Careers at Specialized Bicycle
Specialized Bicycle Components’ mission is to be the brand of choice for discerning riders.
Upon graduation from college in 1974, Mike Sinyard sold his Volkswagen bus for $1,500 and set off on a bicycle tour of Europe. While in Milan, he met a woman who knew some Italian manufacturers of classic racing and touring bikes and bike parts. He met up with these companies and learned that they were happy to have him sell their components back in the U.S. He was pleasantly surprised.
Sinyard knew that high-end bike parts were in short supply in America. So he used the rest of his trip money to purchase $1,100 worth of the equipment. When he returned home, he wrote up a catalog listing the products, and soon sold his entire inventory to local bicycle shop owners – making a profit of $200. The store owners were eager for more, but Sinyard lacked the capital for more purchases.
He solved his problem by requesting that they pay for the parts in advance. He then founded the company Specialized Bicycle Components to import and distribute the items. The next few years he saw significant success. He then decided that his firm could use its experience to manufacture its own products. In 1976 he unveiled its first offering, a tire for the touring market.
The next couple of years saw the introduction of Specialized’s first bicycles, the Sequoia (a touring bike) and the Allez (a road racing bike). In 1981 the firm released the Stumpjumper, the first major production mountain bike. It sold out rapidly, and inspired many imitators. Specialized continued to grow in the ensuing decades. In 2011 Taiwanese firm Merida Bikes purchased a 49% stake.
Business model of Specialized Bicycle
Specialized has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at consumers who like to ride bicycles.
Specialized offers four primary value propositions: innovation, accessibility, risk reduction, and brand/status.
The company has embraced innovation from its start. Its history of “firsts” includes the following:
- The first foldable clincher tire, the Turbo
- The first major production mountain bike, the StumpJumper
- The world's second mass-production carbon fiber mountain bike, the Epic
The company creates accessibility by providing a wide variety of options. It sells a broad range of bike-related products, including bicycles, components, and cycling apparel for both riders and cycling enthusiasts. They are available in multiple categories, including mountain, road, transport and fitness, path and gravel, park and street, children, and equipment.
The company reduces risk by maintaining high quality standards. It operates a mountain bike racing team, whose members test its equipment before it is sold to the general public. It also runs a program called “Test the Best“, which takes its bikes on tour across the U.S. so that consumers can try them out and question its trained staff about sizing, build options, etc. Customers can also try out cycling apparel and gear such as shoes and helmets.
The company has established a powerful brand due to its success. It is one of the biggest bicycle manufacturer brands operating in the U.S., alongside Giant Bicycles and Trek Bicycle Corporation. Its StumpJumper mountain bike is considered so unique that an original model is currently displayed in the Smithsonian Institution. Its Rockhopper mountain bike is currently used by the London Ambulance Service to equip their Cycle Response Units, which travel in highly-trafficked areas of the city. Lastly, it has won a number of honors, including a BRAINy Award for “Company Advocate of the Year“ from Bicycle Retailer (2011) and a “Bicycle Friendly Business“ Gold Award from the League of American Bicyclists (2010).
Specialized’s main channels are retailers, detailers, and catalogs. The company promotes its offering through its website, social media pages, advertising campaigns, and sports sponsorships.
Specialized’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees. The company’s website provides answers to frequently asked questions and access to an e-mail newsletter.
It also allows customers to register their bike so that the firm’s employees can contact them should an issue with the product arise, and also provide information on new products, special events, and promotions. That said, there is a personal assistance component in the form of phone and e-mail support.
Specialized’s business model entails designing, developing, and manufacturing its products.
Specialized has formed a number of strategic alliances over the years for varying purposes. These include the following:
- The company is a founding member of the World Federation of the Sporting Goods Industry Bicycle Labor Pilot, through which it collaborates with a group of major brands and suppliers to create shared standards, tools and a supplier database via theFair Factories Clearing House.
- The company works with the Bicycle Products Supplier Association, Sustainable Apprel Coaliation, and Outdoor Industry Association to help generate recommendations to the industry on best practices in fair labor practices and sustainability.
- The company has partnered with brands that have sponsored its sports-related initiatives; for example, Mountain Dew sponsored the Specialized BMX program and Subaru sponsored its Friends O’ Trails program, which provides instruction on off-road biking.
- The company has partnered with art galleries in San Francisco and Minneapolis to showcase the design of its bicycles as part of exhibits on modern sporting goods.
Specialized’s main resources are its human resources, namely the engineering employees that design, develop, and manufacture its bikes and the customer service employees that provide support. It also relies on a network of suppliers for certain parts.
Specialized has a value-driven structure, aiming to provide a premium proposition through frequent product enhancements.
Its biggest cost driver is likely cost of goods sold, a variable expense. Other major drivers are in the areas of product development, sales and marketing, and customer support/operations.
Specialized has one revenue stream: revenues generated from the sales of its bicycles, bike components, accessories, and sports apparel.
info: Michael Sinyard earned an undergraduate degree in Business Administration at San Jose State University. He previously served as a sales employee at Wilgo Corporation.
info: Michael Abbott earned a B.S. in Accounting at Drexel University and an MBA in Finance at Saint Joseph’s University. He previously served as a General Manager at Specialized and as the Chief Operating Officer and Chief Financial Officer of Burton Snowboards.
info: Slate Olson earned a B.A. in Psychology and Marketing at the University of Oregon. He previously served as the Chief Marketing Officer of Rapha Racing Limited, as a Brand Communications Director at Nike, and as an Account Director at SBG Enterprise.
info: Ron Pollard earned an undergraduate degree at San Francisco State University and a graduate degree at Stanford University. He previously served as the Director of Operations and Technologies at Symantec.
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