Concrete Carbon Parts (Concrete Carbon) is a California-based company that designs and sells carbon fiber seatposts for bicycles. The company sells high-end seatposts made from custom drawn carbon fiber shafts and CNC machined aluminum head units. The design of these seatposts has undergone extensive torture testing, resulting in a level of safety unmatched by competitors. In addition to being lightweight, the seatposts offer a comfortable ride by dispersing vibrations and have yet to fail.
One of Concrete Carbon’s key advantages is its ability to offer custom-fitted seatposts based on rider weight, a service not provided by other manufacturers. This customization optimizes ride quality and safety by ensuring the weight is appropriate and allowing for flex and vibration damping. The flex in the seatpost mimics the effect of suspension, adding to the overall ride experience.
Concrete Carbon employs an outsourcing model for production, allowing it to focus on serving customers. Production is outsourced to two industry-leading subcontractors who are chosen based on their ability to scale production and meet specifications provided by Concrete Carbon.
To expand its customer base, Concrete Carbon plans to start selling to distributors in addition to individual consumers. While the growth rate for distributors is not high, the volume of potential sales makes it an exciting market opportunity.
Concrete Carbon utilizes two marketing strategies to reach its target customer segments. The first strategy is to raise awareness among individual consumers through continuous website improvements. The second strategy involves active participation in industry trade shows to develop relationships with distributors, as trust is a crucial factor in building business relationships.
Sales projections for Concrete Carbon indicate steady growth, with sales reaching $119,000 in Year 1 and $332,000 by Year 3. Over this period, profitability and gross margins are expected to increase.
Contents
1.1 Keys to Success
- Precisely engineered products
- Follow through on commitments to vendors and customers
- Strict financial controls
1.2 Mission
Concrete Carbon Parts’ mission is to create high-quality carbon seatposts. We prioritize lightweight design, comfort, and safety.
1.3 Objectives
- Become the premier carbon seatpost bicycle manufacturer
- Increase sales to ensure Concrete Carbon’s long-term sustainability
- Create a new market segment of customers to significantly boost sales
Company Summary
Concrete Carbon is a California-based LLC founded by Josh Plastic. Initially, Josh sold directly to consumers from his home. Now, he aims to expand operations by hiring new staff and selling to distributors alongside direct consumer sales.
For production, Concrete Carbon follows an outsource model. The company provides subcontractors with design specifications, and the carbon seatposts are made to order. Final assembly takes place in-house. This outsourcing helps reduce capital expenditures. Additionally, Concrete Carbon leverages industry relationships to have a third-party manufacturer produce seatpost components. Delivery terms are included in the vendor contracts. Typically, Concrete Carbon maintains two weeks of inventory, with vendors committed to three to four-week delivery times.
2.1 Company History
The company has operated out of Josh’s home for approximately one year.
Review:
The provided text contains information about the company’s past performance, company ownership, and products. It also includes market analysis, strategy and implementation, and sales strategies.
However, there are several unnecessary words and repetitions in the text that can be eliminated to make it more concise and impactful. Here is the revised text:
1. Past Performance:
2000 2001 2002
Sales $0 $0 $18,000
Gross Margin $0 $0 $8,000
Gross Margin % 0.00% 0.00% 44.44%
Operating Expenses $0 $0 $1,500
Collection Period (days) 0 0 0
Inventory Turnover 0.00 0.00 50.00
Balance Sheet:
2000 2001 2002
Current Assets
Cash $0 $0 $5,455
Accounts Receivable $0 $0 $0
Inventory $0 $0 $400
Other Current Assets $0 $0 $800
Total Current Assets $0 $0 $6,655
Long-term Assets
Long-term Assets $0 $0 $1,000
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $1,000
Total Assets $0 $0 $7,655
Current Liabilities
Accounts Payable $0 $0 $987
Current Borrowing $0 $0 $0
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $0 $0 $987
Long-term Liabilities $0 $0 $0
Total Liabilities $0 $0 $987
Paid-in Capital $0 $0 $0
Retained Earnings $0 $0 $6,668
Earnings $0 $0 $0
Total Capital $0 $0 $6,668
Total Capital and Liabilities $0 $0 $7,655
Other Inputs
Payment Days 0 0 0
Sales on Credit $0 $0 $0
Receivables Turnover 0.00 0.00 0.00
2.2 Company Ownership
Josh Plastic is the main owner of Concrete Carbon, with a passive investor.
Products:
Concrete Carbon sells carbon fiber bicycle seatposts. Carbon fiber is the ideal material for this application due to its lightweight, ability to dampen road vibrations, and structural engineering capabilities. Concrete Carbon offers seatposts in the standard size of 27.2 and provides shims for odd-sized bicycles. The seatposts come in lengths of 250 mm for road bikes and 400 mm for mountain bikes. They are available in three weight classes to accommodate different rider weights, with a five-year warranty. The seatposts are made with a carbon fiber shaft and a CNC machined head by Paul Components, bonded together using Loctite adhesive. The shaft is manufactured by Advanced Composite Technologies. The fabrication technique, CNC, allows for small production runs and precise manufacturing.
Market Analysis Summary:
Concrete Carbon has identified two market segments – individual consumers and distributors. Individual sales are done via the internet, while sales to distributors are made through industry trade shows.
4.1 Market Segmentation:
Concrete Carbon has segmented the market into two customer groups:
– Individual consumers: Products are sold directly to the consumers via the website. These customers typically ride a significant distance annually, have high-quality bicycles, and a decent disposable income.
– Distributors: These middlemen sell to independent bicycle retailers. The main distributors for Concrete Carbon are Quality, Seattle Bike Supply, and Riteway.
Market Analysis:
2003 2004 2005 2006 2007
Potential Customers Growth CAGR
Individuals 343,009 377,310 415,041 456,545 502,200 10.00%
Distibutors 14 15 16 17 18 6.48%
Total 343,023 377,325 415,057 456,562 502,218 10.00%
4.2 Target Market Segment Strategy:
Concrete Carbon will target individual customers through the website and existing customer relationships. Distributors will be targeted through industry trade shows, emphasizing the company’s ability to meet their needs and maintain good relationships.
4.3 Industry Analysis:
The bicycle parts industry is typically organized into three layers – manufacturer, distributor, and retailer. Direct marketing manufacturers have emerged in recent years due to the efficiency of the internet.
4.3.1 Competition and Buying Patterns:
The main competitors in the market are LP Composites, U.S.E., and Easton. Consumers tend to prioritize the carbon fiber material when purchasing seatposts.
Strategy and Implementation Summary:
Concrete Carbon will leverage its competitive edge of offering customized products for different riders. Marketing efforts will focus on promoting the lightweight, safe, and high-end nature of the seatposts. Sales will be conducted through the website for individual customers and via trade shows for distributors.
5.1 Competitive Edge:
Concrete Carbon’s competitive edge lies in its customized product offerings for different weight groups. This provides riders with the lightest and most comfortable seatposts while maintaining safety. The company prioritizes quality and addresses any warranty claims promptly.
5.2 Marketing Strategy:
The marketing strategy for individual customers will primarily involve online promotion through search engine optimization and pay-per-click advertising. Trade shows are the key marketing channel for distributors.
5.3 Sales Strategy:
For individual customers, the sales strategy will focus on emphasizing the product’s customization and combining comfort and safety. The sales strategy for distributors will emphasize establishing close relationships, assuring availability and quick order fulfillment.
5.3.1 Sales Forecast:
Sales are expected to increase following the Bicycle Industry Trade Show, as more retailers carry Concrete Carbon’s seatposts. Additionally, increased visibility and marketing efforts are likely to drive individual sales.
| Sales Forecast | |||
| 2003 | 2004 | 2005 | |
| Sales | |||
| Individuals | $49,984 | $84,343 | $101,212 |
| Distributors | $69,837 | $196,560 | $231,212 |
| Total Sales | $119,821 | $280,903 | $332,424 |
| Direct Cost of Sales | 2003 | 2004 | 2005 |
| Individuals | $22,493 | $37,954 | $45,545 |
| Distributors | $48,188 | $135,626 | $159,536 |
| Subtotal Direct Cost of Sales | $70,680 | $173,581 | $205,082 |
5.4 Milestones
Concrete Carbon has identified milestones that need to be accomplished. The chart below indicates the start dates, expected achievement dates, and responsible individuals for each milestone.
| Milestones | |||||
| Milestone | Start Date | End Date | Budget | Manager | Department |
| Business plan completion | 1/1/2003 | 2/1/2003 | $0 | Josh | Strategic Op |
| First distributor sale | 3/15/2003 | 4/15/2003 | $0 | Josh | Sales |
| Profitability (inc/distributors) | 3/15/2003 | 8/30/2003 | $0 | Josh | Accounting |
| Yearly sales >$250K | 1/1/2002 | 12/30/2004 | $0 | Josh | Sales |
| Totals | $0 | ||||
Web Plan Summary
Concrete Carbon has a fully implemented website mainly accessed by individual customers. Its purpose is to provide sufficient product information for sales. The website does not support online commerce; customers must place orders by speaking to a representative.
6.1 Website Marketing Strategy
Concrete Carbon has been using pay-per-clicks through Google Search for the past year. This places Concrete Carbon higher on the search results when users search for seatposts, bike parts, etc. This strategy will be continued.
6.2 Development Requirements
As mentioned earlier, the website has already been developed.
Management Summary
The backbone and leader of Concrete Carbon is Josh Plastic. Josh holds dual degrees from UC Berkeley in business and mechanical engineering. These degrees were chosen due to Josh’s interest in parts construction and engineering theories. Josh also wanted a business background for potential future applications.
Being an active cyclist, Josh found an internship at Paul’s Components. The internship lasted five months and could have turned into a full-time position. It went well, and at the end, Josh accepted a job offer in the product design group. He worked at Paul’s for three years, becoming the head designer of their brake group. One of his accomplishments was the design of Paul’s Crosstop brake, which uses IRD’s widget design, the precursor to V brakes.
Josh’s experience at Paul’s confirmed his desire to work in the bicycle industry and seek work with more autonomy. He left Paul’s and started Concrete Carbon based on an outsourcing model, where all parts are outsourced according to specifications, reducing start-up costs. Josh believed that this model could be easily scaled once ready to sell to distributors in addition to individual customers.
7.1 Personnel Plan
Currently, Josh is running the organization by himself. He is responsible for product procurement, order taking, customer service, and other activities. As sales increase and trade shows approach, Josh plans to hire an employee to assist with administrative tasks, order taking, customer service, post-assembly, and order fulfillment. This will allow Josh to focus on increasing distributor sales.
| Personnel Plan | |||
| 2003 | 2004 | 2005 | |
| Josh | $24,000 | $33,000 | $45,000 |
| Employee #1 | $17,500 | $26,400 | $28,000 |
| Total People | 2 | 2 | 2 |
| Total Payroll | $41,500 | $59,400 | $73,000 |
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