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Running Head: UK MARKET EVALUATION FOR BIANCHI COMPANY
UK Market Evaluation for Bianchi Company
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Introduction
Bianchi bicycles were founded by Edoardo Bianchi in Italy in 1885. The company is
considered as the oldest bicycle manufacturing company in existence. It is attributed in the
pioneering of equal sized wheels made of rubber material. In 1897 until 1967 the company
stretched its business potential and ventured in vehicle production but later sold the business to
car maker Fiat. The success of Bianchi bicycles can be signified and associated with Tour de
France winners Felice Gimondi, Fausto Coppi, and Marco Pantani. According to Dineen (2013)
of the Telegraph, there is no other bicycle manufacturing company that can outmatch Bianchi as
this is further supported by the paintings in the bicycle with a recognisable Celeste. In 1939,
Bianchi was selling 70,000 bicycles a year; this meant sales boom and it helped in the
recognition of the brand globally. The company has become an iconic bicycle brand with its
recognition pattern being the Celeste which is considered as the most distinctive colour in the
business. Why is the brand best recognized by international cyclists? Well, this might be due to
its stability and engineering techniques. The brand incorporates COSMOS software company
and Solidworks to design innovative bicycles that best display creativity, technology, and high
innovation. According to Concord (2007), the company has been innovative in technique and
tools with advancement in flexible design capacity, high technology, and rapid product delivery.
It is relevant then to consider Bianchi as an iconic brand that delivers high quality standard
bicycles internationally. However, despite its immense growth, Bianchi’s bicycles are considered
expensive than some of the market brands and this could affect its competitive business
environment. This paper review seeks to discuss the competitive business environment in the UK
for Bianchi bicycle and its importance in the market.
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Discussion
Section 1
For any organization to have a competitive edge and keep its business ahead, it is
imperative for the mangers to adjust their strategies effectively in order to reflect the new
environment or current environment in which it operates. The external environment in an
organization is the external factors outside the company that affect the function ability of the
company. It requires the organization to make efficient adjustments. As a management
consultant, it is my suggestion that organizations like Bianchi should monitor the new market to
venture in the UK and keep a close watch in an attempt to influence its position. The external
environment of a business plays a significant role in shaping the future of the business and the
entire industry. It is basically a strategy review process. An organization external environment
encompasses factors and forces that influence the organization either negatively or positively. In
addition, it can be further divided in two categories the volatile and non volatile environment.
The volatile environment consists of factors of influence such as suppliers, customers, public
pressure groups, and competitors. Al these factors directly influence the company’s goal,
customers, the decisions of the company, and the general structure (Teik, 2013).
PEST Analysis
The PEST analysis also referred to as the PESTLE analysis is a notion of marketing
principles used by companies to analyze and track the environment in which they are operating
or planning to execute a business. It denotes P for Political, E for Economic, S for Social and T
for Technological. Basically, PEST analysis as a marketing tool gives a view of the external
environment which the business operates from many angles and further keeps track and checks
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while contemplating on ideas. It is imperative for Bianchi to apply the PEST analysis. The
company should formulate these questions and keep in mind before venturing in the UK market,
they include;

What is the political situation in UK that might affect its growth?

What are the important economic factors?

What importance does the UK culture have in the market and how is it a determinant?

Are there technological innovations that might affect the structure of the business?
All this questions in mind are vital for Bianchi and the environment it is considering to
venture. The concept is more than just understanding the market but a framework that depicts the
overall strategic management that defines the operation of Bianchi and consequently accounts for
the strategies attached to it and the company’s organizational goal (PESTLE Analysis, 2014).
It is very imperative for Bianchi to evaluate the depth of each letter of the PEST. This is as
follows;
Political
These facets determine the governments influence on the economy of an organization.
For instance, a government may impose stringent tax measures that may in effect influence the
entire revenue generation structure of the organization. Political factors encompass; trade tariffs,
tax policies, Fiscal policies, and much more. They are levied by the government and may affect
the economic and business environment of the company. It is imperative for Bianchi to consider
the political stability of the UK as well, the government’s intervention o the market or the
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industry, the legal model, trade tariffs and regulations, and other related topics that might affect
the business (PESTLE Analysis, 2014).
Economic
These factors determine the economic performance under which the company operates.
They directly impact the company and have long-term effects on the business. For instance, an
increase in the inflation of UK economy would affect Bianchi’s way of pricing their products. In
addition, this would consequently affect the purchasing power of the consumer and demand.
Some of the economic factors include; interest rates, economic growth patterns, inflation rate,
and exchange rates. This also accounts for the foreign direct investments (FDI) which in
Bianchi’s case is a direct influence since it is a direct investment in the foreign market. The
economic analysis summarizes the infrastructure quality, government’s intervention, labor costs,
and other relevant factors (PESTLE Analysis, 2014).
Social
These factors analyze the social-cultural environment of the market. They include; the
class structure, demography, culture, education, health, entrepreneurship, and the environmental
consciousness. They are the attitudes and values that the organizational stakeholders integrate to
the workplace such as success, change, risks, competition, and social institutions. An example
can be the buying trends of the people culture in the UK where there is high demand in the
holiday seasons (PESTLE Analysis, 2014).
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Technological
In technological analysis, it is crucial for you as the operations management of Bianchi
Company to discuss the latest technological advancements and innovations, and how they impact
o the value chain structure, cost, and technological diffusion. The technological analyses refer to
research, developments, automation, and technological consciousness that a market has in store.
For example, the availability of new innovation materials in the UK market will definitely
influence Bianchi’s organization structure and influence (PESTLE Analysis, 2014).
The PEST analysis is a guiding tool for any organization’s strategic management process. The
figure below gives a summary of the PEST analysis;
Figure 1: PEST Analysis (Teik, 2013)
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Section 2
According to Alexander Grous who conducted a research on UK’S bicycle industry, the
cycle industry is worth 2.9 billion pounds. This is largely attributed to a 28% increase in bicycle
sales since 2009. In UK, 13 million people regularly cycle across the country boasting the sales.
The report scrutinizes some factors of benefits such as retail, employment related to cycling, and
bicycle manufacturing. While the other industries are feeling the pinch, the British cycling
business is booming. According to Nielson (2010), even in the hard economic times, the bicycle
industry in the UK has not experienced the recession. His sentiments are further echoed by Mr.
Taylor who is the president of the bicycle industry in the UK. The story has been the same over
the years of recession experienced in the economy of the UK. This implies the constant growth
in this industry. Over the years, UK’s bicycle industry is experiencing a renaissance-a growth
pattern, one that seems to boast the economy of the country. UK consumer value for cycling and
bicycles is expected to exceed 2.1 billion pounds; this will depict a 15% increase and a further
estimate of 3 billion pounds in 2015. The report further cites that 6% of the adult bikes purchased
cost over 1,000 pounds while the average cost of a bicycle in the UK surpasses 300 pounds.
Another estimate implies that the sale of bicycles will exceed 3.5 million units this year. The
trend in bicycle sales is most significantly represented in London where bicycle journeys have
increased by 117% since the year 2000 (Nielsen, 2010).
In the capital, people make journey everyday by bicycles. This figure is bound to increase
as 6,000 bicycles are available for hire in London by the Boris Johnson’s scheme. This can also
been attributed to the culture of people in the UK as the chief executive of Pashley, Adrain
William narrates. People have become most interested in this cycling culture from the norm of
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car travelling. At the 2012 Olympic Games, young people were encouraged to take up the
initiative of cycling for a better future. The cycle to work scheme that was introduced by the
labour government allows employees at workplaces to efficiently by bicycles tax-friendly; this
has significantly gotten people to buy bicycles and ride to work. This scheme has been relevant
for small bicycle retailers who have consequently performed well. The bicycle value has
increased in the UK so as the interest in cycling. Such imperatives have been felt as well by
famous manufacturers such as Pashley which supplies bicycles to Royal Mail. Customers are
now looking for individuality, and retro style designs in bicycles. People have become realistic
on requirements and they want functional bikes apart from the normal mountain bikes that were
good only for the mountain environment (Nielsen, 2010).
This renaissance in the bicycle industry together with the strength of the British market
makes it suitable for an iconic brand like Bianch to venture in this competitive market. Other big
names include a brand like Raleigh which once used to manufacture bicycles from Nottingham
factories. Raleigh is perhaps the most famous British bicycle manufacturer with productions of
350,000 units a year. However, despite these growth facets, there is a lack of government
support in the UK bicycle industry. For the past 30 years there has been no interest in
manufacturing. For you guys at Bianchi this is a crying call to invest in this ready market. The
lack of interest in manufacturing should instigate your presence thus enhancing recognition and
most importantly boast sales (Nielsen, 2010).
PEST analysis for UK market for Bicycle business
The PEST factors influencing the bicycle industry in the UK include;
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Political factors
Such as high-tax prices for bicycles in the UK. The government is keen in calling for
foreign company investors to venture in the UK market. Taxation policy, stable political
environment, and the labor law are other political factors affecting the market (Nielsen, 2010).
Economic factors
The recession in the UK is having a significant effect in the economy. Some of the
Economic factors in the UK include; the currency rate, the economic stability, and the rate of
interests. These facets impact the general operational activities of the business and its decisions.
The currency rate and rate of interest changes everyday hence no economic stability. Another
factor is inflation; it increases the costs of purchases and this in effect makes it difficult for new
players like Bianchi to enter the market (Nielsen, 2010).
Social factors
The demographic in the UK is skewed towards youths who have an appetite for
recreational activities like cycling. Literate people have a focus for a green environment and this
makes it more relevant for new players like Bianchi to tap the UK market (Nielsen, 2010).
Technological factors
Increased raw material costs such as steel and bicycle products might have a negative
impact on FDI and the UK market. However, the availability of technological innovations,
infrastructure, and the need for advanced tech-products makes it more suitable for Bianchi
bicycle Company to venture in the UK market (Nielsen, 2010). It is imperative for the
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management of Bianchi to consider the above PEST findings or imperatives in order to
understand the current situation in the UK regarding the bicycle industry.
Section 3
Recommendations
By analyzing critically the external environment factors facing the UK market, it is then
imperative to consider some strategies that Bianchi might implement in response to the PEST
analysis discussed above.

Review the price of the bicycles to compete effectively in this dynamic industry.

The demography in the UK surveys an increased youth population so it is important to
target these youths to boast the sales

Introduce low cost models that will enable everyone to access the products

Develop a distribution network in the UK this move will greatly boast sales

Build more innovative, design, and creative products for the youth who are are more
promising in regards to brand recognition and loyalty.
In conclusion, Bianchi Company is an iconic brand ready to venture in the UK market. It has
survived years by listening to its consumers. The company will continue to be successful
organizations as long as it maintains these strategies and put them into practice hence boast its
sales in the UK market.
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References
Concord. (2007). SolidWorks and COSMOS analysis software help legendary Italian
manufacturer speed innovations to market. Bianchi chooses SolidWorks to design better
high-end bicycles.
Dineen, R. (2013). Recreational Cycling. How Bianchi became an iconic bike brand. Retrieved
from http://www.telegraph.co.uk/men/active/recreational-cycling/10364933/HowBianchi-became-an-iconic-bike-brand.html
Nielsen, T. (2010). While other industries feel the pinch, the British bicycle business is thriving.
How long can its renaissance last? And just how good is it for the UK economy? Wheels
on fire.
PESTLE Analysis. (2014). What is PESTLE Analysis? A Tool for Business Analysis. PEST
Analysis. Retrieved from http://pestleanalysis.com/what-is-pestle-analysis/
Teik, T. C. (2013). SIM management 360. Importance of the External Environment. Retrieved
from http://m360.sim.edu.sg/article/pages/Importance-of-the-External-Environment.aspx.