1. What is the competitive environment facing EDC?

After some time, Mr. Rita came to know about a new company dealing in mountain bikes with unique fea- tures. Mountain bikes with front suspension were the latest trend. But such bikes were expensive. EDC, too, had an entry in this product category, retailing for about Rs. 5000. For years, the company had concentrated its efforts on inexpensive bicycles, ranging between Rs. 2000 and Rs. 6000. EDC's prices were slightly higher than other low-end competitors, but large retailers were willing to pay for it because of EDC's consistent good past record like offering many state-of-the-art designs and unique and latest features with quick, timely deliveries which are far better than competitors and even overseas competitors. One of the reasons the company had been so successful was the operating region which was providing a market with tremendous consumption. EDC employees at all levels of the company shared a genuine love of bicycling and eagerly pursued knowledge of the industry's latest trends and styles. They were always suggesting a better way to improve product(s). Even EDC was continuously engaged in testing prototypes. Also as per Ms. Rita's strategy, all departments were working in same campus. Communication was easy, and changes in styles, production plans, and the like could be made quickly and efficiently. For example, Mountain bikes had gone from a transition period of continuous growing demand, and EDC had met the increased demand with ease. EDC had also benefited from its venture into the high-end market. One of Rita's first moves as CEO had been to enter into a joint venture with well-known Italian bicycle manufacturer that at the time was specializing in racing models. As part of the agreement, EDC had begun importing bikes of the company and selling them through specialty bike dealers. Also the Italian company marketed EDC's bikes outside the Indian and it resulted in 20% increase in sales. Such relationships also helped keep EDC management aware of the latest industry trends. It also resulted in a move toward more exotic frame materials like aluminum and carbon fiber and more advanced compo- nents, including the new front-fork suspension systems.