Cannondale Keeps Satisfied Customers Rolling
You’ll never forget your first real bicycle. Maybe it had stickers on the fenders, streamers from the handlebars, and maybe even a bell or horn. The important point was that it didn’t have training wheels—and it wasn’t a tricycle. It was a bona fide bike. The people at Cannondale share your passion for that first bike, and they want you to enjoy cycling as an adult, preferably on one of their models.
The Connecticut-based company stresses quality and customer satisfaction from the ground up, from tires to seats to handlebars. Company management also understands that cyclists come in a variety of types, from recreational to racer. And satisfying the needs of a variety of cyclists means that Cannondale offers a broad product line made up of diverse models—including high- performance road bikes, sport road bikes, cross-country racing models, pack touring cycles, triathlon bikes, mountain bikes, “ comfort” bikes, tandems, and even a recumbent cycle with a soft seat and backrest. For the truly persnickety customer, the bike maker also offers customized bike frames. And for cyclists who want to look and feel cool while they are riding, Cannondale can outfit riders with cycling apparel in high-tech fabrics. If that’s not enough for the cycling enthusiast, there are hats, socks, shoes, seat and handlebar bags, and more.
It takes teamwork to produce Cannondale products, which are considered by both the cycling industry and their loyal customers to be of superior quality. If you could sit in on a research and development meeting for a particular model, you’d get a good sense of how dedicated Cannondale designers, engineers, and product managers are to their customers. Steve Metz, director of product management, oversees everything from decisions about how to meet customers’ needs to selecting components for a bike and making sure the final product is manufactured to quality specifications and delivered promptly to customers. John Horton leads a team of project engineers who develop new models and improve currently popular models like the Jekyll. Designers and engineers meet frequently—and often informally—to discuss ways to add value by installing stronger or lighter components and increasing speed without driving up the price. They test different innovations, communicate with the manufacturing plant, and test them again.
Once they have a prototype, they ride the bike. And to continually focus on customers, Cannondale designers use inputs from current and potential customers to guide every phase of the development process. After all, the world’s highest quality bike is still a failure if it remains unsold in retail stores.
Technology also plays an important role in creating the lightweight, high-performance bikes for which Cannondale is so well-known. The company isn’t hesitant to develop working relationships with outside firms capable of supplying technology not available in house. Years ago, Cannondale reached an agreement with Genosys Technology Management under which Genosys would supply expertise in monitoring quality control and providing improved communication throughout the company. Cannondale has also pioneered such innovations as the electronic shock lockout system for mountain bikes. A traditional mountain bike is equipped with shock absorbers that reduce the amount of shock to a rider’s leg, but the same mechanism also makes it harder to pedal uphill or make the most of sprints during a race. If a rider wants to “lock out” the shock absorber, he or she needs to remove one hand from the handlebar, a cumbersome maneuver for a cyclist on the move. The electronic Cannondale system works with the push of a button. One touch activates the lockout, and a second touch deactivates it. Riders love it. But the new system didn’t come easily; Cannondale engineers tested and discarded several designs and prototypes before they had one that worked. The new system made its worldwide debut at the Sydney Olympics, where Swiss rider Christoph Sauser won a bronze medal.
The pursuit of quality requires that a firm must make ethical business decisions, even if that means admitting mistakes. Despite every effort to produce the best components, one year Cannondale discovered that the stems— part of the steering systems—on some of its $3,400 to $5,000 bicycles were breaking. The company responded quickly. After four reported instances and one minor injury, Cannondale issued a recall for the defective parts. Although a recall may have caused initial unwanted publicity, in the long run dealers and cyclists knew they could trust Cannondale to make the right decision. That’s the mark of a company whose passion is perfection on wheels.
Like every business, Cannondale execs have made a few mistakes along the way. Their expansion into motorsports proved a failure. Worse yet, it ate up hordes of company funds and, coupled with the economic slowdown, forced founder Joe Montgomery to seek bankruptcy protection. In 2003, the firm was purchased by Pegasus Partners, which provided new funds for the cash-starved company and promised to make Cannondale even better. Pegasus representative David Uri voiced strong support for the company: “The fact that the bike division has remained profitable despite the . . . costs of its now closed motorsports business clearly demonstrates the strength of the brand. Our job now is to let Cannondale concentrate on what Cannondale does best— designing, manufacturing, and marketing lightweight, high- performance bicycles for the specialty retail market.
1. Identify some of the types of capital that Cannondale uses in producing its bicycles.
2. In what ways do human resources at Cannondale contribute to value and customer satisfaction?
3. Describe how Cannondale can use relationship management to thrive and grow as a company.
4. Cannondale relies on teamwork to produce its bicycles. In what ways does this reflect the changing nature of today’s workplace?
