Case: The Plant Allocation Puzzle
1. What is the competitive environment facing EDC?
In terms of the competitive environment facing EDC, Ann realizes that not only is the
number of competitors increasing, but the nature of the demand for bicycles is changing as
well. The U.S. mass market bicycle sales is expected to grow by only 2% a year, while the
Asian market for those same bikes is nearly doubling on a yearly basis. This growth scenario
is likely to lead to thinner margins and a lower ROI in the U.S. for bicycle sales. Additionally,
EDC's foreign sales performance has been flat the last two years, likely the result of not
being able to compete on price given their current U.S. distribution channels in place. EDC
has higher wage rates, material costs, and distribution costs than their competitors in Asia
and other foreign markets. Both of Ann's vice-presidents agree that EDC must move quickly
to capitalize on the growing Asian market before......
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Approximate Word Count: 733
Approximate Pages: 3 (250 words per double-spaced page)
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