1.Strategic Directions
Although Cyclermate management have persuaded the bank to continue funding for the short-term, the directors of the company realise that they have to think about the longer term.

Further discussion with Dai’s cousin have established that he continues to be interested in helping, both in financial and management terms. Furthermore, he has apparently persuaded the famous entrepreneur and venture capitalist, Sir Claude Solstice to consider the possibility of involvement in the firm. Sir Claude, a passionate advocate of “green” technology, is also a keen cyclist. He would bring with him access to a highly specialised design and development team which has recently successfully brought to market a high-powered electric sports car. After some negotiation, Sir Claude has agreed to set up a “skunk works” which he will personally fund for a period of 4 weeks. This will bring together his highly skilled team of marketers, strategic thinkers and designers whose brief is:

• to evaluate the current market for bicycles, and identify the size and growth rates of the key product segments
• to determine the potential for a new range of electrically assisted bicycles based on new battery technology
• to understand the routes to market and margin structures of the channels
• to identify the required pricing structure for the new range of bikes; cost price, channel margins and selling price
• to estimate the sales volume per year for the first three years following launch and therefore decide which national markets need to be penetrated in order for the project to be viable. It was agreed that a clearly defined, viable UK opportunity needed to be identified for the first year. The reasoning for this was that unless the business could be profitable on home sales, the risk in taking the project international would be too great.

It was agreed that the