Sir Neil d'Menture
Retro Guru
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Greed.
State of the industry: a running thread
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Sir Neil d'Menture
Retro Guru
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Intelligence has little to do with it.
Big boss wants more money. Big boss is only interested in more money. The business itself is incidental. Shareholders demand dividends, and they don't give a fig about the underlying business. Returns are all that matters.
Requirements are decided, lower minions are given targets which they must meet or lose their jobs. So the cycle begins.
Big boss wants more money. Big boss is only interested in more money. The business itself is incidental. Shareholders demand dividends, and they don't give a fig about the underlying business. Returns are all that matters.
Requirements are decided, lower minions are given targets which they must meet or lose their jobs. So the cycle begins.
Pressure from an economic system that prioritises growth and quarter by quarter thinking. Your business did well last quarter? Fantastic, we want to see the same again plus xxxx% next quarter otherwise we will regard your business as a failure and cut its value, and with that its ability to raise credit, your bonus etc. Think you're doing well on an individual basis? Got a billion dollars? You look poor compared to your ten billion dollar peers over here. Keep at it, maybe you will have enough one day. So we end up with all kinds of magical and wishful thinking.
The current system does have its good points, but near everyone is swept up in the collective madness including those further up the wealth ladder from us. I remember watching an interview with Elon Musk. The guy leads an absolutely desperate life, tons of pressure and stress and it doesn't sound like he enjoys it much. With most of today's wealthy capitalists we are long way away from the rich aristocracies of old and their lives of leisure.
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I read somewhere that part of the problem was that to secure build slots in the factories, bike companies had to put in huge orders or go to the back of the queue. Same for group sets and accessories (see my Santa Cruz comment above).
According to Cotic the unreliability of Far East production atm is one of the reasons they are moving some production to Europe. Makes the frames more expensive but at least they have some to sell!
The Tories destroying the country leading to people prioritising paying their mortgage, energy bill or food shop over a shiny new bike isn't helping either. Bit of a perfect storm for the bike industry.
According to Cotic the unreliability of Far East production atm is one of the reasons they are moving some production to Europe. Makes the frames more expensive but at least they have some to sell!
The Tories destroying the country leading to people prioritising paying their mortgage, energy bill or food shop over a shiny new bike isn't helping either. Bit of a perfect storm for the bike industry.
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Don't forget the many more expensive than you would usually buy hire/purchase cars people have.
Just to say, some countries accounting laws means you can't sell at a loss. At least below purchase price or added manufacturing, CoS, etc. etc. otherwise it's called dumping the market and there are controls against it.
Potentially, you have to write inventory off as obsolete / junk and will be a loss. Selling obsolete / junk inventory to a 3rd party for re-sell but not retail can be fine and an opportunity for hard discounters.
My guess, they will just slash production, and drip feed the excess inventory off at low non-existant profits.
N-plus-one
Old School Hero
I drive an old car, dont live a particularly "consumerist" lifestyle, and only now are people starting to realise that there is possibly method in my madness. Cycling is a super interest to have, because it can be quite healthy for bank balance as well as body. Just have to supress the N+1 tendency.
A long read but worth it in my view. From Lace, ex Global Marketing leader for Kona, and more recently NA Marketing leader for Nukeproof, it shows the human side of the fall-out, and lifts the covers on the heart and soul of "our scene".
http://www.theviewfromthecorner.com...YwE27sOytg1lSYwc54HLbz_qrPWCsxk2T2BugzklmMlQg
Couple of exerts if you want the cliff notes:
Re Nukeproof:
http://www.theviewfromthecorner.com...YwE27sOytg1lSYwc54HLbz_qrPWCsxk2T2BugzklmMlQg
Couple of exerts if you want the cliff notes:
Without turning this into a Kona thread, it's important to add that a number of the original owners and leaders retired not long after this and the buyout; a big factor to the "soul and spirit" comment.
Re Nukeproof:
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