Case | HBS Case Collection | February 2011

ABICI

by Mukti Khaire, Elena Corsi and Elisa Farri

Abstract

The co-founder of an Italian, design based bicycle manufacturer evaluates if reducing costs by outsourcing would impact its brand. The company was founded in 2005 in Italy by three friends and in its first five years, it had enjoyed steady growth and built a strong reputation for producing high-quality city bicycles, appreciated for their retro-look and style. Its country of origin had probably helped them exporting their products as their bicycles were 100% made in Italy and the Made in Italy label had a reputation of high quality, craftsmanship and creativity. Yet their profit margins were relatively low as their manufacturing costs were very high. Should they outsource their production? If so, to China or to Eastern Europe? Was there some other way to improve the profitability of the company?

Keywords: Trade; Entrepreneurship; Profit; Job Cuts and Outsourcing; Brands and Branding; Product Design; Product Development; Production; Bicycle Industry; Manufacturing Industry; Italy;

Citation:

Khaire, Mukti, Elena Corsi, and Elisa Farri. "ABICI." Harvard Business School Case 811-085, February 2011.