Shimano Case Analysis Essay

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Shimano is a manufacturer of mechanical bike components for mid- to high-end road bikes. They do not make frames and they do not sell directly to customers via retail stores, but rather to bike manufacturers that want to use Shimano’s components. They have been, by far, the leader in their industry for years. They netted around a 14 percent profit margin, dwarfing that of almost all bike manufacturers, and did so using their many competitive advantages over rivaling brands. Shimano’s Core Competencies Provide access into wide variety of markets One of Shimano’s key strengths was their ability to tap into a wide variety of markets, and they showed this in a number of ways. Shimano’s components could be used with virtually any road…show more content…
Difficult for competitors to imitate Lance Armstrong’s relationship with Shimano also worked in Shimano’s favor. It was well known that a strong majority of the components on Armstrong’s racing bike were made by Shimano. This created a brand image for Shimano that was nearly impossible for any other brand to imitate, largely due to the fact that there are very few other high profile cyclists in the world. Several manufacturers such as Cannondale, Trek and Specialized made attempts to make their own components, but few found any major success. This was because homemade components turned-out to be far more expensive than Shimano’s products. The difficulty to imitate created a competitive edge deriving from their attitude towards constant progressive innovation. Resource Assessment Shimano’s employees are the most valuable resource that the company possesses. Out of their 5,400 employees, one quarter of them are assigned to research and development; however R&D alone is not where the value originates. Cooperation between the production and marketing teams provides the company with an intangible asset that fuels Shimano’s innovation. The collaboration between these departments is extremely valuable to the company’s guiding principle to inspire and strive for continuous improvement. This is a rare philosophy was not common amongst manufacturers in this industry. Shimano exploited this
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