In the United States, only 5% of the country's 100 million bikes are used for transportation. 75% of bicycles and parts in the world are made in Asia. China stands out as the largest producer of bicycles and bicycle parts. In 1999, China produced 20 million bikes and exported 10 million to other countries. The 2nd largest producer of bicycles, Taiwan, exported 70% of bicycles made to the United States for producers such as Trek, Schwinn, and Specialized. .
Degree of Vertical Integration.
Cannondale uses a high level of vertical integration. This means they produce many of their components used to make their bicycle product. The major item that Cannondale produces versus outsourcing is the aluminum frame that it manufactures in the United States. Most of its competitors import frames and other components from Asia.
Market Segmentation by Channel of Distribution.
Bicycles in the U.S. are distributed primarily through large discount retailers and independent specialty bicycle shops. Large retailers account for 70% of bicycle sales and 50% of total bicycle sales.
Technological Change and Innovation.
Cannondale designs its bicycles for customers that required high-performance, high-quality cycles. They use technology that focuses on making the bicycle "lighter, stronger, faster, and more comfortable than those of its rivals." From its first aluminum framed bicycle in 1983, Cannondale used innovation to create improvements that have evolved into technological advancements of today. In 2000, Cannondale introduced a "lightweight thermoplastic carbon-skin frame that was bonded to a magnesium spine". The name for this new mountain bike was the Raven. .
Product Line.
In 2003, Cannondale now offers 80 different bicycles to chose from. All except for the Raven are made with aluminum frames. These different cycles range from road, off-road, competitive, non-competitive, and leisure. Cannondale offers a full range of high-performance bicycles for customers that want high quality performance from their bicycle.
