CALIFORNIA STATE UNIVERSITY, SACRAMENTO

College of Business Administration

MGMT 170 – Fundamentals of Business Strategy

CASE STUDY QUESTIONS

(Case: Giro Sport Design (A & B))

1. Please state in (bullet-point format) what the numbers tell us in this case.

VISION
	Implication
To be a great company and make a mark on the bicycle industry.
“Do what NIKE and Adidas do?”

INTERNAL
Numbers (From The 1987 A Case)	Implication
Sales $176,273 YTD Working Capital $86,598
Return on Assets 1.17 Return on Sales .19 Gross Margin 61%
Current Ratio 11.55 Acid-Test Ratio 11.24
Debt to Equity .53

INTERNAL
Numbers	Implication
Giro products cost around 27% more than the top competitors’ ($70 vs. $55).
“Knock-offs” starting to enter the market at under $50.
Largest competitor 1987: Bell with 40% of the helmet market.
Largest competitor 1990: Specialized with over $100 million in sales.

2. What do you think of Pat Ament’s employment proposal to Jim Gentes and Gentes’ reaction in 1987? List simple elements that commonly comprise a small business employment agreement.

3. Evaluate Jim Gentes as an entrepreneur. What lessons can we learn from him?

4. a. Should Giro continue to be a “product-driven” company rather than a “market-

focused” company or emphasize both? Elaborate on your rationale.

b. Should the company develop future products based on Jim Gentes’ intuition or should

they use some other method?

5. What types of questions should Giro need to answer strategically in order to make tactical new product decisions?

6. Propose a strategy for Giro to pursue using the V-I-E framework with strategy and action components.

336 MGMT 170 GIRO SPORT DESIGN CASE