Creating new consumer demand through innovation: Shimano

Shimano (I)

  • Shimano is the leading bike parts manufacturer.

  • In 2003, Shimano was comfortable with its profit growth but it realized that their existing market was near to decline.

  • Shimano’s consumer base was made of “bike obsessed” who were inspired by Lance Armstrong, the world champion at that moment.

  • Actually, Shimano’s growth was coming from the introduction of more expensive professional bikes, while the convertion of new consumers was critical.

  • Shimano had a great reputation with the bike makers and excellent relationships with the bike’s dealerships who sold them to the public.

  • Shimano took a strategic decision: to focus on the 161 million American adults who didn’t ride a bike.

Shimano (II)

  • For them, biking was too complicated and expensive and it was too intimidating to walk into a bike store full of strange terminologies.

  • They wanted something simple that they could roll out of the garage and use. And, their only aspiration was to interact socially and to loose weight.

  • These insights were a total departure from the kind of technical conversations held at Shimano. But, the company did listen and it took action.

  • Shimano developed the platform for the “coasting bike” and the “coasting experience”. The seat was wide and the gears were hidden in a box and they changed automatically depending on the terrain. This thanks to a microprocessor invented by Shimano.

Shimano (III)

  • Shimano showed the prototype to its three biggest customers: Trek, Giant and Raleigh. The three bought the idea and they created their distinct models using Shimano parts.

  • Furthermore, the three manufacturers worked with bike dealerships on how to sell the bikes to this new class of consumers.

  • Shimano identified the most “bike friendly” cities in America to lobby for more safe places to ride and let people know about them.

  • “Bicycling” magazine also gave its blessing choosing to give away coasting bikes in its annual Biketown promotion.

  • Shimano, bike manufacturers and bike distributors had great benefits from this innovation turning around a stagnant market.

  • The features of the coasting bike all existed before, but Shimano was capable of integrating all pieces together.

  • Very importantly, Shimano did all this while the company’s financial results were still good.

#Brand #Business #BusinessCase

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