What are the competitive forces that can affect the industry?

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Company summary. Write a ½ page summary of the Dirt Bikes organization. You will re-use this summary for any case analysis on Dirt Bikes, so spend some time creating a succinct description of the company’s mission, products, customers and market, its relevant features (number of employees, volume of business, etc.) and its company culture. What are the competitive and market forces it faces? In a consulting case, this paragraph demonstrates to management that you understand the organization and their business. (you will be able to use this summary for context in future assignments related to the Dirt Bikes case.2. Give a brief overview of what kinds of information systems and technologies would be the most important for a company such as Dirt Bikes to support its business processes? Explain each item and tell how it could be used and would benefit the company.3. Using applicable economic analysis tools you’ve studied (such as value chain, core competencies, competitive forces, and network economics) outline the strategic and competitive position of the firm. Identify ways that technology and information systems might support their strategic position and competitive advantage. You might want to consider some of the following. Which activities at Dirt Bikes create the most value? How does Dirt Bikes provide value to its customers? What about the competition (How do their products compare in price to those of Dirt Bikes? What are some of the product features they emphasize?)? What are the competitive forces that can affect the industry? What competitive strategy should Dirt Bikes pursue? What information systems best support that strategy?case study belowDirt Bikes: A running case fileText for this case was provided by Pearson Publishing, in conjunction with the course textbook (Kenneth C. Laudon and Jane P. Laudon. 2016. Management Information Systems: Managing the Digital Firm, Fourteenth Edition. Upper Saddle River, New Jersey: Pearson Prentice Hall.). It was modified (charts and tables from separate files were incorporated into this document) and uploaded to Empire State College’s Management Information Systems course (SMT 273754) with permission. During this course, you will have assignments related to this case. You should start by reading about the company and developing an understanding of its business model, its organization and its financial condition.————————————————————————————————-ContentsDirt Bikes: A running case fileIntroduction to Dirt BikesCompany History and BackgroundOrganization Chart and EmployeesProducts and ServicesSales and MarketingSelected Financial DataFigure 1 Dirt Bikes USA Organization ChartFigure 2: Sample Bill of MaterialsTable 1: Consolidated Statements of Income (in thousands) 2012- 2014Table 2: Summary Balance Sheet Data from 2012 to 2014Table 3: Sales By Model 2010-2014Table 4: Domestic Versus International Sales Introduction to Dirt Bikes Dirt Bikes USA is a small company headquartered in Carbondale Colorado that manufactures and sells its own brand of off-road motorcycles. It was founded in 1994 to product dirt bikes that could be customized for racing and off-road recreational riding using the best quality components and parts from all over the world. The company has continued to grow and now faces a new set of challenges and opportunities. You have been asked to serve as a consultant to apply your information systems knowledge to help Dirt Bikes solve some of the problems it is encountering. In order to complete your assignments, you should familiarize yourself with Dirt Bikes. To learn more about the company and how it works, review each of these topics in this document: Company History and BackgroundOrganization Chart and EmployeesProducts and ServicesSales and MarketingSelected Financial Data Company History and Background Dirt Bikes USA was founded in 1994 by Carl Schmidt and Steven McFadden, two young but experienced bikers with engineering backgrounds who saw that dirt bikes were becoming very popular in the United States as both sporting and racing motorcycles. They developed frames for dirt bikes that were more suited to off-road handling and started using these frames to build their own dirt bike models using motorcycle engines manufactured by other companies, such as Honda and Rotax Motors of Austria. Riding on one of their customized dirt bikes, Steven finished first in the famous Barstow to Las Vegas race. There was so much interest in Carl and Steve’s bikes that they decided to open a production facility that could manufacture large numbers of their dirt bikes for the retail market. They opened a small production facility in Carbondale which has since expanded to house 120 workers involved in production, design, and engineering and a corporate sales and administrative staff of close to 20 employees. Over the years Dirt Bikes USA has enhanced and expanded its product line to include dirt bike models optimized for racing and for off-road recreational use. Its racing models have placed well-and often placed first– in the many dirt bike races staged throughout the United States, including the Barstow-Las Vegas race and competitions at Daytona Bike Week. Organization Chart and Employees The organization chart is illustrated in Figure 1. Dirt Bikes USA is still privately owned with Carl serving as CEO and Steven as President and Chief Operating Officer. About 120 employees work in design, engineering and production, including 3 full-time product designers and 3 engineers. In addition to a 4-person Parts department, Dirt Bikes maintains a ten-person service department to service warranties and customer problems with parts and motorcycle performance. Five employees work in Dirt Bikes’ shipping and receiving department. Dirt Bikes’ sales staff consists of a marketing manager and 5 sales representatives, two for the West coast and Western United States, one for the Midwest, one for the Northeast and one for the South. The corporate administrative staff consists of a controller, one accountant, one administrative assistant, two human resources staff members, three secretaries, and two information systems specialists to support systems servicing all of the business functional areas. The data file Dirt Bikes Org Chart shows Dirt Bikes’s organization chart. The company maintains a very friendly family atmosphere, encouraging teamwork, attention to detail and quality, and continual learning and innovation. Employees, distributors, and retail customers are urged to contribute ideas on how to improve Dirt Bikes’ products and service. Products and Services Dirt Bikes’ founders realized that the most popular dirt bikes were foreign brands and wanted to capitalize on their proximity to the dirt bikes racing circuit and market in the United States. Carl and Steve hoped they could develop bikes that performed and looked better than the competition by using the best custom parts available. Dirt Bikes does not hesitate to use quality components from all over the world. The engines for Dirt Bikes are Rotax engines from Austria and tires are from Dunlop, but many of their parts, such as shock absorbers, front wheel forks, exhaust pipes, and headlights, are from the United States. Dirt Bikes makes its own frames, shaping them to give them the unique spirited style for which the company is noted. The company’s parts and service business accounts for about 15% of its total revenue. Manufacturing and selling dirt bikes is a complex business. Dirt bike racing has many forms, including racing specifically for different size bikes, for short distances, long distance, and even for up to six days. Enduro bikes are for cross-country racing and motocross bikes are specially designed for racing in an enclosed dirt course that can consist of a variety of terrains; uphill, downhill, corners, jumps, and so forth. Dirt Bikes currently produces four models: the Enduro 250, the Enduro 550, the Moto 300 and the Moto 450. The two Enduros are endurance racers, while the Motos are for motocross racing. All four are very modern, with such technology as both kick and electric starters, steering stabilizers, and liquid cooling. The large majority of these bikes are sold in the United States for between $3,250 and $9000 retail. (The Enduro 250 retails for $3250, the Enduro 550 retails for $7600, the Moto 300 retails for $4295 and the Moto 450 retails for $8995.) Dirt Bikes has appealed primarily to serious trail and Enduro riders, although it is making inroads into the motocross market. Sales and Marketing Dirt Bikes does not sell directly to retail customers, relying on a network of 40 distributors concentrated in the Western and Midwestern United States. A small percentage of Dirt Bikes are sold in Europe using independent distributors that sell other brands of dirt bikes and motorcycles as well as Dirt Bikes. Dirt Bikes’ motorcycles, parts, and service, including warranty repairs, can only be obtained through an authorized Dirt Bikes dealer. All motorcycle and spare parts sales, shipping and set-up must be handled by a certified dealer. If a potential customer lives more than 50 miles from the nearest authorized Dirt Bikes dealer, the customer can purchase a Dirt Bike or Dirt Bike parts through a certified independent motorcycle dealer. Retail customers can purchase spare parts directly from Dirt Bikes only by verifying that they live more than 50 miles from an authorized Dirt Bikes dealer. Dirt Bikes’ sales department works closely with Dirt Bikes’ distributors. One of its key responsibilities is to aggressively promote Dirt Bikes at dirt bike racing and other events. Many Dirt Bikes employees are dirt bike racing enthusiasts themselves. Several are official company racers representing the company in dirt bike racing competition. Dirt Bikes recently established a Dirt Bikes USA Owners’ Group to promote stronger relationships with customers and to make it easier for them to share their Dirt Bikes USA experiences. Dirt Bikes also advertises in magazines devoted to motorcycle racing and dirt bikes. It uses a small public relations firm to place articles about new company products or racing victories in these magazines. Dirt Bikes also pays for ads in these publications. Sales data is shown in Tables 3 and 4. Selected Financial Data The data tables at the end of this document provide three worksheets containing Dirt Bikes financial data for you to review: * Income statement data from 2012-2014 (Table 1)* Summary balance sheet from 2012-2014 (Table 2)* Annual sales (units sold) of each Dirt Bikes model between 2010 and 2014 (Table 3)* Total domestic vs. international motorcycle sales (units sold) between 2010 and 2014 (Table 4) The income statement and balance sheet are the primary financial statements used by management to determine how well a firm is performing. The income statement, also called an operating statement or profit and loss statement, shows the income and expenses of a firm over a period of time, such as a year, a quarter, or a month. The gross profit represents the difference between the firm’s revenue (or sales) and the cost of goods sold. The gross margin is calculated by dividing gross profit by revenues (or sales). Net profit (or loss) is calculated by subtracting all other expenses, including operating expenses and income taxes from gross profit. Operating expenses are all business costs (such as expenditures for sales and marketing, general and administrative expenditures, and depreciation) other than those included in the cost of goods sold. Net margins are calculated by dividing net profit (or loss) by revenues (or sales). A balance sheet provides a snapshot of a company’s financial assets and liabilities on a given date, usually the close of an accounting period. It lists what material and intangible assets the business owns and what money the business owes either to its creditors (liabilities) or to its owners (shareholders’ equity, also known as net worth). We have included here are only the most important pieces of balance sheet data for you to review. At any given time a business’s assets equals the sum of its liabilities plus its net worth. Current assets include cash, securities, accounts receivable, or other investments that are likely to be converted into cash within one year. Current liabilities are debts that are due within one year. Long-term debt consists of liabilities that are not due until after a year or more. If too much debt has been used to finance the firm’s operations, problems may arise in meeting future interest payments and repaying outstanding loans. By examining a series of financial statements one can identify and analyze trends in the financial strength of a business. When examining Dirt Bikes’ income statement and balance sheet data, pay special attention to the company’s three-year trends in revenue (sales), costs of goods sold, gross margins, operating expenses, and net income (or loss). Pay attention to whether the company’s short and long-term liabilities are growing and whether they exceed assets. If a company has more current assets than current liabilities, it is a sign that it probably has enough working capital to fund investments in new equipment or information systems.The two other spreadsheets present motorcycle unit sales data between 2010 and 2014, which can be used to gauge motorcycle sales. When examining these spreadsheets, pay attention to the trends in sales. This includes the sales trends for each product Dirt Bikes sells, overall sales trends, and the proportion of international to domestic sales. Figure 1 Dirt Bikes USA Organization Chart Figure 2: Sample Bill of Materials Bill of Materials: Moto 300 Brake System Component Component No. Source Unit Cost Quantity Extended CostBrake cable M0593 Nissin 27.81 1Brake pedal M0546 Harrison Billet 6.03 2Brake pad M3203 Russell 27.05 2Front brake pump M0959 Brembo 66.05 1Rear brake pump M4739 Brembo 54.00 1Front brake caliper M5930 Nissin 105.20 1Rear brake caliper M7942 Nissin 106.78 1Front brake disc M3920 Russell 143.80 1Rear brake disc M0588 Russell 56.42 1Brake pipe M0943 Harrison Billet 28.52 1Brake lever cover M1059 Brembo 2.62 1 Table 1: Consolidated Statements of Income (in thousands) 2012- 20142014 2013 2012 RevenueNet sales 60,144 64,063 61,529Cost of goods sold 45,835 43,155 41,072Gross profit/(loss) 14,309 20,908 20,457Gross marginOperating expensesSales and markering 4,733 4,537 3,944Engineering and product development 3,141 2,992 2,339General and administrative 1,913 1,601 1,392Total operating expenses 9,787 9,130 7,675Operating income/loss 4,522 11,778 12,782Other income/expenseInterest income/expense 1,747 175 80Other income/(expense) (6,254) (2,914) (3,080)Income before provision for income taxes 15 9,039 9,782Income taxes 1,459 1,729 535Net income/(loss) (1,444) 7,310 9,247Net margin Table 2: Summary Balance Sheet Data from 2012 to 2014At December 31 2014 2013 2012Current assetsCash and cash equivalents 6,994 7,197 6,891Accounts reveivable 13,083 12,981 12,872Inventories 6,315 5,931 5,843Total current assets 26,392 26,109 25,606Property plant, and equipment 36,920 34,515 32,002Other assets 1,765 1,903 1,834Total assets 65,077 62,527 59,442Current liabilitiesAccounts payable 8,943 8,694 7,592Accrued expenses and other liabilities 10,877 9,382 8,654Total current liabilities 19,820 18,076 16,246Long-term debt 9,772 9,338 8,890Total liabilities 29,592 27,414 25,136Shareholders’ equity 35485 35113 34306Total liabilities + shareholders’ equity 65,077 62,527 59,442 Table 3: Sales By Model 2010-2014 Sales by ModelModel 2010 2011 2012 2013 2014Enduro 250 1201 1663 2291 2312 2195Enduro 550 2832 3290 3759 4078 3647Moto 300 1755 1932 2454 2615 2627Moto 450 463 598 661 773 823TOTAL 6251 7483 9165 9778 9292 Table 4: Domestic Versus International Sales Domestic vs. International Sales2010 2011 2012 2013 2014Domestic 5723 6843 8254 8889 8530International 528 640 911 889 762TOTAL 6251 7483 9165 9778 9292% International 8.4% 8.6% 9.9% 9.1% 8.2%

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