Detroit Bikes: PEST Analysis and Porter’s Five Forces Framework

Detroit Bikes

DETROIT BIKES 1
1
PEST
PEST Analysis
Political
Government is the main factor which affect
the growth of the company
Increasing demand of consumer reflects the
increasing investment of the government
(Rugman, & Verbeke, 2017).
As per the case study, US federal government
develops the budget to repair the roads in
order to develop the accessible roads for
Bicycle.
Economical
As the city is largest municipal bankruptcy
filling in US with the amount of $18-20
billion which indicates the poor financial
condition of the city.
It is a negative factor for the company as the
purchasing power of consumer is low due to
poor financial condition of the country.
Social
Unemployment rate of the country is high
due to which the income of consumer is less.
Less income reflects the low purchasing
value of consumer towards the goods and
services.
Taste of consumer is changing towards the
bikes as per the developing technology.
Technology
It has been seen that the country has poor
financial condition due to which it is not able
to invest large amount in technology.
As per the analysis, it is observed that the
company manufacture its product in USA in
order to sale the unique and differentiate
product by using the new technology.

DETROIT BIKES 2
Porter’s Five Forces Framework
Threat of New Entrants
 It has been seen that the company has
low level of threat of new entrants
 Small and local companies enter the
market such as Shinola and Detrioit
Bikes Company.
 High brand image of the existing
companies is a high threat for new
entrants.
Bargaining power of consumer
Bargaining power of consumer is low which
indicates that the company has high demand
but less supply of products.
There is less number of companies in the
industry that is why the consumers have less
option to negotiate with the different
companies for the prices of product (Burns,
& Dewhurst, 2016).
.
 Bargaining power of Suppliers
 The company has low level of threat
due to less number of suppliers in the
market
 There is less number of companies
which operates under the Bicycle
industry that is why the suppliers
have fewer options to provide the raw
material according to their own
Competitors
 Low level of threat
 The company has the threat from the
local competitors
 Parlee Cycles, Bilenky Cycle, and
Firefly Bicycle are the top
competitors of the company.
 These companies can less comparable
with the Detroit Bike in the context of