Shimano’s Challenge Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Shimano’s Challenge Case Solution

Question no 1

Factors behind Shimano’s success in the bicycle parts market

To analyze the factors behind Shimano’s success in the bicycle parts market; it is very important to look at the overall industry analysis thoroughly.

Industry Analysis

There are several factors behind Shimano's achievement in the bike parts. Externally, Shimano and its Chief Director had been fully aware of the company's context. They perceived the external climate, market trends and patterns, and took advantage of the key achievement factors in each market section. Whereas, internally, Shimano had made strong building-up-activities to achieve the company's objective. Based on these two factors, i.e. external and internal; the organization made specific strategies and decisions which strengthened the growth of Shimano’s bicycle parts’ market.

To analyze the macro factors that affected Shimano’s bicycle parts market;let’s look into the PESTLE analysis of Shimano’s various markets,which are: Japan, the US and Europe.Each country/region has its own market, culture or legal barrier. (Isely, 2004)

Japan
Japan Cycling Association was shaped in 1954 by huge visit administrators. The bike consists of more than 1000 parts which can be segmented into 25 categories. These categories are divided into low-valued items, such as: handles, saddles and high-value items. Most Japanese bike part manufacturers worked in very small spaces and mainly focused on a single section. When it comes to Japanese clients, it has been observed that the clients are quality conscious and focused and they have a strong liking towards bicycles.

US Market

In terms of the US market; the early underpinning of a mechanized society drove to negative secondary effects, for instance: the reliance on cars and lack of exercise have caused several health issues. After the 1960s, there was a huge interest in living a better lifestyle in the US. Consequently, cycling in the US made up for the lost time as the newly developed interests in people regarding their wellness started having a positive effect on the bike industry in the US.

However, few manufacturers in the US were able to produce high-quality bicycle parts so they mostly relied on Western Europe for reliable and high-quality products.

European market

In 1960-1970, when Shimano's was thinking about entering the European market, they understood that bike culture was highly settled in Europe, and makers in Europe did not effectively acknowledge the items particularly from Asia. They were very delighted with what they delivered. Since Shimano did not have a broad picture in Europe; it attempted to enter from road racing program to make its situation on the lookout. Road racing was profoundly famous in Europe so Shimano substantiated itself by building superior execution and sturdy parts. Additionally, it got a racing team sponsor and built strong brand recognition. (Li, 2011)

Swat Analysis of Shimano

Strengths

Strong R&D skills.
Dominates the Japan Market.
Strong customer focus.
High technical capabilities.
It has a direct sales connection with the bicycle assemblers and retailers.

Weakness

Very weak connections with the trading company in the US and EU.

Opportunities

In the US, there is a high demand for mountain bike market, which can serve as a great opportunity for Shimano.
The high and durable quality parts made by Shimano have significant importance in various US markets

Threats

Fluctuations in demand.
High competition in the EU market............................

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Shimano’s Challenge Harvard Case Solution & Analysis