Yuba
Electric Cargo Bikes – Case 2
Competitive
Strategies and Targeting
Yuba Bikes, LLC is a small business
headquartered in the northern California community of Petaluma. It was started by Benjamin Sarrazin, an
adventurer and a world traveler who grew up in bike-friendly Strasbourg,
France, before coming to the U.S. He
founded the company in 2006.
The Yuba Bicycle business model includes
developing the brand label and identity, as well as sales, marketing and
distribution. They have a network of
distributors in place across the U.S. from Maine to Florida, Texas, Washington
State, Colorado, and points in between.
Our bikes are also distributed in Europe, Austrailia, Thailand, Canada
and Singapore. “The goal is to expand
our distributor base and our global reach into other markets, said Mr.
Sarrazin. Cargo biking is really
catching on.” The company has doubled
annual sales each year since 2010.
The company focuses exclusively on cargo
bikes and manufactures a line of both traditional and electric cargo
bikes. The particular focus for this
case is the electric cargo bikes.
Currently, Yuba Bikes manufactures 3 models of electric bikes – Spicy
Curry, el Mundo, and el Boda Boda. The
base price for these electric models range from $3000 to $4500, excluding
customization or accessories.
All Yuba Bicycle models are made in China
and shipped to Yuba Bicycles in the U.S. for assembly and customization. A complete line of accessories and bike
models are kept in inventory at the company’s warehouse and repair facility
adjacent to the showroom and administrative offices in Petaluma, CA. For more information on the company and its
products you are encouraged to go to their website at www.yubabikes.com.
The market
The market for electric bikes is highly
fragmented with many small manufacturers.
One of the largest in the United States is Pedego Electric Bikes which
only sold about 10,000 e-bikes in 2015.
Yuba Bikes company sales forecast for 2016 for the United States is
approximately 2500 electric bikes with approximately $9.75 million in sales
revenue including accessories. Total industry
sales forecast for e-bike sales in the United States in 2016 is estimated to be
about 152,000 units. Compare that to the
Asia Pacific region where 32.8 million units are expected to be sold in 2016.
There are electric bikes for a variety of
purposes from general recreational bikes, mountaineering bikes, commuter bikes,
and cargo bikes. Again, Yuba Bikes
specializes in only one type of electric bicycle, the cargo bikes. An e-bike is a bicycle with an electric
motor. A rider can pedal without using
the motor or use it for a boost.
E-bike manufacturers are just in the
beginning stages of targeting the U.S. market.
In fact many people in the U.S. don’t even know what an electric bicycle
is. Do you? You are encouraged to read the attached
article “Behold a Future of Assisted Pedaling”, which is attached to these
instructions. Other information should
be readily available to you on the web if additional insights would be helpful
to you in making decisions.
Case Assignment:
1) Based on your assessment of
the competition and the market situation facing Yuba bikes, which of Porter’s
Competitive Strategies do you recommend that they follow in future marketing
efforts for their line of electric cargo bikes?
Why do you feel this is the best competitive strategy to pursue?
2) Based on your assessment of
the market for electric cargo bikes, recommend what you believe to be the
primary target market they should focus on for marketing their line of electric
cargo bikes? Explain the rationale for
your recommendation?
