In 2004, over 18.3million bicycles were soldin theUnitedStates. According to industryytrade reports,the total retail value of bikes,partsandaccessorieswasmorethan$5.7billion.TherearehundredsofbicyclemanufacturersintheUS,however,most are small, specialized firms. Pacific Cycle, which designs,markets, and imports a full range of bikes and recreation products under such familiar names as Schwinn, GT, Mongoose, pacific lnSTEP, Roadmaster, FlexibleFlyer,Powerlite,Murrayand Dyna sells more bicycles than any other company in the UnitedStates.Its powerful brand portfolio serves virtuallyall consumer demographics,price categories, and product categories,from children to mountain bikes to racingbikes).

Pacificis one of the fastest-growing branded consumer companies in the United States.Ithas achieved its success bycombining its aggressive acquisition of power brands with low-cost outsourcing, efficient supply-chain management, and multi-channel retail distribution. Distributors include leading mass-market retailers such as Wal-Mart, Target, and Toys-RUs,sporting goods stores such as Dicks,and Sports Authority, andindependent dealers serving local markets.The company'sbrands appeal to a full spectrum of demographics,price preferences,and image and usage criteria that are critical to targeting the key consumer segments served by each channel.This broad-based marketing strategy enables Pacific to provide retailers with one-stop shopping and to respond efficiently to changes in the marketplace.Pacific cycle was recently acquired byDorallnc.

Another successful bike manufacturer is Trek Bicycles. It has revenues that are similar to that of Pacific Cycles. It was founded by partners Richard Burke and Bevin Hoggin1976.With $25,000 in seed money,BurkeandHogg startedbuilding bikes by hand in a Wisconsin barn.From thebeginning,theytargeted upper-end users and success came quickly. Today, customers pay top dollar for smooth suspensions,custom paint jobs, and innovations in racinggeometry.With annualsales of $400 million, Trek is now the country's number-one manufacturer of high-quality bikes and was perhaps the first US bike maker to overcome European resistance to American-made cyclesbyfocusing on quality and innovation which have long been the company's hallmarks. Trek introduced its first mountain line in1983,the first bonded aluminum bike in 1985, and a carbon-fiber road bike in1986.

Although the firm has mostlybeen fueled byinternally developed products,Trek has made a few strategic acquisitions including Gary Fisher mountain bikes and two other mountain bike manufacturers. Trek now makes various types of bicycles including mountain, road,children's, police bikes, and BMX bikes. Internationally,Trek bikes are sold through wholly-ownedsubsidiaries in seven countries and through distributors in 65 others. Trek designs all of its bikes at its Wisconsin headquarters and manufactures a quarter of them in the US Finally,sponsoring seven-time Tour-de-France winner Lance Armstrong has given the company tremendous exposure and the centerpiece for a marketing plan that can be summed up as "Lance,Lance,Lance".

Whereas Pacific Cycle and Trek represent the larger players in the US market, Montague fits the profile of aboutiquestylebikefirm.FrustrationpromptedHarryMontague,aWashingtonDCarchitectandinventortodeveloptheMontagueline of high-performance,travel-friendlybikes.He was unable to find anything but small-wheeled folding bikesandthey were both uncomfortable and inefficient for serious cyclists who wanted to take their bikes in the car or onpublictransportation. After much trial and error, Montague succeeded in developing a full-sized high-performance folding bike that he then custom-built and sold out of his garage for DC areariders.

The business moved out of the garage when Harry's son David was required to write up a business plan for a course in entrepreneurship at MIT. After passing the course, David and his father formed the Montague Corp, to design and produce full-size bicycles that sacrifice little in performance while providing convenience for a target market of customers. Today Montague is the world's leading manufacturer of folding bikes. All Montague's bikes fold into a compact size in less than 30 seconds without the use of tools. They have been sold to the military for tactical- use and to several car manufacturers for promotional packaging withSUVs.

Each of these companies is in the same industry, but each of them pursues a very different business strategy. Using your knowledge of Porter's generic strategies:

1. Identify the generic strategy of each firm, the benefits of that generic strategy and the pitfalls associated witheach.

2.How could each company combine generic strategies to produce an advantage that is both inimitable andsustainable?