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Relevant branch
On a local scale, the relevant branch also known as Fahrradverleih in German
has strongly been linked to the amount of tourists coming to Papenburg every
year. Now that the Meyer Werft, a gigantic local shipyard for luxurious cruise
ships, has become a touristic attraction, tourists have been flocking to the
Papenburg area in ever larger numbers. It is unknown whether this growth will
persist.
The current amount of locally rented bikes annually is 25.000. With prices
averaging around 8 Euros, the annual market turnover is therefore 200.000 Euros
per year. This deliberately excludes indirectly competing goods and services,
such as car rentals, for example. These are not part of the relevant branch. Based
on the expectancy to gain market share as years pass, Papenbike expects to own
35% of the market after 5 years. Within 5 years, Papenbike expects to have
rented 34.000 bicycles, based on gradually increasing bicycles rented per year,
starting with a meager 4.000 in the first year.
Currently the markets competition consists solely of two companies, [] and
[], with a market share of 40 and 60%, respectively.
Trends
Trend-wise, consider the following DEPEST-factors, while considering the target
group to be tourists from Germany:
Demographic
The population of Papenburg is severely aging at an alarming rate. People
are moving out of Papenburg. Tourists, however, remain a growing factor in
the increasingly deserted area of Papenburg. It is expected that the
relevant market will therefore remain more or less the same, as it is
intertwined with the success of the Meyer Werft, the worlds largest
shipyard.
Economic
As previously mentioned, while the German economy has skyrocketed
between 2000 and 2010, recent years have shown to be less spectacular.
The GDP per capita now lies slightly under 50.000 Euros per year, and is
assumed to remain more or less the same. Germanys GDP per capita is
relatively high, compared to the rest of Europe.
Political
Germany, along with the rest of the European Unions members, has
hopped on the sustainability train, setting goals to be less reliant on
traditionally popular and polluting modes of transport. In turn, this affects
the usage of bicycles and e-bikes, as the Germans seek to be more
sustainable in the future. Slightly, anyway.
Ecological/Technological
While partially also a technological development, the increasing popularity
of electric bikes, or E-Bikes, has shown to be a promising substitute good
for scooters and other such vehicles. As a result, CO2 emissions are
expected to drop.
Social-cultural
Prices
Competitors have been charging between 7,50 and 8,00 per bicycle rented per
day, whereas Papenbikes are slightly more expensive, at 10,00 Euros. Due to the
lack of transparency related to knowledge of pricing among tourists, this will
probably not matter much. In addition to this, the price is higher because
Papenbike offers additional services, such as the deployment of bicycles and the
multiple drop-off spots scattered among the area.
Because we are dealing with a rental service, it is highly difficult to estimate the
yield, because the only variable costs are depreciation.
Competitive Analysis
In order to analyze the competition on a MESO level, Porters Five Forces is
frequently used to describe the forces correlated to the market environment.