Case Study: Bang On Bikes Business Plan General Information You have recently been appointed as the.

Case Study: Bang On Bikes Business Plan
General Information
You have recently been appointed as the General Manager of Bang-On-Bikes Pty Ltd
having been a store manager for the past two years. Bang-On-Bikes Pty Ltd is a 10 store
retail chain located in Brisbane. Bang-On-Bikes is the leading bicycle retailer, catering to
the growing need for athletes, recreational riders and of road cycling activities greater
Brisbane area.
The range includes top brand high speed road racing bikes, high end recreation flat bars,
mountain bikes, children’s bikes and trick bikes and scooters together with the recently
added e-bikes (electric motorized bikes) and semi disability motorized and non-motorized
tricycles has positioned Bang-On-Bikes as a leader in bicycles retailing in Australia. BangOn-Bikes has grown over the past five years from a single store in Caboolture to the
current chain. Bang-On-Bikes prides itself on superior after sales service which has been
a key reason for the continued growth in sales and corresponding profit increases. Today
Bang-On-Bikes employs over 100 staff.
Bang-On-Bikes Pty Ltd is a proprietary limited company (ACN 12 234 456 67) registered
with the Australian Securities and Investment Commission. The registered address is with
Bang-On-Bikes’s solicitors (Not-Dodgy-Bros, 123 Queen Street, Brisbane, QLD 4000) and
the principle place of business is 30 Herschel St Brisbane QLD 4000.
Corporate details

Board
Members

General
Manager

Sales Manager

Administration
Officer

Human
Resources
Officer

Finance
Manager

Operations
Manager

Store Managers
( x 10)

Accounts Clerk

Store Staff

CE

O

 (World famous cyclist) Gaurang Bangon, the CEO, has asked you to start planning for a
major review of the organisation’s Business Plan
Strategic plan goals
The organisation’s strategic goal is to grow the business and increase business profits
over the next three years by expanding then number of stores from 10 to 20 and expand
from its Queensland base into NSW .
Operational plan goals
Bang-On-Bikes will:
● commence operation in regional NSW within 12 months
● Open 10 new stores in Queensland and NSW
● increase sales by 100% in the next three years by maintaining or improving each
stores sales and open and fully operate new stores..
Background
The owners of the business are not risk takers. They are aware that their ongoing success
is the result of a small, experienced team, close ties with the cycling community and a
reputation for reliable, quality road racing equipment.
Moving forward, their vision for the company is to retain those strengths and core values
through any expansion process.
The strategic and operational plans were developed as a result of external market
research, indicating high pricing for professional equipment and a fractured market with
no other bicycle retail chain present in northern NSW. Bang-On-Bikes were looking for
their next growth opportunity and saw that this was an ideal opportunity to be seized
upon.
It was also felt that the company was now sufficiently stable and experienced, and in a
financial position to expand the business without risk to their current financial stability or
reputation.
Reports from the Sales Manager indicated that sales have been lost because some
customers living outside of Bang-On-Bikes’ catchment area, will often engage with the
store via phone or internet but then buy from a local supplier for delivery and after sales
service convenience even though they almost always pay a higher price.
There is a large and growing cycling community in the Northern NSW region therefore this
became a motive to expand operations for both financial and customer service reasons.
There is also an opportunity to connect with buyers directly through an ecommerce
platform where high end users can basically custom design their bikes and have them
delivered as a kit or for an extra fee, assembled & ready to ride. This strategy will be
considered at some time in the future.
Proposed strategy
Bang On Bikes plans to use its already highly trained store sales personnel to open new
stores. Some will be promotes to Store Manager status and other existing Store
Managers will be moved into the new locations with their 2ICs taking their place as
manager at the established store. Some staff will have to commute further distances
until local staff can be hires and trained.
Bang on Bikes has never undergone such a massive expansion before but somehow they
believe that this strategy will work flawlessly.
Financial information

Annual sales

Current sales

Estimated sales (Yr 1)

$15 million

$18 million

Annual net profit

Current net profit

Estimated net profit

$1.0 million

$1.2 million

Increased costs

Loan repayments

Operating costs

+$200,000 per annum

+$1.4 million

Administrative costs

Labour costs

+$100,000

Nil

General information
The company communicates with employees via regular email updates, newsletters and
memos.
The company provides information regarding policies and procedures through employee
manuals that are kept in each store. Head Office-based staff can access copies of these
manuals in the office.
All staff are strongly encourages to join and actively participate in local cycling clubs and
are trained in first aid and bike repair.
Head office employees work very closely together as a coherent and motivated team.
They are generally positive about the organisational direction and respond well to change.
Store managers and staff are currently happy with the work environment, as they enjoy
working as part of an active engaged team.
The Sales Manager typically leaves the Store Managers alone to do meet their budget but
is typically hands on when requested by the store manager and especially with new
products and training.
Store Staff are highly trained and most of them could run a store at a pinch and certainly
with a small amount of additional training. Most though are happy doing what they are
doing as most are athletes and need time for training.
Al Store Staff are members of the appropriate union. They have, in the past, done their
best to block a change from award wages to individual contracts from being
implemented, even going to the lengths of threatening strike action and getting the Union
involved to assist in resolving the issue.
Summary of current employee populations
Head office employees & Store Managers
● covered under individual contracts
● salary range $32,000 – $75,000 annum
● small team of mainly male employees, with a wide range of ages
● many opportunities to participate in learning and development programs due to
management support, however, have shown little interest
● high employee engagement scores, citing team work and opportunities have
contributed to the company’s success as real motivators.
Store Staff
● covered by an award
● salary $35,000 per annum
● employee demographics are all 75% male 25% female employees, aged 20–40.
● few opportunities to participate in management learning and development
programs due to being on involved in cycling activities in spare time
● Some employees report stress issues due to high sales budgets
● low employee engagement scores, citing pay as an issue however staff seem
motivated and content in the activity of their jobs.
● currently experiencing low turnover
● history of (1) significant industrial disput