1. sports
2. motorcycling

Dirt Bikes USA
Semester Case Study
Chris Russell
Jianan Li
Tommy Nguyen
Dirt Bike USA Case Study | 1
Dirt Bikes USA was founded in 1993 by Carl Schmidt and Steven McFadden. Based in
Carbondale, CO, Dirt Bikes USA manufacturer off­road motorcycle and equipments.
Chapter 1
Management Overview
Goal and Cultures
In the early 1990’s before Dirt Bikes USA was founded, most of the popular bikes was foreign
brands. As a result, the goal of Dirt Bikes USA was to build bikes that not only competed against
the foreign brands, but also accelerate it in both design and performances. Looking to compete
with foreign brands, not only did it follow the business professional attitude culture, but the
company also maintain a sense of family, teamwork, quality work and most importantly attention
to detail.
Product and Services
Dirt Bikes USA manufacturers a wide array of bikes, with Enduro 250, Enduro 550, Moto 300
and Moto 450 there is a perfect bike for each customer. In addition, Dirt Bikes USA also sells
bike parts and provide maintenance/repair service for customers. However, customers do not
simply go to Dirt Bike to purchase their bikes, but instead a large distributor network is setup in
the Midwest and western part of the United States that offers them dirt bikes. In addition to selling
dirt bikes in the United States, Dirt Bikes USA also has a small presence in the Europe Union via
distributors. While Dirt Bikes USA primary business strategy is to sell bikes, it also puts
resources in bike events such as racing day and has ads in newspapers and magazines to
promote and market their business.
Employees
Dirt Bikes USA is still privately owned by its founders; with Carl serving as CEO and Steven
serving as President and COO (Chief Operating Officer). In the company department of Design,
Engineering and production, it has a workforce of around 120 employees, including 3 full time
industrial designers and other various employees with different duties. Excluding the founders,
there are three other employees in the management level for the Production, Administration and
Sales & Marketing division of the business.
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Below are the breakdown of Dirt Bikes USA employees
Department
Employee Headcount
Parts
4
Service
10
Shipping & Receiving
5
Marketing & Sales
6
Administration
10
Corporate
5
Information Systems and Technologies
One of the most important aspects of Dirt Bikes USA is a system to keep track of production,
marketing and sales cost; in addition, this system should also track each sale employee's
performance and other overhead cost associated with the business. When sales are made, it
should also be able to tell the best and worst selling product and what the production goals
should be. Lastly, there should also be a database that keeps track of employee payroll,
information, and their schedules.
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Chapter 2
Analyzing Financial Performance
After analyzing the financial performances for the years 2003­2007, the best performing bikes
are Enduro 550. The Enduro 550 ended their sales from 2003­2007 with a total of $17,606. The
worst performing bike during that time span is the Moto 450 with a total of $3,318.
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The proportion of the Dirt bikes sales are drastically higher domestically then it is internationally.
The numbers for the domestic sales are in the millions every year whereas the international
sales are only in the hundred thousand. The international sales did grow relative to the domestic
sales but obviously by not the same sum of money.
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Consolidated
Statements
of Income (in
thousands)
2007
2006
2005
Net sales
60,144
64,063
61,529
Cost of goods sold
45,835
43,155
41,072
Gross profit/(loss)
14,309
20,908
20,457
Gross margin
23.8%
32.6%
33.2%
Sales and marketing
4,733
4,537
3,944
Engineering and product development
3,141
2,992
2,339
General and administrative
1,913
1,601
1,392
Total operating expenses
9,787
9,130
7,675
Operating income/loss
4,522
11,778
12,782
Interest income/expense
1,747
175
80
Other income/(expense)
(6,254)
(2,914)
(3,080)
Income before provision for income taxes
15
9,039
9,782
Income taxes
1,459
1,729
535
Net income/(loss)
(1,444)
7,310
9,247
Net margin
­2%
11%
15%
Revenue
Operating expenses
Other income/expense
Sales over the 2005­2007 sales period are slowly growing over the years. The cost the goods
sold to revenues are decreasing but they lose less year by year. Each year the gross and net
Dirt Bike USA Case Study | 6
margin decreases drastically. The operating expense decreases each year starting slowly and
then it drops a lot but 2007. The company is not heavily in debt. Over the years the company
steadily increases their profit and in 2007 they are actually making money. No the company does
not have sufficient asset to start developing for new products and informational systems but if
they keep up what they are doing, they will have enough over the next couple of years.
Chapter 3
Analyzing Competitive Strategy
Activities Creating the Most Value
Out of all the activities that Dirt Bikes USA are doing the one that makes the most money is the
distribution of the bike as a whole. Our repairs would be the activity that generates the second
most value.
Providing Value to Our Customers
We provide value to our customers by offering them many different models of dirt bikes to
choose from. You can choose the type of dirt bike you want depending on the features you want
like an electric starter or a liquid cooler. A second way we make sure the customer gets the
most value from their dirt bike is that we have styles of dirt bikes that are designed for different
terrains.
Our Competitors/Competitive Forces
Our main competitors are other dirt bike companies like Suzuki, Yamaha, and Kawasaki. We
have an advantage over those competitors because we can offer you a better value, since when
you buy a Dirt Bike USA dirt bike you aren’t paying for the name brand. The competitive forces
that affect us are advertising strategies and overall product advancement, because the name
brands can advertise more, and they have more resources to advance their product faster than
us.
Our Competitive Strategy
Our Main competitive strategy should be using the fact that we can offer dirt bikes at a lower
price than other name brands. This will make up for the fact that they aren’t as widespread as
other companies.
Information Systems That Support Our Strategies
For our competitive strategy the information system we will use will keep track of production,
marketing, and sales cost. It will track every employee’s performance, be able to tell which
products sell the best/worst, and it will have a database that will keep track of employee payroll,
and other information like their schedules.
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Chapter 4
Web Site Privacy Policy
This privacy notice discloses the privacy practices for Dirt Bikes U.S.A. This privacy notice
applies solely to information collected by this web site. This website will notify you of the
following:
∙ What personally identifiable information is collected from you, the browser, through the
web site, how it is used, and with whom it may be shared with.
∙ What choices are available to you regarding the use of your data?
∙ The security procedures in place to protect the misuse of your information.
∙ How you can correct any inaccurate information.
Information Collection, Uses, and Sharing
∙ We are the main owners of the information collected on this website. Only we have the
access to collect information that you voluntarily give us via email or direct contact from you. We
will NEVER sell or rent this information to anyone.
∙ We will use your information to respond to you, regarding the reason you contacted us.
We will not share your information with any third party outside of our organization, other than as
necessary to fulfill your request, e.g. to ship an order.
Unless you ask us not to, we may contact you via email in the future to contact to tell you about
specials, new products or services, sales, or changes to this privacy policy.
Your Access to and Control over Information
You may opt out of any future contacts from us at any time. You can do the following at any time
by contacting us via the email address or phone number given on our website:
∙ See what data we have about you, if any.
∙ Change/correct any data we have about you.
∙ Have us delete any data we have about you.
∙ Express any concern you have about our use of your data.
Security
We take precautions to protect your information. When you submit sensitive information via the
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website, your information is protected both online and offline.
Wherever we collect sensitive information, that information is encrypted and transmitted to us in
a secure way. You can verify this by looking for a closed lock icon at the bottom of your web
browser, or looking for "https" at the beginning of the address of the web page.
While we use encryption to protect sensitive information transmitted online, we also protect your
information offline. Only employees who need the information to perform a specific are granted
access to personally identifiable information. The computers or servers in which we store
personally identifiable information are kept in a secure environment.
Dirt Bikes U.S.A. should collect as much data about what the customer’s views on the website
so that when the company analyzes what customers are more interested in, so that they can
advertise what customers want and not advertise useless products. How much time and activity
a viewer spends on a page can tell analyst how to do their jobs correctly. The data that they get
from the website is very precious because customers are who run the company. Without them
there wouldn’t be a Dirt Bikes U.S.A. Problems raised by collecting personal data may cause
and alert to the users. People are afraid that they will receive a boatloads amount of spam mail
or unwanted advertisement in their mailbox.
Yes, Dirt Bike’s U.S.A. should use cookies. It is the most efficient way in receiving customer data
and also the fastest. Most customers will not voluntarily go out of their way to fill out surveys
unless there is some sort of incentive. The advantages of using cookies is that with the data the
analyst receive, they can easily figure out how to structure their websites and give a better idea
to the company on what their next move can be. Joining TRUSTe will give their privacy policy a
standard and a more reliable way of collecting data from customers with a more trusted data
collecting company. It may be a good idea to conform to P3P standards because it is a basic
protocol intended to use the information they collected from web browser users. Giving the
customers the option to Opt­out is a better idea for businesses because it gives users the option
to receive mail or not. The Website statement is the most important message to customers,
letting them know what they are going to get themselves into, whether it be good or bad.
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Chapter 6
Redesigning Customer Database
Dirt Bike USA Case Study | 10
Mock up of Reports
Dirt Bike USA Case Study | 11
Chapter 7
Internet Tools
Various internet tools could help employees at Dirt Bikes, for example, CRM (Customer
Relationship Management), communication tools (ex. Email, Instant Message, Video Chat), File
Exchange (Dropbox, FTP), Knowledge Based (KL), VPN and most importantly the internet (ex.
accessing various websites)
Tools
Department
Benefit
CRM
Sales & Marketing
Allow optimize workflow with customer
Communication
Tools
All
Enables employees to efficiently communicate
from any part of the world.
File Exchange
All
Lets people to easily share data
Knowledge Base Production
Allows for better technical troubleshoot and see
KB for past experience to also save time
VPN
All
Allow employees to connect to internal network
from anywhere
Internet
All
Lets people easily access different information
The internet tools above have its own ways to achieve its goal to help employees at Dirt Bikes.
The Sales & Marketing Department would use the CRM system to allow employees to work with
clients efficiently, it would easily show opportunity for Dirt Bike, open invoice for orders, and also
allow the management of sales data. Furthermore, Communication Tools such as Instant
Messenger, allows employees across the company to communicate instead of having an actual
meeting; there are different means in communicating like, IM for quick message, Voice Call for
more formal conversation and lastly, Video Call for meeting with other employees or even
clients.
Furthermore, File Exchange allows different department or employee to easily share files, as a
result the cost of physical media (ex. USB Drive and CD/DVD) are reduced. As it turns out,
Knowledge Base is also important for the Production team, since if they have any issue or
problem; they can easily refer to the Knowledge Base to quickly resolve their issues. All
employees would also benefit from VPN and the Internet, since VPN allows employees to easily
connect to the Dirt Bike network to access various information that may only be available within
the network; the internet would also allow everyone to easily research on various information
they need.
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Intranet
Intranets is basically a internal portal, it allows computer to connect and obtain information, it’s
very important for employee, because it allows them to view information about the company or
department. With the Intranets, the Sales and Marketing department could benefit from it,
because it allows information and numbers to be shared. For example, the intranets would show
business information about various clients or marketing number for the region. As for the
manufacturing department, they could oversee their output rates and status while the intranet.
Furthermore, in the Human Resources Department, it allows them to update employee
handbook and benefits or even show employee pay period information and their hours.
Let say in the Human Deparment, some information that would be provided by the intranet could
be employee handbook, private policy, benefits, healthcares, timesheet, information about the
employee, pay period and furthermore, job posting.
the intranet could increase efficiency and productivity for that department, because it would
reduce the meet for Human Resource to process and print these documents and it would also
save time and money. It would also allow greater access by employee to these information.
Chapter 8
Developing a Disaster Recovery Plan
Dirt Bikes is located in Carbondale, Colorado, located near Denver and Interstate 70; the
population is 6489 as of 2012. Carbondale is a remote city, as a result emergency responden
may be slower, and power might not be as stable. Since the location is about a mile high above
sea level, it is much colder, as a result average snowfall is between 46” to 69”. These snowfall
could cause damage to building or causing the business to be inoperable, but also under these
extreme condition, power outage could also cause shutdown in the plant.
One of the most critical system would be its production facility, in case fire or any other damage
happen, it would damage the equipment which would be a major disaster. If such disaster
happen, production would stop, and the company would shut down when the remaining stock
are sold, if the production facility is not repaired. Since, you can’t really backup and restore the
facility when it’s damage, it might be possible to build a smaller plant in another location, in case
if the main plan shuts down due to any reason.
Furthermore, when a power failure happens, it could also corrupt the server data, causing the
server to be dysfunctional. A company such as Dirt Bikes could use service such as Linode to
allow the whole server to be hosted elsewhere. So when something bad happens, it would still
be able to access these data. If Dirt Bike decides it wants to host its own server, then it could
use service such as Carbonite to allow full backup of the server. They are both good choose for
Dirt Bike USA Case Study | 13
the business, while Linode allows all the data to be stored off site and also offers fast and reliable
service, it doesn’t offer the same level of access speed as having the server in the actual
business location. While Carbonite allows the local server data to be back up to its cloud, but it
would require business to purchase new hardware if the hardware does fail.
As a result, Dirt Bike should use Linode, because when a disaster hits, all the data would still be
securely stored in Linode server across the world. As a result, these data would be easily
recoverable.
Chapter 9
Improving Operational Excellence: Identifying Supply Chain Management Solutions
We decided to use the internet to search for alternative suppliers for the IMS 3.2 gallon fuel. The
two we researched were motorcycle­superstore.com and xrsonly.com.
Company
Cost
Shipping Cost
Location
Motorcycle­superstore.com
$273.99
Free
Medford, OR
Xrsonly.com
$249.95
$26.39 UPS 3 Day
Hesperia, CA
As you can by our chart, motorcycle­superstore.com is more expensive buy has free shipping.
Xrsonly.com is more expensive than motorcycle­superstore.com when combined with shipping,
so the overall winner is motorcycle­superstore.com.
Two supply chain management software solutions are we found, that would be appropriate for
Dirt Bikes USA are i2 and Logility. I2 offers several plans like Total Plan Management, Total
Channel Management, and Total Supply Management. We believe that Total Supply
Management is best for Dirt Bikes USA because it would really help them keep track of their
supply of parts and materials, so they know when to order new ones and what ones are selling
the best. Logiltiy has solutions like Value Chain Collaboration, Demand Chain Planning, and
Supply Chain Planning. We found that Supply Chain Planning would be the best fit for Dirt Bikes
USA because it will allow Dirt Bikes USA to keep track of the movement and storage of any raw
materials that they have. Out of the two chain management software solutions, we picked the
Supply Chain Planning of Logiltiy because it’s very important for the well­being of the company to
know if they have supplies and where those supplies are.
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Chapter 10
Developing an E­Commerce Strategy
There are both pros and cons of introducing e­commerce to Dirt Bikes USA. By selling
motorcycle Parts online, Dirt bikes USA takes out any commission they would have to pay to
their dealer network, thus saving them money and advertising could reach out across the whole
world, instead of just locally. Some cons would be that they would lose their good relationship
with said dealer, along with any customer recognition and relationships they have built up, and it
would be hassle to figure out the shipping process for the parts. We believe that Dirt Bikes USA
should use e­commerce for selling, advertising, and customer service.
We did some research on solution that Dirt Bikes USA could adopt to pursue ecommerce. We
could use Yahoo’s plan for small businesses which is only $100 a month with a $50 setup fee
and a 1% transaction fee. If we wanted to go with web hosting there is a lot of fairly priced
options like GoDaddy. We would chose GoDaddy’s Economy plan which is only $5 a month for
one website with unlimited bandwidth, 100 GB of disk space and 100 email addresses to use.
This would more than cover that Dirt Bikes USA needs for right now. If we go with web hosting
we would use the open source shopping cart software osCommerce with 2checkout.com as a
default payment gateway. 2checkout.com only has a $49 setup fee with 5.5% commission fee
on sales, and $.45 per sale charge. As you can see from these solutions e­commerce is very
inexpensive.
For Dirt Bikes USA, it would be best to experiment with some of these solutions rather than
choosing one right off the bat. We could start with a simple website being hosted by GoDaddy
that would list all the parts we have for sale along with the information of the supplier that builds
the parts, so the customer could select based on preference. We could then gradually build in
features like user profiles and a forum where people could organize races and talk about their
favorite bikes. If we saw that that e­commerce website was profitable then we had invest in a
partnership with a company that could make us merchandise like Dirt Bike USA Sweatshirts and
car decals. We could also set up online appointments and online technical support.
Dirt Bike USA Case Study | 15
Chapter 11
Identifying Opportunities for Knowledge Management (KM)
Being able to fully describe everything piece by piece about your products is the key to being a
successful salesman. One must be able to answer any question in detail about how their
products perform and function. It is a customer’s job to want a product and know what they are
looking for but it is up to the employees to tell them exactly what they are getting. There are many
purposes for dirt bikes so know what product is good for which situation is important. No
company sells the same product, they may sell similar ones but again, know the smallest detail
can be the difference in making a large sale or no sale at all. People in an organization should
know their competitors from head to toe. Being able to distinguish what your company is better
at and what weaknesses that your company must fix to make it a better company. That goes
along with the competitors’ products and motives. A popular term once said by a gentleman
name Sir Francis Bacon was “Knowledge is Power”. Designers and engineers, product
development specialists, marketing specialists, sales department staff and representatives,
managers would all benefit from knowing more. There is no harm in having more knowledge.
Why go to a coworker to ask a question he may or may not know when you can learn and
answer it for the next person who is curious to what it is. Designers, developers, and engineers
will draft their own designs and share it with people who needs it and the marketing and sales
team would use standard operating procedures to properly give information to customers or
advertisements. A very popular website by the name of http://www.motorcycle­usa.com/ gives
users all the latest news and reviews of the latest bikes which would give the company a upper
hand on what to develop for the future. Also another site by the name of
http://www.rockymountainatvmc.com is useful because it is a dirt bike warehouse that supplies
anything from decals to new shocks. A portal leading to the design and specifications of the dirt
bikes would give a full description to customers what exactly they are going to get for their
money. The job of the portal is to attract customers and from there is where they would have
more questions about the bike itself.
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