LB160 eTMA 01 Summary of case study on Brompton Bicycles Brompton Bicycles, estimate this year they will sell 19,000 folding bikes with profits of ? 925,000 before tax but they plan to to boost production to 50,000 bikes a year with a ? 1million production revamp and a big sales push focused overseas. The company is aware they need to see significant sales growth both in the Uk and overseas if they want to stay a competitor in the fast growing global market, but they have encountered problems such as capacity and slow production times along with patents which expired 8 years ago.
Although they are still covered by copyright other competitors can copy the invention. There is also the problem of being based in London so the company does not benefit from the low wage structure of Taiwan, where 80% of bikes are made. Brompton are unwilling to relocate as they have had to train most of its 85 staff in specific skills.
Brompton are competitive in other cost areas as they have kept changes to their bikes minimal over the past 20 years so have been able to invest in tools and all their previous marketing has been through word of mouth, which they do need to focus on in the future. Although competitors may compare on quality and undercut them on price, last year one competitor made 350,000 bikes, Brompton believes in engineering ethos and producing bikes which are built to last so does not want to lose sight of the quality of their bikes and become a mainstream dealer, as this would lose its appeal.
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