Concrete Carbon Parts (Concrete Carbon) is a California-based company that designs and sells a variety of carbon fiber seatposts for road and mountain bicycles. The company was formed in 2002 as a California L.L.C. and has operated out of the owner's home for the last year. The company has sold the seatposts via the Internet to individual customers, and the owner wants to take the company to the next step.
The Products
Concrete Carbon sells high-end carbon fiber seatposts. The shafts will be made out of custom drawn carbon fiber and the head unit will be CNC machined out of 6000 series aluminium. Through extensive torture testing, Josh has developed a design of posts that achieve a barrier of safety that has yet to be reached by any competing product. Concrete Carbon is able to offer a high-end seatpost for both road and mountain cycling applications that are among the lightest available, quite comfortable due to carbon fiber's natural ability to disperse vibrations, and are completely safe. Concrete Carbon has yet to have a seatpost fail.
Concrete Carbon's competitive edge is based on its product, it is able to offer a range of posts to properly fit each individual rider. The range of posts are based on rider weight. There are no other manufacturers offering custom fitting. This is quite valuable as the ride, safety margin, and weight are all significantly effected by the way the post is tuned. With the post custom tuned to a rider's weight range, the weight will only be as much as it needs to be in terms of safety and the ride quality will be optimized by allowing a sufficient amount of flex to occur, dampening road and trail vibrations. The flex associated with the post is so much that it is positively likened to a form of suspension.
Concrete Carbon will employ an outsource model for production to allow Concrete Carbon to concentrate on what it does best, serve the customer. Production will be outsourced to two leaders within their respective industries. Josh provides the subcontractors will all the design details and they will make the parts to specification. The subcontractors were chosen in part on Josh's networking contacts established with them prior to Concrete Carbon. They were also chosen on their ability to scale production when needed.
The Market
Concrete Carbon currently sells seatposts directly to individual consumers. In order to grow the business, Concrete Carbon needs to begin selling to new customers. It has decided to begin selling to distributors. The annual growth rate for individual customers is 10% with 343,009 potential customers. The growth rate for distributors is 4% with 14 potential customers. While the growth rate of distributors is not that high the sheer volume that distributors will sell and buy relative to the individuals makes the potential market very exciting.
Marketing
Concrete Carbon will employ two somewhat distinct marketing strategies to reach its perspective customer segments. The first strategy uses the website to raise awareness of Concrete Carbon's parts to individual consumers. The website has been up for a year and there will be continual improvements made to it. Concrete Carbon will be quite active at the various industry trade shows to develop sales relationships with the different distributors. The trade shows are the most effective place to develop close relationships with new and perspective distributors. Since the business relationships are based on trust, participation at the shows will allow Concrete Carbon to invest a lot of trust into many different relationships.
Sales will reach $119,000 by 2003, rising to $332,000 by 2005. Over the next three years, Concrete Carbon Parts will steadily increase profitability and gross margins.
1.1 Keys to Success
- Precisely engineered products.
- Follow through on all commitments, both to vendors and customers.
- Strict financial controls.
1.2 Mission
It is Concrete Carbon Parts' mission to create the finest quality carbon seatposts on the market. It will emphasize lightweight, comfort and a realistic safety margin for all of our products.
1.3 Objectives
- To become the premier carbon seatpost bicycle manufacturer.
- Increase sales to make Concrete Carbon a sustainable business.
- Significantly increase sales by creating a new market segment of customers.
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