Business Strategies and Success of Santa Cruz Bicycles Company

Critical Facts

Santa Cruz Bicycles was started in Seabright Cannery, in Santa Cruz, California in the year 1994 and committed to manufacturing a perfect mountain bike known as “simply advanced” that costs up to $6,500 (Santa Cruz Bicycles).

Their first bike was Tazmon for which they’ve used a single-pivot dual suspension bike that rattled established sensibilities. Juliana is their sister brand with a wide range variety of high-end bicycles for women (Santa Cruz Bicycles).

Santa Cruz is offering riders a lifetime support and thriving to build a high-quality bicycle with custom specifications that make riding a better experience. Due to this, their customers are willing to pay more if it will improve the speed or comfort (Keri E. Pearlson Carol S. Saunders, 2012). A few years later they’ve invented carbon bikes with the virtual pivot point suspension technology which are widely available. This suspension technology allows the rear wheel to bounce up to 10 inches without hitting the seat (Keri E. Pearlson Carol S. Saunders, 2012).

The VPP (Virtual Pivot Point) is manufactured in a way that it will sustain in the market for a long time. Because they’ve used the best suspension technology (Santa Cruz Bicycles).

They test their manufactured bikes under extreme conditions to bring out the best for their customers (Keri E. Pearlson Carol S. Saunders, 2012). Their first few VPP prototype models were not effective and had issues with the joint’s upper-link. Because the company using CAD(Computer-aided-design) software which took 7 months to create a design and if they face something inaccurate they must redesign the product which indeed is not beneficial for the company (Keri E. Pearlson Carol S. Saunders, 2012).

The company members have decided to follow the system which other global industries are using like Product lifecycle management (PLM) software. This resulted in reducing the designing period of the product from 28 months to 12-14 months (Keri E. Pearlson Carol S. Saunders, 2012).

Analysis: What, in your opinion, was the key factor in Santa Cruz Bicycles’ successful process redesign? Why was that factor the key? Santa Cruz bicycles company have designed a Virtual Pivot Point (VPP) suspension technology and acquired patent rights. VPP initial prototypes are a failure and the Computer-aided-design (CAD) software which is used by the research and development team of Santa Cruz was not effective. It took approximately seven months to design a product which is way too long, and they have to re-design if the design fails. This issue has triggered the need to change the system which will obviously increase the speed of designing and creating prototypes (Keri E. Pearlson Carol S. Saunders, 2012). Santa Cruz Bicycles company have adapted a product lifecycle management software like other global manufacturing enterprises. PLM systems will help them to take raw ideas of a product and then turn them into a real product. PLM includes innovative activities, new product development and management, and designing. This system enclosed with information focusing on various aspects like designing a product, production, maintaining existing products by providing services, different components used in the product, dealers, user experiences and retailing (Keri E. Pearlson Carol S. Saunders, 2012).

Santa Cruz have hired a master frame builder and purchased a van-sized machined which costs for about $45,000 which will convert a piece of aluminum into an intricate part within 1-2 days (Duvall M, 2007). This has eradicated the need for outsourcing the fabrication process. This also decreased the prototype implementing process by facilitating in-house testing and building tools for their prototypes (Keri E. Pearlson Carol S. Saunders, 2012). Previously, Santa Cruz software took about 7 hours to run a stimulation and if any failure occurs time and effort are wasted but with the new software pro/Engineer can analyze in 5 minutes. This means the new software will allow many stimulations quickly and make any adjustments required to the design (Keri E. Pearlson Carol S. Saunders, 2012). Project lifecycle management system has benefited the bicycle company where earlier the process of designing and shipping the end product would take almost 28 months, but after using the PLM software it declined the time span to 12-14months by increasing the overall productivity (Keri E. Pearlson Carol S. Saunders, 2012).

The key factor is Santa Cruz adopting product lifecycle management system and has been successful to innovate, design and construct a product in the company with their in-house machine instead of outsourcing. Santa Cruz has managed the change in a way that the organization risks and costs are minimized. Because if the change is mismanaged Santa Cruz will be a victim for not finishing the project in time and budget (Tim Creasey). Thus, we can say Santa Cruz managed to bring a product into light within half of its time when compared to the time taken while using CAD software. This means they have a better quality and control of the new process, because they can go through and revise the prototypes and make adjustment or changes quickly. But we must keep in mind that using new technology will benefit the organization, but we have to update the software in a timely manner otherwise this might have adverse effects.

Recommendations: By choosing project lifecycle management system Santa Cruz has benefited their overall performance and productivity. By using this new system, they can commit mistakes as early as possible and make adjustments to the prototype which will result in reducing costs. I would recommend Santa Cruz company to plan carefully so that the change will lead to more effective output. To make revenue they must invest more on software upgrades to succeed in a long-run. They must maintain relationship within and outside the organization to get feedbacks from the customers and make changes for the next releasing models. This will help them to have a strong base in mountain bicycles industry. Santa Cruz must try integrating their van-size machine 3D designs with PLM software, this will help them to reuse the designs with some modifications to the design which will obviously reduce prototyping costs.