A.

STRENGTHS
Many striking features of Cyclermate Company are shown clearly through its expertise
workforce. It has skillful engineers gathered together to meet the volume on time. Besides, the
high quality of the hand-made product is another crucial reason making its business expand. In
addition, the word-of-mouth reputation is another major factors help this business succeeds.
Furthermore, it takes advantages of the relatively low prices of commercial and industrial
property.
B. WEAKNESSES
It is obvious that shambolic production process has heavily damaged the sales and profits gained.
Unsuitable roles and duties division can be blamed for this problem. Some have to manage so
many duties and tasks while others own so much spare time. Furthermore, the aging workforce
endangers the productivity level.
Another obstacle worsens the condition is the weak training system. Fred, who is 18 years old, is
a new worker in the field so it takes so much time to train him which also harms the production
recently.
Also, old machinery such as traditional spaying technique, painting and low-quality stock control
technology needs updating as soon as possible if the business hopes to improve the production
and sales in the coming time.
Moreover, decline in sales show that marketing strategy of this company has problems.
Apparently, it should be considered to be changed to online selling or online promotion
immediately because globalization is widespread and making use of cyberspace is not a bad idea
at all, in fact, many companies mostly succeed thanks to effective marketing campaign and
successful advertising methods. Traditional adverts on national papers are no longer popular in
our modern times.
Besides, the managerial system also has matters. The managerial system inside the company
such as company cultures, employee behavior, etc requires strict control, however, Lewis
Llewellyn focus more on production issues and Dai on external relations. Obviously, the
company is in serious shortage of labor and executive managers.
Lastly, financial matters such as loss of profitability and rising overdraft are causing bad
reputation and rapid fall in the share price.

C. OPPORTUNITIES
The product they selected was a traditional upright cycle, following a design typical of the
1940s and 1950s which created a strong niche market for this such product and would be given
the upsurge in interest in cycling and the increasing consumer interest in retro styles.
Another opportunity is that there would be a strong growth in their business because of the
decrease in the number of people using cars. The opportunity created from the meeting between
Amstrong and Owen helps him to have some expertise in new technologies that might be an
interesting way to develop product. The upcoming changes in human resource, followed by Mr
Jones who interjected that the quality problems could probably all be solved if the directors
would allow the employment of more staffs in the factory and the plans for future directions,
including development of the product range, and the introduction of new ways of working, new
materials and possible outsourcing of manufacture parts of the product manufacture point out the
new development of their business.
D. THREATS
It can be seen that the biggest trouble Cyclermate is facing is their bad credits toward the bank.
In 2010, the business is in trouble, the demand keeps going down despite the price reduction.
This significant decrease in sales together with the increase in costs may last for the coming year.
Therefore, Cyclermates overdraft is now becoming the major concern of the bank manager. So
far, it is not easy for them to borrow money and this cause a lot of problem especially when they
really need money to save their business. Besides, they also need to deal with their sales. Their
customers demand high quality products and to meet this, they have to upgrade their producing
system which will cost a lot. But, as the fact that they almost depend on their world-of-mouth
reputation so it may be completely strange and challenging for them at first.
2. PEST analysis
A. POLITICAL FACTORS
Strict safety standard and consumer protection laws are Cyclermates priority. By 2010, their
products continuously cause accidents. Customers keep complaining about the quality and faults
in the products. One even got risk and intends to sue the company due to an accident purportedly
caused by incorrectly assembled front brake. These mistakes made Cyclermate become a target
of health and safety agencies. They have to improve the quality or else they can be stuck in
authorized issues. On the other hand, they also need to achieve higher standard in manufacturing
to meet requirements of the market, especially foreign markets.

B. ECONOMIC FACTORS
In a condition of high petrol prices recent years, many entrepreneurs find difficulties in
producing and running their own business. Electricity is not an exception. Moreover, with the
high cost in during manufacturing such as materials, facilities, the cost of products in the market
does not avoid increasing. That is also the essential reason explaining the consumption in the
world is in downward trend
High costs also influence on delivery of this company, it prevents to expand the brand name and
products to customers who live far away. Furthermore, it also interfere the import or export
process because of tax, and ship costs.
Finally, after wasting much money to purchase materials, or investing facilities and technology,
spending on marketing or delivery and paying salaries for their workers, the last profits of
Cyclermate Ltd cannot be good and high. If the sales of this company are not able to improve,
the worst case will happen is to go bankrupt, seriously.
Cyclermate Ltd receives high competition from market because many rivals open more and more
factory to produce bicycles in England, such as Carrera, Charter Lea.... The competitiveness is
higher and higher when there are new styles, color and reasonable price from competitors. The
customers have lots of choices to select and purchase a bicycle which is stylish and suitable
price.
Another factor in economics that affects to the development of Cyclermate Ltd is labor. The
unemployment rate is increasing, therefore, this is a good chance for this company to choose
worker more easily, and employ them easily with affordable price.
C. SOCIAL FACTORS
High-speed innovation as well as the increasing demands of consumers requires Cyclermate to
change and improve every day.
Firstly, living standard of clients can affect to their choices. The higher income distribution they
get, the higher demands they require. For example rich people want to ride an expansive and
showy "retro" bicycle, but another client with medium wages just want to ride a nice quality
bicycle. This point makes Cycler mate to diversify their price which is suitable for everyone in
this communication. Besides price, design and color could be elements would make people to
buy Cyclermate bicycle. The variation in design as well as color will attract children and
teenager and give clients more options. Moreover, helpful accessories and functions are also

important things that will affect to the survival of Cyclermate. A useful bicycle which is light and
keep money in or save space in house will be the best choice for everyone. In addition, a
friendly-environment Cyclermate bicycle will be more popular and keep up with the friendlyenvironment trend in the world.
D. TECHNOLOGICAL FACTORS
In parallel of development of economics, high technology involves specifically the Internet. The
Internet is used worldwide and it becomes a necessary tool for many customers to order online. It
is extremely convenient and quick to book or order in the Internet instead of calling or going
directly to offices.
Cyclermate Ltd is using the oldest way to advertise their products by posting advertisement in
traditional newspapers. It has limited their goods to the customers. Instead, this company can set
up its own website. They can post products, events, activities of company in to that page in order
to customers following easily. Facebook is the possible choice of any entrepreneurs, because the
customers can catch the new trend in this page. Moreover, the Internet is the cheapest method for
advertising.
More and more clients require high quality of products. Therefore motivation or investment
money on modern manufacturing system is extremely important. It reflects not only the
assurance about quality but also confirm the level position of company. With high level and the
most modern machinery, the company will surely create trust to customers.
3. Financial Ratios Analysis
A. THE DIFFICULTIES:
- Liquidity and debt ratios:
Current ratio = Current assets/Current liabilities =0.85
Quick ratio = (Current assets Inventories) / Current liabilities = 0.76
Debt ratio = Total debt / Total assets = 0.38
By analyzing the financial ratios, it is easy to recognize that the quick ratio is less than one,
which means the chance that the company can pay off its debt by using most liquid assets is quite
low. Besides, it shows that the majority of inventories are stored and not effectively managed,

that is why current ratio is at such high level, which also means low sales and low revenue
gained. Moreover, the company relies on the bank loan as the main monetary support.
B. SOLUTIONS:
First of all, there is one obvious answer to the financial difficulty is that Cyclemate Ltd can lease
or mortgage their freehold land costing $160,000 to gain more money and solve the situation
right away. Therefore, it can prove their strength to survive in the future so the company gain
more trust from the bank for future investment.
Secondly, the company is in severe lack of cash (only $675 left) so of course any borrowing loan
from the bank could easily turned down. The solution to this issue is that they should strictly
resolve and for the trade debtors to repay the loans as soon as possible. The amount of $200,571
would help the financial situation better in the coming time. Once their assets are raised through
and their liquidity are proved to be valuable enough to afford the loan, it will be beneficial for
them to borrow money from the banks.
Additionally, cost in selling and distribution could be possible declined to save more money for
the company such as cutting cost for postage and courier charges by substituting by cheaper
service, as well as the travelling and hospitality. Those indirect costs contribute such high cost to
the manufacturing of the cycles, restricting them would help boost the sales with cheaper price.
Last but not least, the aging workforce is also another worry. If we can lay off some workers and
hire cheaper labor for cleaning and other odd activities, it could save money for paying wages. In
the meantime, experienced workers still remain the same with appropriate amount of salary; no
necessary change should be applied.
4. Manufacturing procedure and improvements
A. IMPROPER WORKFORCE IN MANUFACTURING:
Unreasonable workforce division is one of the most serious problems of Cyclermate Ltd.
Besides, lack of experienced employees and the aging workforce are worrying the production
process and raising a big question for a more effective training system.
First of all, the inappropriate division of duties obviously had made such a burden on many
workers. In particular, Dai Armstrong has to deal with many tasks such as making all the frames,
factory manager and business director at the same time. He himself also finds it hard to keep up

the level of production (approximately 8 frames/day) because it requires the harsh physical
demands.
Moreover, assembly is a complex process, which takes 2 or 3 hours for one person. Janice Jones
and Ffred Gregory often have to work overtime to catch up with the progress. As a result, their
health and time issue could be heavily damaged.
Also, packaging is not responsibility of certain worker, anyone who has spare time can do that. If
nobody has to complete their own part, without any time to do this, the packaging wont be
accomplished on time.
A good answer for this problem is that the company should require clear division to who is
able to undertake and separate arrangement of duties. Specifically, assigning other qualified
person on frame-making position so that Mr. Dai could concentrate and dedicate himself to
external relations business only. Assuming that the financial situation of the company gets better,
the company should consider hiring more experienced labor for assemble line and frame-making
because Mr Dai can no longer put up with the physical requirement of the task. With those
simple tasks like packaging, it is acceptable for free hand employees to help out, but only when
they finished all their tasks.
Besides, the fact that workforce is getting older is also causing big troubles for the company
because the manufacturing requires adaptation to changes and new demands every single day.
Meanwhile, some workers are close to retired age. For example, Idris Pugh undertakes wheel
manufacture; however, he is now in his seventies. Therefore, low efficiency always appears in
the factory even Idris is a perfectionist, whose wheels are always absolutely true, and never
causing any complaints
In this case, the company can consider employ cheaper labor that are suggested by Maldwyn
Jones: Chinese or Taiwanese labor to make the machine for them- much better quality but half
the price and move Idris Pugh to higher position as a supervisor for the whole wheel-making
process.
Last but not least, the training system creates such obstacles for the assembly process. Typically,
Fred, who is 18 years old, is a new and un-experienced person, the training for him is necessary,
however, not easy at all. It takes so much time to instruct Fred in traditional way which is
apparently the cause of slow production recently.
In order to solve it, Fred needs to be on-the-job trained and separately from working hours.
Perhaps letting Idris Pugh to be a trainer for Fred is the best measure to take because with such

experience, he can taught Fred who is 18 years old and save time for others people focus on
completing their own tasks. By doing this, assembly area could be worked with maximum speed
and capacity without interruption. Production activity can maintain its working pace.
B. IN MACHINERY
a. Painting system
In order to get a better and more durable finish, the traditional spray technology has been
changed to a modern two-pack automotive paint as Dais expectation. Besides its advantages,
it also owns the negative effects such as a number of frames have had to be scrapped due to its
quality problems and some concerns about the danger of highly toxic paint materials in this
technology.
The problem can be solved by considerable capital investment to upgrade it into highly
electrostatic powder technique, however, the financial situation of the company are in trouble.
Then again, this method could only be applied when the company gets better financially to afford
new machinery for high-quality products. However, the long-term benefits it will bring about are
undeniable.
b. Stock control system
Disturbingly, materials are always in the shortage which results in the disruption of the
production process recently. Although the demand is higher and higher, company cannot meet
their requirement because of lacking necessary components.
The responsibility of who are in charge of noticing stock control system, Janice and Ffred, is
to estimate the upcoming amount of materials needed. Any other members of certain processes
had better keep informing about the level of components so that Janice and Ffred could report to
the office for the supply as soon as possible. Thanks to this collaboration, it is believed that the
situation of lacking inventories would be restricted in the coming time.
C. IN WHEEL MANUFACTURING
Despite the firm has commissioned a cycle shop to build the wheel for it quickly with reasonable
quality, in some occasions, company could not decrease direct cost which is higher than the
materials and components used by Idris, especially during the difficult times.

 It is suggestible that the firm must stop importing wheel from outside. As a result, direct
material cost will be reduced significantly, so that the products selling price will be also declined
and firms sales would be improved dramatically.
D. IN WORKING CONDITIONS (WAREHOUSE LAYOUT)
Below is the original Warehouse Layout:
[pic]
As we can see, the way Cyclermate arranges it has made their productivity low due to some
unreasonable issues. For example, they locate the place of main inventory far from the spot
making wheels so the workers have to travel a lot. Besides, it is out of the observation of office
staff who have responsibility for managing the inventory. On the other hand, there is a lot of free
space near the goods bay, meanwhile, the reception area is full of working spot so it make
customers who go there feel unpleasant.
Therefore, we suggest another way to rearrange this factory more convenient.
First of all, we decide to put the Inventory and High Value Cage near the office so people at there
can supervise easily and have enough information about what the stock control level. The three
primary manufacturing parts, Wheels and Sundry; Saws and Presses; Welding, will be placed
near the Inventory, next to the Spray booth and curing oven. The rest will remain the same.
The flows of the new process are described as: Firstly the workers enter the factory and could
easily take the inventories needed then move to their working areas. Finished products from
these steps will be moved to Assembly to be assembled before going to Testing and Packaging
room. From this room, they will be stored and wait until being sold.
5. Human Resource Management and Improvements
A. HR PLANNING:
Any service business desiring to maintain long-term benefits should apply a clear procedure into
their system so that the staffs could follow that exact sequence of instructions and lessened any
potential harms. Also, the well-organized flow chart enables employees to deal with the
contingency logically within the regulated code of conduct.

The unreasonable role division of all employees in charge of manufacturing as well as managing
at Cyclermate Ltd has caused many troubles. Some workers have to be responsible for so many
physical demanded tasks, others are more pleasant with their positions. Some lacks seriously
experience and expertise needed and some are getting older who will no longer adapt to the new
changes.
Therefore, the company requires the reallocation of jobs in this company. At the current time, a
clearer system of human resource planning will provide the connection between objectives and
organization structure and clarification of personnel policies.
[pic]
[pic]
B. CORPORATE CULTURE
Corporate culture is the chain of core values, visions, systems and beliefs, habits that a company
develops and lives by. Corporate culture must be agreed upon all members in one organization so
that the employees could be fully acknowledged about the seriousness of the company operation.
Also, once the members are aware of the new direction of the company, there is a high chance
that they will be more united and adjust their attitudes more properly for the greater consensus
with a purpose of overcoming the difficulties.
Core business value: trust in others and a firm belief in overcoming difficulities ( set up new
mission: overcome difficulty, mimimize waste and consequence
New direction: traditional -> leading edge
Patterns of work: strict regulations about working attitudes, manners, unity, collaboration.
C. RECRUITMENT, SELECTION AND INDUCTION
Requirements: High expertise and specific experience in those fields: frame-making, wheel
manufacture, mudguards, chain guards/ technical foundation
D. INTERNAL TRAINING & DEVELOPMENT
Awareness enhancement is now the primary concern of this company. Nobody is conscious of
the current situation as well as other potential harms that may heavily damage the survival of the

company. Once the awareness of all the workers is raised and regained after such stagnation and
bad outcomes, there is a high chance that they will be more willing and cooperative joining the
upcoming training program.
Codes of conduct
Along with a clear diagram showing employees duties, a code of conduct also plays a very
essential role in affecting the business. Basically, a code of conduct will mention about a set of
rules stating the certain responsibility for a certain staff. More importantly, it outlines the proper
practices and minimum terms about attitudes, behaviors, collaboration, contribution, proper
chain of commands, etc that a worker must implement rightly.
Training system
Resources: The input and initial investment will mainly cover the faculty and staff (both new
staffs and on-the-position staffs), finance for researching and designing flow diagram, for the
instructors, equipments and technology during coaching, contributed effort and time.
Activities: This training program involves directly in the new changes with a purpose of
improving the staffs skills, expertise and methods to complete an error-free task, exposing them
to unfamiliar ideas and of course, giving them the chance to practice task under time/speed limit.
Retrain // On-going train:
If the system succeeds, it is superior to continue this training program frequently to contribute to
the non-stop workforce growth and development.
If the system fails, the manager or head of each manufacturing departments should realize and
consider some certain changes for better improvement until the system works and brings about
evident outcomes.
Evaluation (Supervision): After implementing the training system, there should be appropriate
assessment to see whether or not this training program suits and progresses to help improve the
situation. As a consequence, specific criteria should be set up to investigate the effectiveness. For
example, speed and time range needed to complete one task should be limited by a stop-watch to
check if that amount of time is effectively managed or not. Compliance is another important
criterion. Compliance mentions the task completion as well as the goal attainment. This criterion
will control the employees ability of following the instructions. Besides, the decisive factor that

examines the result of this training program is the products quality, the sales and the upcoming
profit gained.
E. WAGES AND REWARD ADMINISTRATION
The company had better set up a policy about rewards, incentive scheme or discipline or fine to
motivate employees or punish them if necessary during training process. For instance, bonuses
should be given to people who complete their assigned tasks perfectly way beyond requirements
and achieve most positive comments. Conversely, disciplinary actions for those who make
mistakes should be clearly stated, how severe they are will depend on the consequences the
errors create. By doing this, the employees could realize the seriousness of the training program
and will not dare to let any minor mistakes happen.
----------------------Reception area and offices
Testing final inspection and packaging
Finished Goods stores
Assembly
Wheels and Sundry Parts
Spray booth and curing oven
Saws and presses
Welding station
High Value Cage
Main Inventory
Goods bay
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#hBCJ$OJ[?]QJ[?]^J[?]aJ$mHnHu[pic]h [+CJPOJQJ^J[?]Reception area and offices

High Value Cage

Testing final inspection and packaging
Finished Goods stores
Goods bay
Assembly
Main Inventory
Saws and presses
Welding station
Wheels and Sundry
Spray booth and curing oven