Marketing Analysis of Detroit Bikes: PEST and Porter's Five Forces

Running head: MARKETING
Marketing
Name of the Student
Name of the University
Author Note

MARKETING
Table of Contents
Answer to question 1:.................................................................................................................3
Answer to question 2:.................................................................................................................5
Competitive advantage of Detroit Bikes:...................................................................................5
Characterization of target market:..............................................................................................5
Characterization of Detroit Bikes:.............................................................................................5
Answer to question 3:.................................................................................................................5
Suggested growth strategy:........................................................................................................5
Risks and opportunities of growth strategy:...............................................................................6
Evaluating the reasonability of investment:...............................................................................6
References list:...........................................................................................................................7

MARKETING
Answer to question 1:
PEST analysis of the business model of Detroit Bikes is illustrated below:
Political factor- The public system of Detroit was increasingly worsened with
extensive corruption. The prevalence of societal issues of sustainability of environment,
reducing dependence on fossil fuels and increasing price of gas made bicycle gain popularity
and contributed positively to business of Detroit (Balsas 2015).
Economic factor- There was abundant inexpensive expense, machinery expense and
skilled workers. The government in US made significant investment in road development,
bicycle paths and bike related infrastructure.
Social factor- One of the business models of Detroit produces bike of any color and
the riders were assured of smooth ride because bicycles have wheels that is slightly larger
than the average. Since bicycle offered a most environment friendly and cost effective way to
travel, the increasing demand prompted company to increase the manufacture of bicycle
(Grafova et al. 2017).
Technological factor- Detroit has significant production capacity that enabled them
to the largest scale manufacturer of bikes. Customized bikes are produced by company along
with other features such as safe braking, full control, foot and hand brakes.
PORTER five forces analysis of business model of Detroit Bikes:
Threat of substitutes- The threat of substitute of Detroit bikes is weak as many of the
manufacturers producing somewhat similar bikes did not intend to make specification that the
bikes are no longer produced in USA. Detroit was successful in distinguishing itself from
other mass manufacturer companies and was ahead of the manufacturing trend.
Threat of new entrants- Detroit Bikes is the largest producer of bicycle in North
America. Detroit bikes have lower threat of entrants because it enjoys less production cost