Domestic manufacturing strategy: keeping its plant on the same campus as its corporate offices in Boulder, Colorado. It had contributed greatly to cooperating among various departments and ultimately to the company's growth.
In 1992 EDC's sales and earnings had hit record levels.
Now the Company produced almost 30% of the bicycles sold in the United States.
U.S. mass-market bicycle sales were growing by only 2% per year.
For years, the Company had concentrated its efforts on inexpensive bicycles.
Boulder Colorado, was a bicyclists Mecca. Eldora employees at all levels shared a genuine love of bicycling and eagerly pursued knowledge of the industry's latest trends and styles.
All marketing staff, engineers, designers and manufacturing personnel worked on one campus, within a 10-minute walk of one another.
A Joint venture with Rinaldi, a high-end Italian bicycle manufacturer. EDC had begun importing Rinaldi bikes and Rinaldi had begun marketing EDC bikes in Europe. .
MOVING TO CHINA.
Reasons for do it. .
The industry is reaching the saturation point in United States.
Two of the largest bike manufacturers in the world, located in rapidly growing Asian markets, enjoyed a significant labor and distribution cost advantage.
Of the 200 million bicycles made in the world last year, 40 million were sold in China, 30 million in India and 9 million in Japan.
There's a growing middle class. The demand in Asia has been doubling annually.
EDC can't compete from U.S, about 20% of it product cost is labor, and the hourly wages of the manufacturing workforce in those countries are between 5% and 15% of EDC.
EDC has also a 20% cost in transportation and duties for get its bicycles to those markets.
There are a lot of companies in Asia that could provide EDC with a product very quickly if it gave them its designs and helped them with their production process.
Reasons against China.
The roads to the facility are in very poor condition.
