market forces more quickly and can innovate more efficiently. The price of devinci bike in U.S. is $3400 and its weight is 16.6 lb(M).
3 IDENTIFICATION OF THE PROBLEM

Devinci Company is well known for global manufacturing leader in the World because of their innovative ideas. Apart from road, mountain and hybrid bicycles, it also manufactures the BIXI-brand of bicycles used in bicycle sharing schemes in cities such as Montreal and Toronto. Devinci supplies a similar bicycle to Santander Cycles in London, England. Currently company is facing various problems in global competition. Major problems of company has been given below.
3.1 Higher Import Duty
Import duty is first levied when imported goods first enter the country. Devinci company is importing several parts of bicycles from other countries which results to increase the cost of bicycle. In future the Government is going to change import duty and the cost of bicycle will rise in future of this company.
3.2 Shipping Cost
The company is highly depended on shipping industry for the movement of bicycle from one place to another. Bicycle is designed in Chicoutimi and final production is done in Taiwan. As aluminium from this place is shipped to Taiwan for bicycle which cost more for company.
3.3 Research and Development
Mechanical engineers and material specialists analyze every aspect of the bike and modifies the design countless of times using CAD software to increase the performance of the bike. For the improvement of bike company is spending large amount of money on R&D which results to increase the cost of company.
3.4 Competition
It is extremely difficult to be competitive these days. Excellent quality of bikes are coming out of Asia at very low prices. Nowadays, an international inventory of bike components is facing threat from their competitors like Mobike, Giant, Yerka Bicycle companies. These companies are one of those companies which are giving tough competition to Devinci Company.
3.5 Software and Finance Problem- Devinci utilize most of their finance for research and development as company start manufacturing unique bicycle to compete in other regions. For future it focus to produce almost 8000 bike share system bicycle which requires special software and this would be current challenge for this company.
4 PRODUCT ANALYSIS
Devinci Marshall 2017 Mountain Bike is actually the new iteration of the Hendrix model and takes its handle from Jimi’s middle name, Marshall. According to Devinci, it rocks just as hard as the character. As the title suggests, Marshall was designed to excel on all types of train like Trail, All-Mountain, Enduro and even cross country. It is built around an aluminium optimum G04 frame or a carbon DMC-G frame. The latest version of the Split Pivot suspension, Boost spacing at the back and 27,5″ (29″ are compatible), this bike is equipped to ensure traction to the ground and give an unparalleled stability. Unlike the Hendrix which had only one version available, the 2017 Marshall is offering four versions, two carbon and two aluminium.
5 PRODUCT POSITION IN CANADIAN MARKET

The Devinci is a Canadian company their bikes not only have better frame than its competitors, it also has better wheels and ride quality. The whole bike industry right now is trying to save a lot of weight in the wheels by reducing the number of spokes. Devinci makes their wheels strong and they are 1% heavier than other bicycle companies. In a market where many companies have simply missed the mark, Devinci has their priorities straight. They built their bikes for the path and the city (Northeastern city: salt, snow, steel poles). They are one of the few products that are actually designed for Canada.https://curbsidecycle.com/blogs/blog/114864003-why-devinci

6 SWOT ANALYSIS

Strength Weaknesses
• People of all age groups can ride this bicycle on street
• Light weight and easy to handle • Poor accommodation for pedestrian
• Adjacent to industrial area
Opportunity Threat
• Create new business
• Green spaces possible
• Inclining trend of active lifestyle • Lack of awareness of brand
• Traffic

The trend of using bicycle is high and people believe in safety, fitness, ethics and clean environment. However, because of increasing population and pollution the growth of using bicycle is increasing. Nowadays, growing traffic congestion and high fuel prices is also the main reason for people to use bicycle. Moreover, by cycling one can experience beautiful forest sight, lakes and river sides.
7 GLOBAL MARKET TREND ANALYSIS
The global high-end bicycle market is expected to grow at am impressive CAGR of approximately 5% during the forecast period, 2017-2021. The report segments the market based on product (hybrid bikes, mountain bikes, road bikes, track bikes and other bikes), retail format (specialty bicycle retailer, sporting goods retailer, department stores and hypermarkets) and geography (the Americas, EMEA and APAC).

8 PESTEL ANALYSIS

8.1 Political- Taiwan has been facing very few opportunities for example the local dollar has increased which is beneficial for the economy as well as the people working in Taiwan. However, on the negative side, Taiwan has an issue with China like China banned on Taiwan food import as well as the government trying to end the employment of Taiwanese in China
8.2 Economic- Starbucks being a company that relies heavily on the manufacturing industry to manufacture their cups, tumblers and many other products that are currently safe in Taiwan. Taiwan’s manufacturing industries are growing at a steady rate. Its forecasted that Taiwan’s manufacturing industries will continue to increase in the future which proves as a benefit to Starbucks as Taiwan is one of its most successful stations globally. On the other side Taiwan has been facing criticism on the food safety concerns and as a result Taiwan’s shares has fallen which will heavily impact Starbucks.
8.3 Social and Cultural- Starbucks coffee takes place on world stage. They are not only famous for their coffee but also for sandwiches and salads they offer. The local citizens of Taiwan having doubts about the food safety. Starbucks need to step up in terms of hygiene and food safety to keep their customers. The threat to Taiwan’s food industry is big as activists have started a protest against a food safety in Taiwan. This brings negative impacts to Starbucks that’s main income comes from food they provide.
8.4 Technological- The benefits in terms of advancing technologically in the food industry is proven beneficial to Starbucks. Scientists in Taiwan have invented a biochip to recognize harmful pathogens in their ingredients, this can help solving the problem of food safety speculations that are rising in Taiwan society. Moreover, another Taiwanese biologist has also developed a bacteria formula that will help strength the roots of crop plants and in future will reduce the need of pesticides and fertilizers that will also improve food safety.
8.5 Legal- Taiwan is a civil law jurisdiction and draws heavily on German and Japanese models. Intellectual property (IP) and Commercial law in Taiwan are greatly influenced by similar law in the U.S. Taiwan has less strict laws as foreign investment is welcomed. Major low governing relationship in Taiwan is the Labour Standards Act (LSA), which sets a minimum standard for employee rights.
8.6 Environment- Taiwan is small country with broad range of environment. It is dominated by forested area. Almost three-fourth of the country is slope land and nearly half of the total area of the main island is above 1000 metres.

9 THREE MAIN COMPETITORS

9.1 Mobike- Mobike is a Chinese company founded by Beijing Mobike Technology Co. Ltd. It is a smart sharing company, has seen rapid expansion to over 130 cities since its inception in 2016. It has chosen the U.K., specially Manchester to launch its expansion beyond Asia. With the passage of time they are spreading their business in all over the world. This bicycle company is giving tough competition to Devinci Mountain bikes as the price of bikes are very low as compared to Devinci.
9.2 Giant- It is Taiwanese company that is recognized as the world’s largest bicycle manufacturer. It was founded by King Liu in 1972. It manufacture bicycles in Taiwan, Netherland and China. As bike sales increased in the U.S. and after workers at the Schwinn plant in Chicago went on strike in 1980, Giant became a key supplier, making more than two-thirds of Schwinn bikes by the mid-1980s, representing 75% of Giant’s sale. As compared with Devinci, Giant bicycles are less expensive.
9.3 Yerka- The world’s first ‘Unstealable bike’ that was created by three Chilean engineers with a self-locking frame. It looks like an average bike, but the bottom tube of frame can be split into two parts and wrapped around the pole. According to creators, the frame can be dismantled and reconnected to make a lock in just 10 seconds. Once the bike’s seat tube forms a lock. The only way to seal the bike would be to cut through it and destroying it in process. This company bicycles are unique because of its lock and Unstealable feature.

10 DEVINCI DJANGO (Frame Geometry)

LO ST
mm SA
deg HA
Deg
TT
mm REACH
mm CS
mm WB
mm BBH
mm SOH
mm STACK
mm HT
mm
S 410 74.5 67.5 575 420 427 1128 334 698 588 105
M 435 74.5 67.5 598 440 427 1151 334 710 597 115
L 470 74.5 67.5 622 460 427 1175 334 728 606 125
XL 500 74.5 67.5 647 480 427 1201 334 739 620 140

HI ST
mm SA
deg HA
deg TT
mm REACH
mm CS
mm WB
mm BBH
mm SOH
mm STACK
mm HT
mm
S 410 75 68 574 425 425 1126 340 704 584 105
M 435 75 68 597 444 425 1150 340 716 593 115
L 470 75 68 620 468 425 1174 340 734 602 125
XL 500 75 68 645 484 425 1200 340 745 616 140

The new Devinci Django hits the market today. ‘Coming to the realisation that the latest EWS proven 160mm travel machine would be pure overkill for most of us and the terrain we encounter at our local trails and choosing a more appropriate option for our immidiate needs is a wake-up call that more and more of us are coming around to. This was the precise reason that the team at Devinci designed the Django. While fast and aggressive riders might feel that a bit under gunned on rough-and-ready trails, those looking for a bike to hammer out the miles at their local trail centre and some fun along the way, will like what they find.’-Olly Forster

11 CONCLUSION
Devinci Mountain Bike can has huge chances to get success in Taiwan. Taiwan was being called ‘The Bicycle Kingdom’ this was title earned strictly because of exports. This country has over 4500km of dedicated bicycle path well-ridden by local cycling enthusiasts. In addition, increasing number of foreign cyclists are coming to Taiwan to ride the islands, paths and roads. It is predicted that cycling would become a popular hobby in Taiwan and that Taiwan’s bike-friendly roads would draw visitors from around the world but still there are number of challenges in front of Devinci that how to tackle companies like Mobike, Giant and Yerka which are spreading their branches in all over the world. Interestingly, the trend of bicycle is increasing across the world. People are getting aware about the harmful consequences of pollution. So, in such circumstances Devinci will have bright future in the bicycle industry.
12 RECOMMENDATIONS
Taiwan is also known by the name of ‘The Bicycle Kingdom’ and predicted that in future cycling would become popular hobby in the Taiwanese. Devinci bicycle is more stiff and durable than other companies in Taiwan market. If Devinci promote their product through cycling campaign, mass media and attractive ads, it will result in increase in demand.

REFERENCES
Cycles Devinci. (n.d.). en.wikipedia.org/wiki/Cycles_Devinci.
Babin T. (2014). How Devinci, the last Canadian bike manufacture, is competing in a globalized world. www.calgaryherald.com
“Bicycle Commuting Data”, The League of American Bicyclists, http://www.bikenation.ca
“Cycling Embraces a Digital Gear Shift”, by Ian Austen, New York Times, July 12, 2016
“Effortlessly We Roll Along”, by Bridge Mander, The Wall Street Journal, August 6, 2016.
Three New Bikes from Devinci. (2016). www.bikenation.ca
Why Devinci?. (2018). www.curbsidecycle.com
Maida J. (2017). Americas Tops the Global High-End Bicycle Market – Technavio. Media ; Marketing Executive. www.businesswire.com

Janice (2012). Taiwan PEST. www.sites.cdnis.edu.hk

Coogon, J. (2016). Mobike: Bike-sharing app chooses Manchester in a bid to establish a New Order. www.marketline.com
The Natural Environment of Taiwan. (2016. ). www.conservation forest.gov.tw
High Country Velo Advantage. (2016). www.highcountryvelosales.com