Carbon Nation Cycling

A CASE STUDY ANALYSIS ON STRATEGIC MANAGEMENT Commented [RD1]: INCORRECT FORMAT

Commented [RD2]: 1.1.There should be no header and
footer on both the cover page and table of contents
1.2.The date on the cover page should be date of the
_______________ final hard copy submission
1.3 Follow strictly the format guidelines

Presented to
The Faculty
School of Management
University of Asia and the Pacific

_______________

By
Chua, Angela Sophia
Lim, Andrea Gabrielle
Pineda, Joseph Benjamin
Puray, Carlo Alexdave
Ramento, Jayce
Salanga, Danielle Zea

February 14, 2019

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 Carbon Nation Cycling

TABLE OF CONTENTS
I. INTRODUCTION……………………………………………………………….. 03
Company Background ………………………………………………………….. 03
II. RESEARCH DESIGN AND METHODOLOGY………………………………. 09
Information Sources …………………………………………………………….. 09
Research Methodology …………………………………………………………. 09
Major Assumptions ……………………………………………………………... 10
III. COMPANY’S VISION AND MISSION ……………………………………… 11
X. BIBLIOGRAPHY………………………………………………………………. 13
XI. APPENDIX ……………………………………………………………………. 14
Appendix A ………………………………………………………………….. 14
Appendix B ………………………………………………………………….. 14
Appendix C ………………………………………………………………….. 15
Appendix D ………………………………………………………………….. 15
Appendix E ………………………………………………………………….. 15
Appendix F ………………………………………………………………….. 16

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I. INTRODUCTION Commented [RD3]: REDO INTRODUCTION

History and Company Background

Carbon Nation Cycling (CNC) is a micro-business involved in the scientific craft of

wheel building, pioneered by Edward Perlas, situated in Pasig City, Philippines. The humble Commented [RD4]: POOR GRAMMAR

beginnings of the brand initially began in 1990 with his interest in cycling, which developed
into a passion when he started road bicycle racing in 1999. During races, he observed recurring
problems of misaligned wheels or broken spokes. Although this was not uncommon to cyclists
during that time, he believed that these challenges greatly contributed to the inefficiency of the
wheels thereby decreasing chances of winning. Wheel builders and mechanics would submit to
the idea that the accepted standard was to build wheels and get them retuned after short periods
of time. He had his heart set on learning more about the science behind the craft, challenging
the processes involved – or lack of it, and eventually increasing the quality of bicycle race
wheels. Through the years, he improved and set the standard for the Philippine Cycling Industry.

Nature of Business Commented [RD5]: It doesn’t make sense

According to the 2009 Philippine Standard Industrial Classification, there are five levels
of disaggregation. The first level is a section represented by a one-digit capital code. The second
level is the division, which is represented by two-digit numeric codes. Groups is the third level;
a more detailed version of aggregates which is denoted by three-digit numeric codes. When
groups are subdivided further, these are known as classes, represented by four-digit numeric
codes. When a class is divided into a specific category, this is called a sub-class with a five-digit
numeric code (National Statistical Coordination Board, 2009).

Appendix A shows the Philippine Industrial Classification of the company lies in Section
G - wholesale and retail trade; repair of motor vehicles and motorcycles involving wholesale
and retail among any type of goods and rendering services supplementary to the sale of these
goods. This section also includes the sales without transformation such as the usual operations
or manipulations associated with trade, like sorting, grading, assembling of goods, mixing,
bottling, packaging, breaking bulk and repacking for distribution in smaller lots, storage,

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cleaning and drying of agricultural products. Wholesaling and retailing are the final steps in the
the distribution of goods, also known as merchandise. The 47th division revolves around retail
trade except of motor vehicles and motorcycles, while the 476th group focuses on the retail sale
of cultural and recreation goods in specialized stores. To narrow it down further, the class
involves the retail sale of sporting equipment in specialized stores, such as sports goods, fishing
gear, camping goods, and bicycles. Herewith is the sub-class referring to the retail sale of
sporting goods and aesthetic supplies (National Statistical Coordination Board, 2009).

Products Commented [RD6]: Are they manufacturing, distributing,

repairing
Prior to the discussion of the bicycle wheel categories offered by the company, the brand
Commented [RD7R6]: What is the actual nature of
would like to introduce the three major parts of a bicycle wheel which are the hubs, spokes, and business?

rims as seen in Appendix B. First, the hubs are referred to as the mechanism that rotates at the
center of the wheel. Second, the spokes are pillars that support the hub and the rim. Third, the
rim is the circular frame of the wheel where the tires are placed. Moving forward, Carbon Nation
Cycling offers four categories of bicycle wheels that are assembled by hand, which are Road
and Multisport, Road and Gravel Disc Brake Specific, Carbon-Aluminum Road and Multisport
and Off-road. First, Road and Multisport Wheels are mainly used for bikes on cement roads and
in sports like triathlons. Furthermore, this category that generates the most revenue for the
company. Second, Road and Gravel Disc Brake Specific Wheels are used for the two kinds of
brakes which are the Rim and Disc. The Rim Brake Wheel requires the use and pulling of caliper
brakes to produce friction on the rim’s braking surface leading to the decrease in speed. While,
the Disc Brake Wheel requires the use of rotors installed on the wheels’ hub to produce friction
that would cause a decrease in speed. Third, the Carbon-Aluminum Road and Multisport are
similar to the first category but the brake tracks are made of aluminum instead. This differs from
the first category of Road and Multisport Wheels since the aluminum brake surfaces have better
braking power than full carbon brake surfaces. Fourth, the Off-road Bicycle Wheels are designed
for mountain bikes. Each category of bicycle wheels is custom made to suit a specific type of
terrain, in terms of weight, stiffness and rotational mass.

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The list of products available per category are noted below:

a. Road and Multisport

1. 24 mm Low Profile 7. C3 Aero Racing Wheels

2. 38 mm Aero 8. 650c 50 mm Aero

3. 50 mm Aero 9. Full Disc Rear Wheel

4. 60 mm Aero 10. Full Disc Track Rear Wheel

5. 60/88 Aero 11. Tri-Spoke Wheel

6. 88 Aero

b. Road and Gravel Disc Brake Specific

1. 38 mm Disc Brake Specific

2. 55 mm Disc Brake Specific

3. 60 mm Disc Brake

c. Carbon-Aluminum Road and Multisport

1. 38 mm Aero 4. 60/88 mm Aero

2. 50 mm Aero 5. 80 mm Aero

3. 60 mm Aero

d. Off-road

1. 26 inches (26 inch)

 27.5 inches (650B)

 29 inches (29er)

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Services
Carbon Nation Cycling offers three services with reference to bicycles, namely tuning
and repair of wheels and repair of carbon frames. Tuning of the wheels involves adjusting the
spoke tension by tightening or loosening the nipple or the threaded nut (ParkTool, 2015). As for
repairing wheels, this involves an initial assessment to check if the damage on the wheels as
indicated by the consumer are within the company’s capacity for repair. Similar to the repair of
wheels, the company offers the repair of carbon bicycle frames where there is an initial
assessment to gauge the company’s capacity for mending the damage.

Current Revenue Size and Profit Commented [RD8]: On what business was this
generated?
The business currently earns an eight-digit figure for their revenue and retains a seven-
Commented [RD9R8]:
digit figure for their profits. As of 2018, Carbon Nation Cycling garnered a revenue of Php
10,965,638.20 and a profit of Php 3,594,056.04.

Major Markets Served

Carbon Nation Cycling caters to Filipino cyclists in the Philippines, most especially
those who are situated within Metro Manila. As stated by Mr. Perlas, the owner of the
aforementioned business, he caters to a wide age bracket of Filipino cyclists, specifically thirteen
years old to sixty years old. Mr. Perlas indicated the age bracket of the consumers that he caters
to and this can be seen in Appendix C. This shows that most consumers belong to the age bracket
of twenty-five years old to thirty-four years old. Also, there is a notable percentage of consumers
belonging to the age bracket of thirty-five years old to forty-four years old alongside with forty-
five years old to fifty-four years old. On the other hand, the fewest consumers belong to thirteen
to fourteen years old. These consumers either bike for sport or for leisure. Those who bike for
sport are known to be individuals who take part in both local and international competitions.

Organizational Structure Commented [RD10]: ???

The owner of Carbon Nation Cycling is the only employee and he is currently looking
for other individuals who possess the interest for building bicycle wheels. He currently handles
five facets or areas of the company which are Administration, Procurement, Production, Quality
Control, and Sales and Marketing. The Administrative area revolves around the management of

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all the other key areas to ensure that plans and strategies are carried out in order for the
organization to perform efficiently. In line with this, the same area handles accounting, financing
and budgeting. The Procurement area is responsible for the issuance of purchase orders,
develops contracts with the supplier and acquires supplies and services necessary for the
operations of the business. The same area is also considered responsible for tracking the
purchase orders made and taking them into account as soon as it reaches the store premises. The
Production area revolves around the building and repairing of the aforementioned bicycle
wheels. Moreover, the area also creates the schedule or timeline as to when the wheels will be
built until it is claimed or delivered to the consumer. The Quality Control area is responsible for
checking whether the products meet all the standards through thorough auditing the precise
measurements and conditions for each wheel and repair done. The Sales and Marketing area
involves finding potential clients and building on their current consumer relationships.
Furthermore, this area is where the brand’s image through online, specifically social media
platforms such as Facebook and Instagram, and on-ground campaigns is established.

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II. RESEARCH DESIGN AND METHODOLOGY

Information Sources
Given that the business being studied lies within a specialized industry, data and other
points of information is not easily accessible due to the fact that it caters to a niche market.
With that in mind, most of the information that will be used for the research is based on
primary data, specifically interviews and surveys. However, historical information regarding
its competitors and their respective backgrounds, most especially its financial statements, will
be obtained from documents filed to the Securities and Exchange Commission (SEC) of the
Philippines. Other sources of information will include news articles, books, magazines,
previous research, electronic journals, online databases, digital libraries and the internet.
Regardless of the fact that most of sources of information may be based in other countries
worldwide, these are considered crucial in understanding the business and the industry better.
Furthermore, the behavior of the target market is similar to those referred within the sources
of information.

Research Methodology
The researchers shall make use of the two main sources of data which are primary data
and secondary data. Primary data is based on the interviews conducted frequently with the
owner of the business as well as its customers (Ajayi, 2017). The customers that will be
interviewed may possess variations in terms of brand loyalty and awareness in order to give
the proponents a more in-depth understanding of the consumers’ view of the brand. Since
majority of the information gathered relies heavily on primary data, there could be notable
discrepancies when it is compared to the secondary data for further validation and assessment.
As for the secondary information, the backgrounds and historical information with regards to
the company’s competitors will be obtained from the Securities and Exchange Commission
of the Philippines. Other forms of secondary information are based either in print or online
(Ajayi, 2017). For print, news articles, books and magazines will be utilized. However, these
sources of information focuses heavily on the consumer experience of using the wheels built
by Carbon Nation Cycling. As for online secondary data, previous research, electronic

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journals, online databases, digital libraries and the internet will be crucial for the researchers
to become more knowledgeable with the terminologies, processes and standards determined
and unique only to the industry being studied.

Major Assumptions
Since most of the information gathered is sourced from primary data, the research may
be prone to assumptions. Taking into account that the company being studied is classified as
a micro business, there is no prior research being done regarding its consumers. An example
of this kind of assumption are the aforementioned age brackets of consumers that the company
caters to. Another point to consider is the unique traits and qualities of the specific industry,
which highlights there could be assumptions based on the competitors of the company
comprising varying sizes of businesses. This would entail varying points of consideration with
regards to the industry and competitor analysis, especially since other competitors are
businesses that actually offer not only parts but the entire bicycle itself. Moreover, the
company’s growth comparison would require the need of assumptions to create financial
projects for both the short and long term. This is also in line with the recommended of
organizational strategies, since the financial health of the company would determine how the
other key areas will operate when striving for success.

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III. COMPANY’S VISION AND MISSION

Vision Statement
Carbon Nation Cycling (CNC) aims to be the most trusted brand of handcrafted high-quality
Carbon Race Wheels within the Philippine Cycling Community.

Mission Statement Commented [RD11]: Explain explicitly the nine

components as reflected in the mission statement
Carbon Nation Cycling (CNC) provides handcrafted Carbon Race Bicycle Wheels with high
precision and quality that defines workmanship and excellence while creating passion and value
for its stakeholders.

Given that Carbon Nation Cycling has no current vision and mission, the proponents of
the research proposed such, since this will serve as the very backbone of the framework for the
Strategic Analysis of the company. The mission and vision were done with the mission and
vision competitor, Mega Ideal Enterprise (refer to Appendix D), accompanied by the company’s
core values as the basis (Mega Ideal Enterprises, n.d.). The company is founded on three core
values, which are workmanship, excellence, and passion. First, workmanship emphasizes the
quality of a job well done. Second, excellence refers to the company’s pursuit to build credibility
for being the best of the best by continually exploring innovative initiatives to make every
customer’s cycling experience worthwhile. The cycling experience refers to the satisfaction or
enjoyment level of the consumers with regards to the use of the company’s products and services
availed. Lastly, by sharing the love for the sport with its customers, the business showcases how
passion is its very essence and foundation. Bearing in mind that the vision and mission
statements were formulated based only on initial research, there is still much room for
improvement, especially when the researchers have fully grasped the current position of the
company and what it aims to be in the future. For the vision statement, it would assist the
company to keep track of its goal; while the mission involves the objectives and strategies that

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the company has to take in order to achieve the goal that they have set, making this more
realistic.

According to Mr. Rajasekar (2013), there are nine (9) essential components to be taken
into consideration in the analysis of a company’s mission, which are as follows - (1) Customers,
(2) Products and/or Services, (3) Markets, (4) Technology, (5) Concern for Survival, Growth,
and Profitability, (6) Philosophy, (7) Self-concept, (8) Concern for Public Image and (9)
Concern for Employees. Five out of the nine were incorporated into the proposed mission, which
was accepted by the owner, Mr. Perlas. The five refers to the Products, Concern for Survival,
Growth, and Profitability, Philosophy, Self-Concept, and Concern for Public Image. Each will
be discussed according to the arrangement in the mission statement. Fist, the Concern for
Survival, Growth, and Profitability refers to building an emerging presence with regards to
becoming the trusted brand by becoming the market leader of the industry. The owner does not
feel the need to explicitly state how the company envisions to be on top since it is the same
vision of every other company. Second, the Product refers to Carbon Race Bicycle Wheels,
which caters to several Philippine competing teams in cycling as a sport and multi-sports that
require cycling such as duathlons and triathlons. Third, the business’ Philosophy of high
precision and quality is deeply rooted in its core values of workmanship, excellence, and
passion. Fourth, Self-concept refers to the company’s competitive advantage which is
exceptional workmanship crafted by science and proper calculations. Fifth, Concern for Public
Image involves creating passion and value for its stakeholders which is done by sponsoring
several striving cyclists and the Women’s Philippine National Team to compete on an
international scale like the SEA Games. As for the vision, the company views itself on becoming
the top by being well-known for its product developed by unique craft and skill within the next
six (6) years. Six years was a given timestamp since the owner feels that he has already gotten
the lay of the land is truly on the road to capture a large share of the market.

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X. BIBLIOGRAPHY

Ajayi, Victor. (2017). Primary Sources of Data and Secondary Sources of Data.
10.13140/RG.2.2.24292.68481. Date retrieved, February 10, 2019

Mega Idela Enterprises. (2018). We are Mega Ideal Enterprises. Megabikesph.com/v2. Date
retrieved, February 13, 2019.

ParkTool. (2015). Wheel and Rim Truing. Parktool.com. Date retrieved, February 10, 2019.

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APPENDIXES

Appendix A
Table 1. The Philippine Industrial Classification

Item Code Description

Section G Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles

Division 47 Retail Trade Except of Motor Vehicles and Motorcycles

Group 476 Retail Sale of Cultural and Recreation Goods in specialized stores

Class 4763 Retail Sale of Sporting Equipment in Specialized Stores

Sub-class 47631 Retail Sale of Sporting Goods and Aesthetic Supplies

Source: National Statistical Coordination Board, 2009

Appendix B
Figure 1. Three Major Parts of A Wheel

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Appendix C
Figure 2. The Age Group of Consumers that Purchase Products and Avail Services of Carbon
Nation
Cycling

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Appendix D
Figure 3. The Organizational Structure of Carbon Nation Cycling

Appendix E
Competitor’s Mission and Vision Statements
Competitor: Mega Ideal Enterprises

Mission:
Mega Ideal Enterprises traces its roots back in 1987 as a company who first started distribution
of entry-level steel bikes and components, due to its business philosophy characterized by its
pursuit of excellence, Mega Ideal now with more than 3 decades of experience and a
continuously growing distribution network consisting of over 500 dealers throughout Luzon,
Visayas, and Mindanao has now continued to be one of the top leaders in the distribution of
cycling products in the Philippines.

Here at Mega Ideal Enterprises, we have been striving to distribute quality bicycle products
nationwide for a period of over 30 years now (Mega Ideal Enterprises, n.d.).

Vision:
As our company strives to be the top source of bicycle products in the nation and as we try to
exceed our customers’ expectations we have brought in a number of trusted brands from across

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the globe, making our wide range of quality cycling products available to every Filipino (Mega
Ideal Enterprises, n.d.)

Appendix F
Explanation for Mission of the Competitor

Carbon Nation Cycling’s main competitor, Mega Ideal Enterprises, offers steel bikes and
components as their Products, which is the second out of the nine qualities for a mission
statement. The competitor also notes that their business Philosophy representing the sixth quality
is characterized by their pursuit of excellence. Following this is the Markets that the business
caters to, which generally is the Philippines, specifically Luzon, Visayas, and Mindanao. Lastly,
the Self-Concept involves their competitive advantage claim is their way of doing business
which is distributing quality bicycle products, since other brands may offer the distribution of
other bicycle products that are not of quality.

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