WORLD 3 FIRM 7

BIKES

Jessica Parmar (124)

Tanuj Nabar (36)
Virendra Singh Shekhawat
(Rural - 24)
Ameya Rege (51)

Sukriti Sinha (143)

Mihir Anand (3)
Bhakti Doshi (96)
Varun Walvekar
(76)

Board of Directors

Note to Shareholders

Built for riders, by riders

Understand the need for new technology
How to best design bikes for customers satisfaction
Customer is the most important part of business
Our bikes are tough, resilient and long lasting
Dedication to the customer and community,
environment and stakeholders
Company of great ethics and standards
Customers comes first
Quality and customers service are our #1 policy
Thank you for being a proud and loyal customer of
MARVEL

Vision
To be the global promoters,
developers & marketers of quality
cycling products.

Long Term Objectives

To become the market leader and sustain
its position
During first 2 years of business we
managed to be just behind market leader
Managing board aimed to increase the
share holder value (SHV) of the company
more than 60% and market share of 70%
within the taken timeframe
Decision to capture 70% market share was
impractical
Failed to consider or under estimated the
competition
Aimed to develop and maintain highly
skilled and efficient employees and

Mission
To be a profitable
provider of bicycles
that provide value to
our customers through
constant quality &
innovation admired for
performance &
consistency while
delivering an
exceptional customer
experience.

Note to Buyers
Provide product on-time, on-quality and on-cost
Meet customer's needs
Keep production costs down to return customers
savings
Create a small community of employees to conduct
business
Make an environment of admiration, trust, and dignity
Train employees and sell a high enough volume of
products
Keep as many jobs available as possible
Create strong relations with distribution and supplier
partners
Get our products into more stores
Reduce operating costs
Aid the community by supporting other businesses
through supplier relations
Operate in a manner that supports the citizens and
environment in which we work.

Goal Setting
To maximize shareholder value.
To increase production capacity.
To reduce waste, defects &
environmental pollution.
To achieve highest market share
To improve customer satisfaction

Our Products
Adv7
One of a kind Mountain Bike
that includes style, quality and
affordability
Features full suspension, wide
tires, good traction and disc
brakes

Our Products
Quicksilver:
Leisure segment
Named after Pietro
Maximoff, the villain
turned good
Fastest mutant
Represents the fitness
freaks who comprise
our leisure segment.

Our Products
Doraemon:
Kids segment
Named after most
popular cartoon today
for kids
Appeal to that
segment

Our Products
Ultron:
Racer bike
Named after a mutant
with the ability to
wield Aluminum.
Bike frame is made up
of aluminum, with high
weight advantages,
enabling high speed.

Our Products
Sentinel:
Commuters
Named after a breed
of intelligent,
adaptive mutants
In line with value for
money seeking
commuters segment.

Our Products
Baymax:
Kids Segment
Named after the health
robot in Big Hero 6
Named so to
communicate the
health benefits of the
bike to be relatable to
kids

Our Products
Stark:
Adventure Segment
Named after the flamboyant
and brave Iron Man Tony
Stark
Also means strong in
German
Launched in order to
overcome shortcomings of
earlier Adv7 and meet
changing market
expectations

Environmental Analysis
Key points emerging from the
analysis:
Significant strength: product
design.
Significant opportunity: segment
of kids, leisure & commuters
Need to address weakness of
reducing idle time & low capacity
utilization
Threats: demand fluctuation &
predatory pricing by competitors

2009

Objectives and Strategies

Focus: Building a reputable and
trusted brand image amidst consumers
Focus on marketing
Compared the preset advertising
expenditures to the market research
on consumer habits and accordingly
made adjustments
Basic objective: Attracting a high
volume of customers, increasing sales
and minimizing expenditures

Decision Making: 2009

MARKETING DECISIONS
Key focus: Attract a high volume of customers
Medium pricing strategy, so that our bikes were affordable and provided a reasonable profit
margin for both retailers and our business
Consumers are moderately sensitive to the pricing of adventure bikes.
Hence, kept a product price of $2,250
Increased total advertising expenditure to $4,000,000
Increase in price would decrease demand while increased advertising should increase sales
Did not expand advertising budget by a huge amount mainly due to a limited market
demand
Focus: Magazine and television advertising
Maintain consistency by using the carry-over effect
Consistent advertising through one medium to continually attract customers
Based on consumer viewing habits, television and magazine advertising were $1,000,000
and $2,000,000, respectively
Internet advertising: $1,000,000
Public relations: $3,600,000 because of minimal impact on adventure bike customers.
Public relations expenditures on television and magazines were $2,000,000 and $900,000,
respectively and Internet expenditures were $700,000
Analyzing the market and conducting extensive research led to the changes made above
Decreased retailers margin, averaging at 25%

Decision Making: 2009

OPERATING DECISIONS
Planned production: 23,800 units
To not miss any prospective clients
FINANCING DECISIONS
Decided to pay off the initially
raised loan of $1,800,000 entirely
Offered no dividend

Decision Making: 2009

RESULTS:
Shareholder Value: 21.45
Sales: $28,527,188
Capacity Utilization: 69.7%
Gross Margin: 62%
Assets: $7,797,662
Equity: $6,224,432

2010

Objectives and Strategies

Distribution and branding decisions
Allocate cash efficiently towards advertising
and branding to create market awareness
Aim at a conservative marketing strategy
Receive optimum market awareness at
lowest possible expense
Continuing to sell at medium price
Increase sales and use funding efficiently
Launch products in Leisure and Kids
segments

Decision Making: 2010

MARKETING DECISIONS
Launched Quicksilver and Doraemon in Leisure and Kids
Categories respectively priced at $450 at $350 respectively
Increased awareness levels of our adventure bike by
increasing branding to $2,000,000 from $1,000,000
Increased the market price of our adventure bike to $2,300
Advertising expenditures were decreased to $3,100,000,
towards magazines and television advertising
Decreased our public relations costs to $3,000,000
Distribution support to retailers worth $800,000
Provide support to various retailers to better promote our
bikes by displaying it across their stores
Establish a high market awareness and brand image in the
industry.

Decision Making: 2010

OPERATING DECISIONS
Planned Production:
30,000 units (Adv7)
60,000 units (Quicksilver)
40,000 units (Doraemon)
FINANCING DECISIONS
Investor Relations increased from
600,000 to 1,000,000
Dividend of $1 per share

Decision Making: 2010

RESULTS:
Shareholder Value: 37.93
Sales: $63,835,800
Capacity Utilization: 67.6%
Gross Margin: 65% (Adv7), 69%
(Quicksilver), 65% (Doraemon)
Assets: $18,655,785
Equity: $13,956,241

2011

Objectives and Strategies

Maintain performance and
position in the capital markets in
2011
Aimed to sustain advertising
budgets and market awareness
levels to increase sales
Launch new products in Racer
and Commuter Segments

Decision Making: 2011

MARKETING DECISIONS
Maintain a relatively similar budget
Kept our prices at $2,100/bike (Adv7),
$450 (Quicksilver), $350 (Doraemon),
$3,700 (Ultron), $310 (Sentinel)
Distribution support was maintained
from 2010
Distribution support was an even split
between sports, discount and bike
shops at $800,000 each.

Decision Making: 2011

OPERATING DECISIONS
Planned production:
40,000 units (Adv7)
90,000 units (Quicksilver)
80,000 units (Doraemon)
14,000 units (Ultron)
40,000 units (Sentinel)
Maintain quality of 77%
FINANCING DECISIONS
Investor relations were $2,000,000
Gave the same dividend as 2010 (i.e. $1 per share)

Decision Making: 2011

RESULTS:
Shareholder Value: 63.57
Sales: $100,357,965
Capacity Utilization: 59.5%
Gross Margin: 63% (Adv7), 60%
(Quicksilver), 42% (Doraemon), 73%
(Ultron), 47% (Sentinel)
Assets: $36,275,383
Equity: $28,312,869

2012

Decision Making: 2012

MARKETING DECISIONS
Maintained adventure bike price at
$2,100, Quicksilver at $400, Doraemon
was $350, Ultron was $3,700 and
Sentinel was $320
Kept our advertising at $12,900,000 (TV:
$5,000,000, Magazine: $4,500,000,
Internet: $3,400,000)
PR: $11,300,000
Allocated money towards new bikes

Decision Making: 2012

OPERATING DECISIONS
Planned production:
50,000 units (Adv7)
90,000 units (Quicksilver)
120,000 units (Doraemon)
28,000 units (Ultron)
60,000 units (Sentinel)
Kept our quality expenditure at $12,361,970, to save inspection
cost
Resulted in a huge decrease in quality, a drop from 77% to
61%.
FINANCING DECISIONS
Decreased investor relations to $1,000,000

Decision Making: 2012

RESULTS: (After Recession Shock)
Shareholder Value: 51.40
Sales: $63,436,500
Capacity Utilization: 41%
Gross Margin: 67% (Adv7), 60%
(Quicksilver), 49% (Doraemon), 74%
(Ultron), 53% (Sentinel)
Assets: $33,096,278
Equity: $30,056,171

2013

Decision Making: 2013

MARKETING DECISIONS
Kept our prices at $2,100/bike
(Adv7), $380 (Quicksilver), $350
(Doraemon), $3,500 (Ultron), $300
(Sentinel)
Kept our advertising at
$15,000,000
PR: $6,400,000
Did not change distribution support

Decision Making: 2013

OPERATING DECISIONS
Planned production:
63,000 units (Adv7)
70,000 units (Quicksilver)
120,000 units (Doraemon)
2,000 units (Ultron)
45,000 units (Sentinel)
Decreased quality expenditure to $10,855,860
Redevelop our kids bike, naming it BAYMAX, costing $2,000,000
Improved bike style and technology attracted more buyers
FINANCING DECISIONS
Repurchased shares worth $1,787,262
Issued the same value of shares

Decision Making: 2013

RESULTS:
Shareholder Value: 47
Sales: $77,019,968
Capacity Utilization: 47.6%
Gross Margin: 69% (Adv7), 62%
(Quicksilver), 53% (Doraemon), 75%
(Ultron), 53% (Sentinel)
Assets: $45,244,179
Equity: $49,293,828

2014

Decision Making: 2014

MARKETING DECISIONS
Followed a Cost Leadership Strategy
Launched Baymax at $190 in the Kids segment
Kept our prices at $1,300/bike (Adv7), $280 (Quicksilver), $180 (Doraemon), $2,500 (Ultron), $190
(Sentinel)
Lowered television advertising by to $6,400,000, internet to $2,350,000 and magazine advertising to
$3,300,000
Reduced PR expenditure to $6,800,000
These decisions were taken to achieve low awareness for Adv7 and Doraemon which were to be
discontinued
OPERATING DECISIONS
Planned production:
4,000 units (Adv7)
80,000 units (Quicksilver)
80,000 units (Baymax)
5,000 units (Ultron)
90,000 units (Sentinel)
Developed a new adventure bike Stark
Decreased quality expenditure to $10,136,526.
FINANCING DECISIONS
Decreased investor relations to $500,000, in order to save cash
Common objective of increasing shareholders value, while maintaining a stable cash balance.

Decision Making: 2014

RESULTS:
Shareholder Value: 26.13
Sales: $63,978,945
Capacity Utilization: 49.5%
Gross Margin: 52% (Adv7), 39%
(Quicksilver), 11% (Doraemon), 44%
(Baymax), 65% (Ultron), 18% (Sentinel)
Assets: $49,727,147
Equity: $ 49,727,147

Yea
r

Summary of results: 201518

Key Decisions
SH Sales
Capacit Remarks
V

y
Utilizati
on

201
5

Launched Stark at
$1,700 with heavy
advertising & PR
Extra support to dept
store
Sold plant capacity
Raised debt at
$50,000,000
Discontinued Adv7,
Doraemon

7.4
4

$69,349,9
65

90.4%

Due to
sold plants
and lesser
employees

201
6

Increased product prices,

advertising, plant size,
quality and process
expenditure & inspection

3.3
9

$72,262,2
00

92%

Due to
higher
spend on
quality and
process

201

Increased branding and

3.7

$82,215,5

77.2%

Learnings
General:
Do not take decisions without reading all the reports first, at every stage.
A detailed knowledge of Market Scenario helps in winning half the
battle
Be one of the early entrants in each segments to have a first mover
advantage.
Better spend time on offline rollovers and simulations than risk it all in
the online mode.
Strategize keeping the target segment in mind (purchasing power,
requirements etc.)
Calculations in terms of unit costs, lost sales, plant utilization and
efficiency are a must which facilitates proper allocation of resources.
Opinions of all team members matter and proper attention has to be
paid towards every team mates suggestions so team dynamics is a
key take away

Learnings
Marketing
Keep retail margins at a minimum
Price according to the recommendations only
Even if cash Is negative, do not compromise on advertising as sales can help recover cash
Distribution is key aspect in long run.
Advertising has a prolonged effect but it decays over the years.
Finance
Pay off the debt entirely for better shareholder sentiment but can also maintain a healthy debt
equity ratio.
Raise capital by selling shares early
Spending on investor relations and repurchasing shares also helps raise SHV
Operations
Never compromise on quality: Spend more on quality, prevention type expenditures and lower the
inspections
Depreciation is a great expense so be careful while purchasing SCUs
Reduce idle time by more training, fewer employees and just the right amount of plant capacity
JIT can be achieved by lower batch sizes and higher supplier relations.
New Product Development
Follow the perceptual map for product specs and demand from consumers
Keep redeveloping to avoid becoming an old brand with outdated product specs

Thank You