Analysis of Revenue & Profit Margin to Increase Profit in Global Bike Inc. United States — Part 4
using Power BI
The final article of GBI. In previous article (here), discuss about data analysis, information analysis, and knowledge analysis of GBI. This last article will discuss the relationship between those three analyses and provide the solutions to improve revenue & profit margin in GBI US.
Some GBI US customers did not buy bicycles because the professional bicycle race in the US was cancelled due to the COVID-19 pandemic. This has led to sales of professional bikes, and touring bikes declined sharply in 2020. In addition, from historical sales data GBI US, it is known that the sale of off-road bikes like the Women’s Off-Road Bike and Men’s Off-Road Bike is a product bike has the lowest sales compared to other bicycle products. This is because GBI’s product strategy is more focused on selling touring bikes than off-road bikes. Then, it was discovered that DC Bikes and Motown Bikes had not made any more purchases from GBI since 2015. This could have happened because DC Bikes and Motown Bikes were more focused on selling non-professional bikes. Therefore, further analysis is needed to determine what causes DC Bikes and Motown Bikes to no longer buy GBI products. In addition, it is known that Silicon Valley Bikes did not make any transactions in 2020. This could be due to the COVID-19 pandemic, which has affected Silicon Valley Bikes’ desire to buy professional bikes.
Moreover, it is also known that consumer bicycle sales are becoming a trend in 2020. Bicycle sales have increased dramatically because people in the US chose to cycle during the COVID-19 pandemic. In addition, the trend in society shows that e-bikes are one of the innovations of consumer bikes that will become a trend in 2020. E-bikes can replace public transportation, cars, or other vehicles because of their simple and environmentally friendly shape. Furthermore, studies suggest that the use of online advertising can increase revenue from the sale of goods. The figure below shows a SWOT (Strengths, Weakness, Opportunities, and Threats) analysis based on the analysis results that have been carried out.
After knowing the things that affect the revenue and profit margin decrease GBI US, here are some solutions and strategies that can be used to increase revenue and profit margins GBI US in the following months in 2020:
- Conduct a customer satisfaction survey with GBI US customers. The purpose of this survey to determine the quality of GBI bicycle products and services in order for GBI can evaluate its business performance so that it can return customer interest in buying GBI products. Questions that can be included in the survey can be in the form of questions related to the quality of GBI service, the quality of the product produced, things that can be improved from bicycle services or products, and others.
- Focus sales on non-professional customers (non-organizational customers) and bicycle accessories. This is due to the COVID-19 pandemic, which has made some people choose to do outdoor activities by cycling. So it is hoped that focusing on non-professional customers and bicycle accessories can increase GBI’s revenue and profit margins in 2020.
- Using online advertisements (such as mobile or desktop advertisements) to increase revenue and profit margins. Online advertisements are proven to increase sales of a product, as explained in the previous chapter.
- Making innovations from bicycles, such as e-bikes. This is evidenced by the increasing number of search results for the keyword “e-bikes” in 2020. So with the sale of e-bikes, it is hoped that it can help increase revenue and profit margins in 2020. In addition, selling e-bikes can also be used as an initial step for GBI to focus on non-professional customers.
Figure above is a product development flowchart that GBI US can use in designing e-bikes products. This flowchart starts from the concept & research stage, where at this stage it focuses on studying the market, competitors, potential growth, and customer needs for e-bikes. Next is the analysis stage. At this stage, it focuses on analyzing the costs incurred from making e-bikes, the materials for making e-bikes, the profit margins that can be generated from selling e-bikes, and the specifications of the e-bikes that will be made. The next stage is development, where an e-bike prototype is built according to the specifications carried out in the previous stage. At this stage, testing & quality assurance will also be carried out on the products that have been made. Furthermore, this stage will also carry out a user test to get criticism and suggestions from the user for the prototype that has been made. The last stage is the deploy stage, where at this stage, GBI focuses on planning marketing strategies, distribution, sales training, and determining the launch date of e-bikes.
Singh, S. (2020). What are the Seven Stages in the New Product Development Process? [Online]. 2020. Net Solutions. Available from: https://www.netsolutions.com/insights/everything-about-new-product-development/. [Accessed: 16 May 2021].