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  1. #1
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    cannondale stores?

    looks like dorel is looking to develop its own dealer network la apple store. good idea or bad idea?

    Quote Originally Posted by competitivecyclist.com
    - Gossip, anyone? From multiple sources this week I've heard tales of a juicy potential acquisition. Dorel, owner of Cycle Sport Group (read: Cannondale, GT, Schwinn, Mongoose), is rumored to be in talks to acquire Performance Bicycle. It's a transaction that makes sense in almost every conceivable way.

    As I've noted here on several previous occasions, the big hitters of North American bike manufacture are dying to modernize their distribution chains. For now the big hitters -- Specialized, Trek, Cannondale, Giant -- have only one channel of distribution: Their dealer network. Take any other highly-regarded, high-end consumer good sold in America -- Patagonia Capilene shirts, Apple iPods, Nike Air Jordans, Coach leathergoods, or any of a billion other examples -- and you have a multitude of ways to buy them: Direct from the brand on-line; direct from the brand through a corporate brick & mortar store; through a 3rd party online retailer; or through a 3rd party brick & mortar retailer. Illuminated manufacturers all know one fact: The name of the game is customer convenience, which means offering your goods through whatever sales channel suits customers best. This concept, in business-speak, is known as "multi-channel retail."

    In the bike industry as it exists now, multi-channel retail is non-existent. Wanna buy a Specialized Roubaix? You need to buy it from your local Specialized dealer (whether you like them or not.) Wanna buy it from Specialized.com? Not an option. Wanna buy it elsewhere on-line? There's only one place: Ebay, in violation of Specialized warranty. Brands like Specialized & Trek have fought bloody battles over the last decade to sire the biggest dealer networks possible, and they're terrified of losing dealers to their rivals as a consequence of diversifying into additional sales channels. Their fear of their dealers outweighs their regard for customer convenience.

    If Dorel buys Performance, it provides them total vertical integration thanks to Performance's ~94 brick and mortar locations, and their healthy online business. No company currently has integration from manufacturing all the way to multi-channel retail like this. For Performance, being acquired is pre-destined: They were acquired by a private equity concern just 3 years ago, and given the strong numbers reported by the bike industry's most solid players, the time to sell is now. Last I heard, private equity types aren't collectors. Buying & selling is what they do.

    Is there any downside to a Dorel acquisition of Performance? In terms of GT, Schwinn, and Mongoose, there's no risk. These are big box brands (i.e. Walmart) and companies like these don't fret about itty-bitty specialty channels like Performance. The only interesting issue is Cannondale: Word on the street is that of all the big brands, they're the one that fared the best during the economic turndown of 2009-ish -- a byproduct of Cannondale's excellent management of their dealer channel. Will your local Cannondale dealer stand for Cannondale bikes being parked in Performance stores? What if they're sold on Performance's website (or on Cannondale's website)? A mass exodus of previously committed Cannondale dealers is the one risk factor for Dorel here. Given the irrational, ornery ways of most IBD's, even the remotest connection of Cannondale to Performance might cause them to jettison the brand. The drama should be fun to watch unfold.

  2. #2
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    I really hope it doesn't happen, it goes against every "buy local" fiber in my body. But it makes sense from a business perspective. I think it would cheapen the brand to the discerning customer; but having corporate marketing money to advertise local stores could take it much more mainstream...
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  3. #3
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    to be a success they need to mimic the apple store experience (see http://www.adaptivepath.com/ideas/es...ves/000331.php)

  4. #4
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    A Performance just moved in less than 10 min from my shop, I don't think Cannondale would put their bikes in there, they didnt in the REI near us...

  5. #5
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    Performance doesn't have the staff that an IBD might have that would be fully trained and committed to the Cannondale brand. Most IBD can wrench very well having formed a relationship over years with Cannondale. Remember there is Product, Price and Service any two components that stand out usually makes the sale. But I think in the bike business you had better be able to offer all three components for the sale. Performance might have difficulty with service and expertise starting out.
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  6. #6
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    I personally don't think Dorel will load up all the performance stores with Cannondale if they do acquire the business. It's fair to say that Dorel management understand the separation between their high end brands and low end brands enough to not stick a Cannondale in the Performance stores...however what you mgiht see is some Cannondale specialty stores. Dorel might take and few of the Performance stores located in prominent locations and convert them into Cannondale Specialty store. Its Similar to what Specialized has been doing lately, only difference is that Dorel will own that store and not just working with one of the local shops to build a specialty store.

    Ofcourse i might be wrong and they might just ruin Cannondale...it's all a guess right.

  7. #7
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    Worked for Trek. Didn't "cheapen" their brand. Cheapening your brand would be moving all your manufacturing overseas, then still charging the same price you did when your bikes were made in the US.

  8. #8
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    Quote Originally Posted by Superpilot
    Worked for Trek. Didn't "cheapen" their brand. Cheapening your brand would be moving all your manufacturing overseas, then still charging the same price you did when your bikes were made in the US.
    Sounds like an uneducated stab at Dorel's decision to move production to Aisa.

    You say that moving all your manufacturing overseas and charging the same price cheapens your brand, yet Trek was impervious to this "cheapening?" They moved almost all production overseas and prices did not fall.

    Quality has gone up significantly since production was moved, there is much better quality control. I'm not alone in this opinion, there was a thread recently where many people including myself and others who have had many Cannondale's (both US made and Asian made) who say that quality has gone up.

    To address your cost misconception. It may be cheaper to actually produce the bikes in Asia, but according to some newly published articles in news papers like the New York Times (credible) that say that cost of labor and production in Asia is on the rise. This means that the new Asian made frames and bikes are only actually slightly cheaper to make and assemble, this does not factor in the heightened cost of shipping. These shipping costs include putting bikes on the boat to ship to the US, taxes for sending products made elsewhere into the US. These are two costs that Cannondale has never had to deal with because they were manufactured and assembled in Bedford, so it makes sense that prices stayed the same.

    The entire point of a business is to make money, if Cannondale moved production to Asia to make money, great. They are following a good business model. If they are making a little more (under $100 per bike) than they did on US made bikes, then so be it. When you buy a Cannondale, you know that whether it was US or Asian made you are paying for a high quality bicycle product that Cannondale stands behind with their outstanding warranty.

    Take all the stabs at Cannondale you want, but "Cheapening" is not something that Cannondale production in Asia has done.

    I really like to keep threads on track to what the OP posted, but this I couldnt let go.

  9. #9
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    Quote Originally Posted by amillmtb
    Sounds like an uneducated stab at Dorel's decision to move production to Aisa.

    You say that moving all your manufacturing overseas and charging the same price cheapens your brand, yet Trek was impervious to this "cheapening?" They moved almost all production overseas and prices did not fall.

    Quality has gone up significantly since production was moved, there is much better quality control. I'm not alone in this opinion, there was a thread recently where many people including myself and others who have had many Cannondale's (both US made and Asian made) who say that quality has gone up.

    To address your cost misconception. It may be cheaper to actually produce the bikes in Asia, but according to some newly published articles in news papers like the New York Times (credible) that say that cost of labor and production in Asia is on the rise. This means that the new Asian made frames and bikes are only actually slightly cheaper to make and assemble, this does not factor in the heightened cost of shipping. These shipping costs include putting bikes on the boat to ship to the US, taxes for sending products made elsewhere into the US. These are two costs that Cannondale has never had to deal with because they were manufactured and assembled in Bedford, so it makes sense that prices stayed the same.

    The entire point of a business is to make money, if Cannondale moved production to Asia to make money, great. They are following a good business model. If they are making a little more (under $100 per bike) than they did on US made bikes, then so be it. When you buy a Cannondale, you know that whether it was US or Asian made you are paying for a high quality bicycle product that Cannondale stands behind with their outstanding warranty.

    Take all the stabs at Cannondale you want, but "Cheapening" is not something that Cannondale production in Asia has done.

    I really like to keep threads on track to what the OP posted, but this I couldnt let go.
    I KNOW the reason some of us bought a Cannondale over a Specialized, or a Giant is because it was made in America. To me, moving production overseas is "cheapening" the brand. Before Trek moved MOST production overseas, their prices were still inline with competitors like Specialized. Saving money isn't everything, keeping customers and making money is key to business. They have lost me as a customer for future bikes.

    Continue with Cannondale Store conversation.

  10. #10
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    Could be good in that there would be competent techs to service Lefties w/o sending them to PA, but that's not Performance's strength. Performance is retail first, bike shop second. This is not a terrible thing, as some of my LBS are bike shops fourth. Still, Performance is not currently setup to provide top notch mechanical help.
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  11. #11
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    Well cannondale bikes are NOT exclusively sold in well staffed stores!
    Since I'm in service I can tell you that major military posts sell cannondale bikes and accessories without having mechanics to do service or anything on those high priced rigs.
    Matter of fact a friend of mine had issues with his Fatty fork on his hard tail and wasn't able to get the issue resolved so his whole "cannondale experience" was that he will not buy another one.
    Since Dorel is in it for the money I can see them selling cannondale through Performance stores and catalogs.
    The cannondale brand name doesn't mean squat to the executives in management......they will exploit it in every way possible as long as it is profitable.
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  12. #12
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    Quote Originally Posted by cdalemaniac
    Since Dorel is in it for the money I can see them selling cannondale through Performance stores and catalogs.
    The cannondale brand name doesn't mean squat to the executives in management......they will exploit it in every way possible as long as it is profitable.
    You assume that. Having talked to many of the executives I can tell you that is not the case at all. They all care about the brand a great deal and are looking to make it "the" brand over the next few years. Since purchasing Cannondale they have doubled the R&D budget and have also increased marketing. Not having a 29 full sus yet is a function of budgets 2 and 3 years ago...the last years that they were owned by pegasus.

  13. #13
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    again, they need to make the experience like the apple stores. the design of the store should be minimalistic aesthetic and emphasize the bikes. unlike a normal bike shop where it's cluttered with bikes, it should just have 1 of each model grouped by product category. it should also have similar to the genius bar to help customers with bike troubles. having a dealer network would give a consistent experience nationwide.

  14. #14
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    Good job!

    Quote Originally Posted by amillmtb
    Sounds like an uneducated stab at Dorel's decision to move production to Aisa.

    You say that moving all your manufacturing overseas and charging the same price cheapens your brand, yet Trek was impervious to this "cheapening?" They moved almost all production overseas and prices did not fall.

    Quality has gone up significantly since production was moved, there is much better quality control. I'm not alone in this opinion, there was a thread recently where many people including myself and others who have had many Cannondale's (both US made and Asian made) who say that quality has gone up.

    To address your cost misconception. It may be cheaper to actually produce the bikes in Asia, but according to some newly published articles in news papers like the New York Times (credible) that say that cost of labor and production in Asia is on the rise. This means that the new Asian made frames and bikes are only actually slightly cheaper to make and assemble, this does not factor in the heightened cost of shipping. These shipping costs include putting bikes on the boat to ship to the US, taxes for sending products made elsewhere into the US. These are two costs that Cannondale has never had to deal with because they were manufactured and assembled in Bedford, so it makes sense that prices stayed the same.

    The entire point of a business is to make money, if Cannondale moved production to Asia to make money, great. They are following a good business model. If they are making a little more (under $100 per bike) than they did on US made bikes, then so be it. When you buy a Cannondale, you know that whether it was US or Asian made you are paying for a high quality bicycle product that Cannondale stands behind with their outstanding warranty.

    Take all the stabs at Cannondale you want, but "Cheapening" is not something that Cannondale production in Asia has done.

    I really like to keep threads on track to what the OP posted, but this I couldnt let go.
    +1 but careful now , your argument is much too rational for this forum.

  15. #15
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    Quote Originally Posted by Junior Varsity
    You assume that. Having talked to many of the executives I can tell you that is not the case at all. They all care about the brand a great deal and are looking to make it "the" brand over the next few years. Since purchasing Cannondale they have doubled the R&D budget and have also increased marketing. Not having a 29 full sus yet is a function of budgets 2 and 3 years ago...the last years that they were owned by pegasus.
    +1 on this too, Cdalemaniac is talking out of his backside.

  16. #16
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    Quote Originally Posted by BadBoyNY
    +1 on this too, Cdalemaniac is talking out of his backside.
    Whatever....once your precious bike brand will be sold in a catalog and not exclusively in a "well staffed store", or the "lifetime warranty" will be changed to 5 years, or the lefty/headshok will be discontinued because of lacking support then you'll realize that me talking out of my "backside" was maybe more dead on than you talking out of your front side....
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  17. #17
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    Quote Originally Posted by cdalemaniac
    Whatever....once your precious bike brand will be sold in a catalog and not exclusively in a "well staffed store", or the "lifetime warranty" will be changed to 5 years, or the lefty/headshok will be discontinued because of lacking support then you'll realize that me talking out of my "backside" was maybe more dead on than you talking out of your front side....
    Cdale ..amusing as you are ....

    If I got five years out of a mountain bike and then it broke i wouldn't be running back to the manufacturer for a replacement. I would be looking around for something new.

    As it is obviously not a precious brand too you I don't know why you call yourself " cdalemaniac" or even come on this forum.

    As Headshok has been around for a good ten years and Lefty is also approaching that , I don't think they lack support even in those dark days under Pegasus which were a result of Montgomery futzing up the company.

    Take off your rose-tinted glasses ,some of us live in the real world here, we don't get the internet piped into our caves.

  18. #18
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    what's wrong with selling bikes over the internet? you can purchase many high end goods this way. it won't cheapen the brand but make it more accessible. the only problem with buying a bike online is that it needs to be built by a competent mechanic. that's where these c'dale stores would come in handy. buy online, the bike is either in stock or shipped from a warehouse, built, and you pick it up. if you don't know what you want or don't know what size of frame fits, then you stop by the store and speak to a specialist.

    i must reiterate that for these stores to be successful they must be staffed by knowledgeable, proficient, and skilled employees.

    what c'dale needs to work on is having the right bikes in stock. there should be no reason for a customer to have to wait more than a week or 2 for a bike. they'll only lose potential customers this way...

  19. #19
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    I hope they have product to sell

    and not the crazy waiting periods they had in the past. My US made flash(frame) had a very crappy paint job and I waited for months to get it.

    Now if I could just get my lefty thats been on ordered for months I would be happy.

    About the store I'm not sure is trick to do that, if they some how can bring several brands then it might work. I don't go into a specialized store because I already know what they have, maybe to get some generic bike part.

  20. #20
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    No good

    Quote Originally Posted by amillmtb
    It may be cheaper to actually produce the bikes in Asia, but according to some newly published articles in news papers like the New York Times (credible) that say that cost of labor and production in Asia is on the rise. This means that the new Asian made frames and bikes are only actually slightly cheaper to make and assemble, this does not factor in the heightened cost of shipping. These shipping costs include putting bikes on the boat to ship to the US, taxes for sending products made elsewhere into the US. These are two costs that Cannondale has never had to deal with because they were manufactured and assembled in Bedford, so it makes sense that prices stayed the same.
    Prices stayed the same? Actually, no, it does not make sense. I thought the whole idea of outsourcing manufacturing was to pass on lower prices? You're trying to convince us that Dorel was "caught off guard" by something so unknown to a corporation as "shipping and labor costs??" What, did Dorel think they'd be able to ship the bikes back here for free?

    Of course those are two factors Cannondale never had to deal with when their bikes were made in the USA. So now we having rising Asian labor and shipping costs, everybody out of a job in small-town USA, and the Cannondale customer gets their bikes at the same or higher prices than before. Bravo Dorel. Bravo. All you accomplished is you hurt a lot of folks in a small American city.

    jeff

  21. #21
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    Quote Originally Posted by BadBoyNY
    +1 but careful now , your argument is much too rational for this forum.
    You're here. . .

    jeff

  22. #22
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    Quote Originally Posted by BadBoyNY
    Cdale ..amusing as you are ....

    If I got five years out of a mountain bike and then it broke i wouldn't be running back to the manufacturer for a replacement. I would be looking around for something new.
    That's you, not the majority of riders in this forum as you can tell whenever there's a discussion about a broken frame....
    Getting a a Rush or Scalpel carbon because your Raven frame broke and you still have the warranty card, receipt etc. is really nice for the customer, but not the Company


    Quote Originally Posted by BadBoyNY
    As it is obviously not a precious brand too you I don't know why you call yourself " cdalemaniac" or even come on this forum.
    ...because I been a loyal cannondale owner since the early nineties and had numerous of their US Handmade bikes since then...
    The emphasis is US made bikes....I'm disgusted by the whole Dorel take over/outsourcing thing, and even more disgusted by those folks that don't care!


    Quote Originally Posted by BadBoyNY
    As Headshok has been around for a good ten years and Lefty is also approaching that , I don't think they lack support even in those dark days under Pegasus which were a result of Montgomery futzing up the company.
    Yes, it's been around alright, but if you talk to a non Headshok rider the whole thing with the shops not being able to perform simple service or the wait time when shipped to cannondale is something that keeps them from buying one...
    Dorel can't afford this if they want to expand the brand and sell more bikes to average riders.

    Quote Originally Posted by BadBoyNY
    Take off your rose-tinted glasses ,some of us live in the real world here, we don't get the internet piped into our caves.
    See my above statements to see who the one is that is actually living in the real world.
    "Common sense isn't always that common!"
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  23. #23
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    Quote Originally Posted by cdalemaniac
    That's you, not the majority of riders in this forum as you can tell whenever there's a discussion about a broken frame....
    Getting a a Rush or Scalpel carbon because your Raven frame broke and you still have the warranty card, receipt etc. is really nice for the customer, but not the Company




    ...because I been a loyal cannondale owner since the early nineties and had numerous of their US Handmade bikes since then...
    The emphasis is US made bikes....I'm disgusted by the whole Dorel take over/outsourcing thing, and even more disgusted by those folks that don't care!




    Yes, it's been around alright, but if you talk to a non Headshok rider the whole thing with the shops not being able to perform simple service or the wait time when shipped to cannondale is something that keeps them from buying one...
    Dorel can't afford this if they want to expand the brand and sell more bikes to average riders.



    See my above statements to see who the one is that is actually living in the real world.
    BORED Now.

  24. #24
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    Quote Originally Posted by BadBoyNY
    BORED Now.
    Yes, I bet you are....the truth is always boooooring!
    "Common sense isn't always that common!"
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  25. #25
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    Quote Originally Posted by az1jeff
    Prices stayed the same? Actually, no, it does not make sense. I thought the whole idea of outsourcing manufacturing was to pass on lower prices?
    the reason they "outsourced" manufacturing was to increase profit margin. msrp stays the same but manufacturing costs are reduced

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