Between 1971 and 1979, Bridgestone built almost 1 million bikes for Schwinn, or roughly about 4.5 times the number of bikes Bridgestone-Japan built in during the Bridgestone years of 1984-1994. Bicycle manufacturers such as Schwinn did not begin manufacturing their own frames until the late seventies. Bridgestone had been producing its handbuilt Paramount line of racing and touring machines, with elegantly carved and hand brazed joints, since 1938, and these frames were regarded as among the best built anywhere in the world (Muller, 2007). However, this type of early manufacturing process never evolved into mass production.
The present manufacturing process greatly differs from the early processes utilized by companies such as Schwinn. In the present, frame manufacturers buy tubing from one source, frame fittings from others, and then fabricates a frame. Some companies outsource frame subassemblies and bicycle painting to other countries where the labor is cheaper. This differs greatly from the manufacturing process where all of the operations to produce a frame were manufactured in-house. The early manufacturing process consisted of making the tubing, the frame fittings, and joining the tubes and fittings into a frame and painting it. The only products the early manufacturers bought were coils of 1010 steel strip, as compared to buying separate pieces for each segment of the bicycle. This present manufacturing process will bring additional jobs to poorer countries, that will benefit from the domestic manufacture of bicycles. This outsourcing is positive because many of these poorer countries rely on bicycles as their primary means of transportation.
Projections of the Future Usage of the Bicycle
To date, the bicycle manufacturing industry remains an extremely competitive industry, and one in which larger countries such as the United States are the primary contenders. However, the market is changing, and there are other areas of the bicycle industry in that have become the focus. For example, there are markets in less-developed areas that would benefit from the manufacture of bicycles. Research in the industry indicates that other growing countries, such as Latin American countries, are becoming more dependant on reliable, less-costly means of transportation. Since most of these countries are small, there is not a great need for huge recreational vehicles or trucks. In fact, since many people in these countries are only commuting short distances, a bicycle is a perfect solution. Thus, it is in bicycle companies' best interest to begin working toward creating a new market share in these countries. Since the majority of people in developing countries do not have the funds required to spend on a luxury-type of motor bike or bicycle, a basic model that offers all the necessities is ideal.
The future of the bicycle will evolve into models with small motors, such as mopeds, scooters, small motorcycles, which are most often seen in urban areas and developing countries. Other motorized models, such as motorcycles, and large street bikes, most often seen in North America and Europe have already emerged, based on the early models of the bicycle. Standard bicycles that are most often used as a means of low-cost transportation will continue to exist, along with slightly varied updated versions. Performance bikes, most often used for responsive handling, rapid acceleration and high top-end speeds will also evolve. Touring bikes, most often known for their comfort features and accessories, are most often seen in the United States with baby boomers. Finally, the traditional bicycle will turn into the custom motorcycle designs, most often seen in the United States, among the wealthier classes and less popular outside the United States.
Other manufacturers, such as Japanese companies, already offer these types of bicycles in developing countries. These bicycles are fairly cheap for them to manufacture, develop, and produce, and as a result, they can sell them for lower prices. Such bicycle makers are beginning to saturate the industry with many different styles and models, which sell for a significantly lower price. Japanese bicycle makers are additionally seen as a threat because of their capability to make quality bikes at a significant lower manufacturing cost associated with production. In addition, many other low cost producing companies from other parts of the world exist as well. A review of the research indicates that in the future, this competition will increase as companies will create a slightly higher quality bicycles and sell in these developing countries for a lower prices. While at first it may appear that bicycle companies are not making a profit, after the consumer becomes aware of the quality at the same low price, the lost profits will be made up for in an increased volume. Although this increased volume may take a few years until it is actually verified and reported, this is a risk that would benefit bicycle companies as a whole in the very near future. The motor cycle industry is a highly competitive one in developed countries, such as the United States, Germany, France and the United Kingdom.
Finally, any bicycle company competing in the manufacturing process must broaden its horizons if they are to remain competitive. New focus must be driven into innovative products that can be manufactured with the technologies. Competitive categories for newly manufactured bicycles will center on the aspects of performance, styling, breadth of product line, image and reputation, quality of after-the-sale service, and price. New products must also be researched and developed, and bicycle companies would also benefit by expanding out farther than their target population, as competitors will attempt to gain some advantage by securing this population. Finally, with the combination of new technologies and old manufacturing processes, the bicycle industry will continue to operate with no limits.
In summary, the financial performance of the bicycle industry is strong, as outlined above. This industry consistently has increasing revenues and bicycle sales, and maintains a consistent growth percentage every year, whereas the growth rates of other manufacturing industries fluctuate on a yearly basis. The number of bicycle users has steadily grown every year, with a few very infrequent exceptions. Finally, the long-term success of the industry, its reputation and brand recognition held by several bicycle manufacturers will ensure its strong financial performance, regardless of the new technological offerings.
1865 - One of the earliest bicycle models. Source: Bicycle Museum, 2007
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