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apexbikeltd_155482_3121755_ApexBikeLtd.BoardmeetingPapers.pdf
BIKE LTD.
Designed for Performance Crafted for Excellence
Board Meeting Report May 16th , 2019
1
This report will present the past and current performance of Apex
Bikes Limited. It will demonstrate how a small company founded
at the foothills of the Rocky Mountains has managed to create a
strong brand based on products known for its excellent
performance. The Company has maintained sustainable growth
over the past years and is planning to continue this steady rise for
the future. North America has proven itself to be one of the most
competitive markets for Bicycle manufacturing in the world.
Despite some ups and downs experienced in the past years I am
confident for the future of the company. Apex Bikes Limited is
fortunate with an exceptional team of hardworking executives
who will continue to lead the company towards its full potential.
EXECUTIVE SUMMARY
$26.01 SHV
4 Products
Vision
The Vision of Apex Bikes Limited is to
become a future market leader for top
quality Bicycles in North America. We aim to
further expand our market share and
steadily increase your shareholder value.
Mission
Our mission is to serve our customers by
producing high end bicycles that allow them
to perform at their best and create
continued sustainable growth for our
shareholders.
$ 3.1M
Profit
2
Figure 1: Apex Bikes Ltd. Shareholder Value
➢ Apex’s SHV has an increasing trend over the years, although the company had little growth over the past 2 years
Figure 2: Apex Bikes Ltd. Gross Margin
➢ A similar pattern can be seen in Apex’s Gross Margin.
FINANCE
ceCE
6.23
12.26
25.46
34.34
30.29
0
5
10
15
20
25
30
35
40
2017.5 2018 2018.5 2019 2019.5 2020 2020.5 2021 2021.5 2022 2022.5
G M
( $
M IL
)
Year
Gross Margin
13.71 13.9
22.76
27.21 27.41 26.01
0
5
10
15
20
25
30
2018 2019 2020 2021 2022 2023
S H
V (
$ )
Year
Shareholder Value (SHV)
3
Figure 3: Apex Bikes Ltd. Long-Term Debt
➢ All Apex long term debt has been paid in 2021.
Figure 4: Apex Bikes Ltd. Sales Revenue & Net Income Comparison
➢ Apex tried to maximize profit by minimizing the gap between sales revenue and net income.
0
10
20
30
40
50
60
2018 2019 2020 2021 2022 2023
S a
le s
& N
e t
In co
m e
( $
M IL
)
Year
Sales Revenue versus Net Income
Sales Revenue Net Income
0
0.5
1
1.5
2
2.5
3
3.5
2018 2019 2020 2021 2022 2023
Lo n
g -T
e rm
D e
b t
($ M
IL )
Year
Long-Term Debt
4
Apex Sales & Market Share Performance
Figure 5: Apex Annual Revenue from 2018 – 2023
➢ Over the past 5 years, Apex managed to steadily grow its annual revenue. However, in 2022, Apex slightly declined due to strong competition in several markets. A different trend is captured in Market Share.
Figure 6: Multi-firm Market Share in North America from 2018 – 2023
MARKETING
5
Marketing Expenditure
➢ Apex strives to meet consumers need by carefully embedding each segment’s sensitivity and desired level of index, to our decision.
Figure 7: Apex’s Price & Marketing Figure 8: Apex’s Price & Advertising
Expenditure in Adventurers Market Expenditure in Kids Market
Figure 9: Apex’s Price Figure 10: PR Expenditure
In Commuters Market in Racer Market
6
As our mission and vision is to focus on performance, we started our first round of
decisions by developing the highly technical racer bike.
Apex Product Specs
Figure 11: Apex Bikes Ltd. Perceptual Map of Market Segments with all design projects.
All developments have been 100% successful, which lead to a steady reduction in prime
costs.
RESEARCH & DEVELOPMENT
7
Figure 12: Apex Bike Modification Prime Cost
$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
$300.00
$350.00
2019 2022 2023
P ri
m e
c o
st (
$ )
Year
Adventures Modification Achievement
Unit Prime Cost Goal Unit Prime Cost Achieved
$0.00
$100.00
$200.00
$300.00
$400.00
$500.00
2019 2021 2023
P ri
m e
C o
st (
$ )
Year
Racers Modification Achievement
Unit Prime Cost Goal Unit Prime Cost Achieved
0
10
20
30
40
50
60
70
2020 2022
P ri
m e
C o
st (
$ )
Year
Kids Modification Achievement
Unit Prime Cost Goal Unit Prime Cost Achieved
0
10
20
30
40
50
60
2020 2021
P ri
m e
C o
st (
$ )
Year
Commuter Modification Achievement
Unit Prime Cost Goal Unit Prime Cost Achieved
8
A. Quality Apex strives to increase the quality of their products by investing in quality systems and product inspections, which result in an increasing trend of quality index.
Figure 13: Quality Systems Expenditure
Inspected Product (%)
Year 2018 2019 2020 2021 2022 2023
Percentage 15% 15% 15% 16% 17% 19%
Figure 14: Quality Index
-
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
2018 2019 2020 2021 2022 2023
E x p
e n
d it
u re
( $
M IL
)
Year
Quality System Expenditure
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
2018 2019 2020 2021 2022 2023
Q u
a li
ty I
n d
e x
Year
Quality Index
OPERATIONS
9
B. PRODUCTION Overall production efficiency has increased from 2018 to 2022. However, production efficiency needs further improvement to reduce our idle time.
Figure 15: Production Efficiency
Figure 16: Workforce and Factory Capacity per Year
6 7
.3 %
8 2
.2 %
8 5
.8 %
8 8
.7 %
9 1
.7 %
9 3
.2 %
2 0 1 8 2 0 1 9 2 0 2 0 2 0 2 1 2 0 2 2 2 0 2 3
E F
F IC
IE N
C Y
( %
)
YEAR
P RO D U C T I O N E F F I C I E N C Y
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
2018 2019 2020 2021 2022 2023
S C
U
YEAR
FACTORY CAPACITY
Size of the plant Total factory workforce capacity
10
Manufacturing Capacity Usage
Figure 17: Production Efficiency
11
Apex aimed to continuously increase employee motivation and reduce staff turnover rate.
This was achieved through yearly raises in employee salary and training.
Figure 18: Apex Employees
Figure 19: Apex Idle Time & Staff Turnover Rate
0
20
40
60
80
100
120
140
2018 2019 2020 2021 2022 2023
N u
m b
e r
o f
P e
o p
le
Year
Number of Employees & Factory Workforce
Number of Employees Factory Workforce
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
2018 2019 2020 2021 2022 2023
Id le
T im
e &
S ta
ff T
u rn
o v e
r R
a te
( %
)
Year
Idle Time & Staff Turnover Rate
Idle Time (%) Staff Turnover Rate*
HUMAN RESOURCES
12
Figure 20: Apex Average Salary Level
Figure 21: Apex Training Expenditure
Figure 22: Apex Motivation & Skill Index
$22,000 $22,500
$23,000
$24,000 $24,500
$25,000
$20,000
$21,000
$22,000
$23,000
$24,000
$25,000
$26,000
2018 2019 2020 2021 2022 2023
A v
e ra
g e
S a
la ry
Year
Average Salary Level
$0
$50,000
$100,000
$150,000
$200,000
$250,000
2018 2019 2020 2021 2022 2023
T ra
in in
g E
x p
e n
d it
u re
Year
Total Training Expenditure
0
0.5
1
1.5
2018 2019 2020 2021 2022 2023
In d
e x
Year
Motivation & Skill Index
Motivation Index
Skill Index
13
In the future Apex plans to focus on increasing their production efficiency.
✓ Apex plans to focus on increasing their production efficiency, especially reduce idle
time to less than 5% within the next 2 years
✓ Potential of launching another product in the leisure market in the next 2-3 years.
✓ Future merger/acquisition was discussed with Cloudsweeper, which could increase
future growth potential
✓ Aim for a minimum increase of 10% in SHV per year
IN THE FUTURE
