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Zunami’s Bikes Inc. | Business Plan

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We have read and understand the academic honesty policy as outlined in the syllabus and the student handbook. By affixing this statement to the title page of my paper, we certify that we have not cheated or

plagiarized in the process of completing this assignment. If it is found that cheating and/or plagiarism did take place in the writing of this paper, we understand the possible consequences of the act/s, which could include,

but are not limited to a ZERO for this assignment and a failing grade for the course.

Created By: Stephanie Arredondo | Tanvir Bashar | Johnny Zhu

Professor Dana D’Angelo BUSN 102

Table of Contents

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Cover Page

Academic Honesty

Table of Contents

Executive Summary

Mission Statement

Situation Analysis

SWOT Analysis

Business Resources

Business Strategy

Financials

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5-7

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10-11

12-13

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15-18

The main objective of Zunami’s Bikes is to offer our customers with quality bicycles that provide them with a safe, yet thrilling riding

experience. A line of bicycles will be created for various uses and various skill levels, accommodating for all consumer desires. As we look to

fulfill our customers’ needs, we hope to develop a loyal relationship that will ensure continuous business with them. A continuous business

relationship is essential for success in the long run. As a company who is looking to create a new image, we envision ourselves as an

emerging brand that will be able to compete with some of the industry’s existing giants. We look forward to developing partnerships with

companies that produce cycling accessories in hopes that we may be able to collaborate with them in order to brainstorm some innovative

ways to improve both the quality and safety of biking. Our goal is to increase our shareholder value in order to satisfy our stakeholders. Trends

are ever-changing in today’s society, so we will cater to our consumers’ desires as they change with these new trends. What was once relevant

may no longer be, so we have to pay close attention to what our customers are looking for when they purchase bikes. We want people to see

the potential of our up and coming company, and we want them to tag along for our ride to success. There have been several realistic goals that

have been set for this company, and our task is to accomplish each one of them. Zunami’s Bikes wants to leave a lasting legacy in the bike

industry. We want to raise the bar and outperform all other companies by providing comfortable, durable, and stylish bikes that bikers have

been searching for. The future of the biking industry is up for grabs as new advancements are continuously being made. While bringing in

some new ideas and fresh minds and combining them with traditional customs, Zunami’s Bikes is taking a unique approach at how they are

targeting the market, and this sets us apart from our competitors. We are anxious to make some noise in the bike industry. Our hope is that

individuals will choose to ride with us as they go through the wonderful journey that we all know as life.4

Executive Summary

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“Life is a Journey, not a Destination”

Zunami’s Bikes’ mission statement is to provide high quality bikes that will accommodate each individual’s

ride, becoming their lifelong companion, as they safely journey through the circle of life.

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Stakeholders | 6

Owners

PublicSuppliers

Unions

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Stakeholders

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Not only are we just Owners, we are also stakeholders as well. Holding a large share of stakes within our company, we cycle our company towards success. We will

work together in determining the future of the company and involve ourselves with all major business decisions. Our passion lies within the company, its people, and its product because we all share one common goal - to introduce the love of cycling to the entirety of the world.

Bell Helmets is committed to supporting the sports they were born from and the organizations that preserve, enhance and elevate these activities. The firm serves as a huge

huge supplier of cycling helmets for Zunami’s Bikes and have engaged as a stakeholder as well. With similar values, Bell Helmets and Zunami’s Bikes seel to celebrate utility, keeping it authentic and sharing the resulting energy. In the end, we are building essential performance tools that will accompany individuals.

PeopleForBikes provides a unified front for advocating for bicycling on a national level, a strategic center to ensure collaboration between each piece in the bicycling

movement, and the ability to support local efforts through our financial, community and communication resources. As a stakeholder for Zunami’s Bikes, this union hopes to connect the bicycle industry and millions of individual riders. By connecting millions of riders, we become a single powerful voice for bicycling.

The Public: From our loyal employees to cyclers, and even to our dearest community members, we offer you the opportunity to be a stakeholder for Zunami’s Bikes. We

believe in the inclusion of all, further expanding and sharing our love for bikes with every individual. Not only will you, the Public, help keep Zunami’s Bikes grounded and focused on our most ideal products, but also assist in sustaining our company’s earnings growth while benefiting yourself aw well.

Part III: Situation Analysis

Situation Analysis

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Situation AnalysisCompetitive Forces

Economic Forces

Legal and Regulatory Forces

Technological Forces

Socio-Cultural Forces

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For our competitive forces, we thought product price was important because we have to keep our price competitive with other companies in the industry. We can’t have a price too low, because then consumers will think its poor quality, but not too high either that purchasing our bikes is unattainable. We plan to keep our company competitive by also having environmentally friendly operations. We will do this by promoting our stakeholder’s campaigns to reuse bikes, have a “smart office” for our company headquarters and reuse shipping material when transporting our bikes. We will also stay competitive in our advertisements by trying to keep these unique and up to the par, if not better, than the competition.

For our economic forces, we saw industry health as a threat because if the bike industry is declining, then that will greatly affect our company. Likewise, if the industry is improving, our company will most likely do better. Another force is production cost because if the price of materials used to manufacture our goods goes up or wages go up, increasing our production costs, this will be a serious threat. We choose demographic changes as another economic threat because if an area where our bike store is that normally was very active bike riders and then many people moved out of or into the neighborhood changing this trend, it will also have an effect on our company.

As far as legal and regulatory forces go, we saw product safety as a big force because when people ride bikes, they don’t have the luxury of airbags that they have when they drive cars, so our bikes have to be made out of the strongest and safest materials so consumers can feel safe when riding our bikes. We also saw government safety standards as a force because as long as we want to make and sell bikes, we will have to be in line with government regulations for bike riding. There are also many bike riding laws that we must take into consideration when we figure out where we are going to place our products for distribution. We don’t want to be selling kids bikes for example, in a city where bike riding is only allowed on the streets, where kids won’t be.

For technological forces, we saw product uniqueness as a main force. Zunami’s Bikes isn’t the only bike option that consumers have when they want to buy a bike. Therefore, we have to make our bikes different from competitors, whether it be a unique design or color options. We also have to keep improving the performance of our bikes, so that they get better, faster, lighter and stronger as time moves on. If consumers see how dedicated Zunami’s bikes is to improving their product and ride, they will be more inclined to buy them. Another technological threat is product innovation. There are so many bike styles one can release, so we have to come up with a unique type of bike other than what is currently trending.

For socio-cultural forces, we saw fitness, consumer trends, and transportation needs as forces. Fitness is a threat because people have many choices for how to get in their daily exercise, and the biking industry faces threats from the running and swimming industries especially. Consumer trends also affect our products because much like Hooverboards were “cool” for a while, biking is a thing that could come in and out of style unpredictably. Transportation needs is also a force because the biking industry has to compete with cars, walking and public transportations as ways for people to get around. The biking industry has to draw consumers in and promote bike riding as the best form of transportation, over the other forces.

S.W.O.T. Analysis

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S.W.O.T. AnalysisStrengths

Weaknesses

Opportunities

Threats

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We saw our advanced product engineering, open-minded millennial generation and human resources as Zunami’s Bikes biggest strengths. Our bikes are all engineered with the latest materials to create a one-of-a-kind aerodynamic ride. We are also fortunate enough to have an open-minded millennial generation on our side that is open to new ideas, such as making biking the best and most popular method of transportation. Our human resources team at Zunami’s Bikes is also very strong because they have hard-working, diverse thinking and goal-oriented employees who are committed to designing, marketing and selling the best bikes the biking industry has ever seen.

For weaknesses, we saw financial stability, brand recognition and store placement as our biggest weaknesses. The past couple of years we haven’t seen the profit trends our company has wanted and even saw a decline the past couple of years. This financial instability is our biggest weakness. Brand recognition is another weakness because we are a new brand in the biking industry and getting our name out there is the biggest struggle we face in marketing. Store placement is another weakness because we are still not sure whether more bike stores, sporting goods sales or discount stores are the best places to sell our bikes. Store placement is also big on demographic regions’ interests, which we have not figured out.

We saw environmentally friendly operations, fitness promotion and bike riding trends as our biggest opportunities for the success of the biking industry and Zunami’s Bikes. In current times, companies being environmentally conscious of their green footprint is a huge concern for consumers. Due to the fact that our company has environmentally friendly operations, this will open the door for customers to be more inclined to purchase our bikes over competitors. We also have the opportunity to promote fitness for all ages, because being healthy and fit is something all ages should be concerned about. We also see an opportunity to make bike riding a trend for transportation, fitness and recreation purposes. If people see how much less pollution they create when they ride and what great exercise it is, it can start a biking trend that will only help our company in a positive way.

For threats, we saw competition, decrease in oil supplies and inconvenience as threats. Zunami’s Bikes isn’t the only biking company and consumers have many options when choosing where to buy a bike. This is why we see competition in the biking industry as such a big threat. Decrease in oil supplies is also a threat to our company because if oil supplies run low, we won’t be able to transport our products to stores and import the materials we need to manufacture our bikes. This serves as a serious threat because we can’t sell bikes if we can’t get them to stores or make them. The inconvenience of bike riding is also a threat because people might not want to wake up earlier, get sweaty or have limited options for bringing extra items if they choose to ride their bike to work or school. This inconvenience can prove to be a huge threat to our company and biking industry if serious enough.

Business Resources | 12

Human Resources

The successful operation of our business can be credited to a valiant team effort by the three executive

members of Zunami’s Bikes. Zunami’s Bikes has appointed three new executive members: a CEO, a

COO, and a CFO. Each of the executive officers collaborate with one another prior to making any

decisions final. No decisions have been made single-handedly. We have all collectively agreed on all

decisions regarding the company’s products and financials, which emphasizes the fact that we are all

striving for the same goals. All members’ opinions are valued equally, and no decisions are final

unless an agreement has been reached by all three executive officers. Each member is encouraged to

make recommendations if he/she believes that it could have a positive impact on the company. Our

suppliers play a crucial part in our success as we obtain materials from them in order to create our

high quality bikes. Various employees, such as our design team and marketing team, play key roles

when it comes designing and advertising our products to the public. By putting all the pieces together,

Zunami’s Bikes will work at an efficient performance level.

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Financial Resources

As the president of the company announced his departure, he left us with $3,444,347 of financial

resources. This amount comes from the profit left over from sales in 2016 along with the company’s

total assets. Profit after taxes in 2016 was $1,444,347, and total assets are equivalent to nearly

$2,000,000. There is always a sense of uncertainty that looms in the future for businesses. At Zunami’

s Bikes, we have created a plan in order to handle any financial need that we may come across. From

an equity standpoint, we will increase the amount of shares if we absolutely have to. We would like to

maintain a 60-40 ratio for shares in favor of the owners whether we decide to increase equity or

maintain the current level. We will offer 40% of shares to other stakeholders other than the owners.

The executives of the company will consistently hold 60% of the shares in order to have majority

ownership. Along with increasing equity, our company has looked into the possibility of increasing

our debt by taking out loans if we must do so. Looking at the bigger picture, Zunami’s Bikes would

prefer to take on some “good debt” rather than increasing equity and lose a percentage of ownership

for shareholders.

Business Strategy

Objective 1

Objective 2

Objective 3

Objective 4

Increase brand awareness from 19.6% to 25% within the next three years.As of currently, our company stands at a 20% awareness rate within the industry, having spent only $955,000 within the last 3 years. As a somewhat new firm, brand promotion is crucial as it will help increase our market share. Therefore, we want to spend more on advertising on TV, Internet, and Magazines, while allocating enough towards other spendings like PR.

Increase to at least 20,000 sales unit within the next 3 years.In maintaining a medium volume/medium cost, we wish to distribute more towards bikes shops, sports shops, and discount stores. Taking into consideration that we put bike shops and sports shops of higher priority. By increasing sales units, we would benefit in increasing our profits to cover our losts.

Increase market share from 10.4% to 12% within the next 2 years.Market share is of our highest priority, as we want want to attract more customers. Although it will be highly unlikely that this number will increase instantly, we push forth a 2% increase in the next two years. By keeping steady operations and maintaining our product’s quality and PR, we can turnover the decrease in our product demand.

Increase sales revenue by 20% within the next 3 years.Increase in sales revenue will generate an increase in our profits since we do not carry any liabilities at the moment. By steadily increasing price over the next three years, we can expect to increase price by $3-5 per year, and increasing marketing budget. Furthermore, we look forward to launch a new product after gerating an increase and stabilizating our current products operations.

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For our marketing budget, we decided to spend 45% of our available funds on magazine advertisements, 35% on T.V. advertisements and 20% on Internet

advertisements. We choose to allocate our marketing budget in this manner with the thought process that many outdoor lovers, bike riding enthusiasts and sports lovers,

who will be our primary target market, tend to read a lot of magazines in these genres. Therefore, magazine channeled advertisements were our biggest priority when

allocating our resources. Next, we spent 35% of our budget on T.V. advertisements because our outdoor lovers, bike riding enthusiasts, sports lovers as well as people who

aren’t serious bikers but might be interested in it once they see how great Zunami’s Bikes are, can be target marketed via T.V. For our least proportion of our budget, we decided to allocate 20% on Internet advertisements. We choose this number because

usually people who are active and on their feet a lot (our primary target market), don’t spend much time on the Internet doing things such as online shopping, where Internet advertisements tend to occur. However, we still included them a decent amount in our marketing budget so that we can try and lure in customers who normally wouldn’t ride

a bike, to see how innovative Zunami’s Bikes is, and the great opportunities our wonderful company can create for them as they cycle through the journeys of life.

35% 20%45%

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Current 2020 2021 2022

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18Financial Reports & Budgets | 18

After reviewing the suggestions in the Mike’s Bikes report, there were some differences when we compared it to our own marketing budget plan. Our plan was to continue our

current advertising method. We would put a larger budget towards marketing in magazines and television than we would for marketing on the internet. According to the suggestions that are given on Mike’s Bikes, we should do the complete opposite. It is suggested that we lower

our budget for magazine and slowly increase our budget for internet as we approach the $3,000,000 marketing maximum budget. It is recommended that we slowly favor internet,

television, and internet, respectively, as we increase our marketing budget.

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