2. CANNONDALE CORPORATION PRESENTED BY: THE GOLDEN ACHIEVERS

3. BUSINESS POLICY AND STRATEGY FALL 2001

4. AGENDA Executive Summary Introduction of Recommendations Questions and Answers

5. EXECUTIVE SUMMARY Aging plant and equipment High brand image and reputation Trade-in bikes for newer Cannondale models Introduce 2 new bicycles Patents Innovative Website

6. EXECUTIVE SUMMARY CONTINUED Develop 5 additional motorcycles - Steve Baby Strollers - Dan

7. RECOMMENDATION #1 By: Pam Sacco Weakness: Aging plant equipment. Opportunity: Expand into foreign markets. We will build a new construction site in Europe IMPLEMENTATIONS: Evaluate the favorable and unfavorable aspects of building the plant in each of the European countries

8. RECOMMENDATION #1 CONTINUED Obtain the necessary financing at the lowest rate to build the plant. Build the plant in the location that offers the greatest potential for profitability based on labor costs, favorable government policies and proximity to suppliers and retailers.

9. RECOMMENDATION #1 CONTINUED EVALUATION: We will monitor our industry growth in the European market biannually to see if we are achieving the desired results. We will segregate the financial data from the operations of the plant and evaluate quarterly to determine the plant’s profitability.

10. RECOMMENDATION $2 By: Pam Sacco Strength: High brand image and reputation Threat: High level of competition in the industry Craft a new marketing strategy to capitalize on our high image IMPLEMENTATION: We will increase our marketing budget by 3% to finance the strategy

11. RECOMMENDATION #2 CONTINUED Emphasize the quality of our product in all media advertisements. Focus our marketing strategy to capitalize on the knowledge and quality of the service provided by our specialty retailers. EVALUATION: Use customer surveys to measure the results of our efforts.

12. RECOMMENDATION #2 CONTINUED Monitor trade journals and publications to evaluate our image with industry specialists.

13. RECOMMENDATION #3 BY STEVE GEBHARDT Strength: Strong distribution network of specialty retailers. Threat: Low switching costs. Institute a program where customers can trade-in their older bikes for newer Cannondale models.

14. RECOMMENDATION #3 CONTINUED IMPLEMENTATIONS: Allow the retailer to keep the profits from the sale of the traded-in bike. Offer a 5% discount to the retailer on every bike sold in this manner. EVALUATION: Evaluate our market growth and profit margins quarterly to insure the trade-in policy is having the desired effect.

15. RECOMMENDATION #3 CONTINUED Monitor the reactions of competitors anticipating possible counter offensive moves.

16. RECOMMENDATION #4 BY DAN DiLORENZO Strength: Strong flexible manufacturing system. Threat: High level of product differentiation. We will introduce two new bicycles into each of our product categories, Mountain, Road, Multisport recreational and Specialty.

17. RECOMMENDATION #4 CONTINUED IMPLEMENTATIONS: Utilize consumer surveys to determine the products and features desired in each of the product categories and rate these in order of practicality and ability to develop. R&D department will develop those determined by the above process.

18. RECOMMENDATION #4 CONTINUED Test the product for quality by using our Q- Lab and in racing events when possible. Place those products that pass our quality testing into the market. EVALUATION: Our sales force will monitor the sales of these products quarterly and executives will make decisions regarding their continued production of these lines based on these reports.

19. RECOMMENDATION #4 CONTINUED Use customer surveys to determine if the products are well received. Monitor competitor reactions to these new product lines.

20. RECOMMENDATION #5 BY FRAN PAOLINI Strength: High use of patents and proprietary owned technology. Threat: High degree of diffusion of technical know-how in the industry. Increase our ability to prevent our rivals from copying our designs before we are able to capitalize on them.

21. RECOMMENDATION #5 CONTINUED IMPLEMENTATIONS: Continue to patent our technologically superior processes and innovations. Pursue legal action against companies that infringe upon our patents. As a condition of employment our employees will contractually agree not to divulge proprietary owned technology for one year after resignation or termination.

22. RECOMMENDATION #5 CONTINUED EVALUATIONS: Carefully evaluate our competitors new products to determine if our patented products or processes are being infringe on. Use employee satisfaction surveys to determine if our contractual agreements with our employees are creating a negative reaction.

23. RECOMMENDATION #6 BY FRAN PAOLINI Strength: Innovative Website. Opportunity: Number of retailers is high minimizing leverage on producers. Sell bicycle accessories except for components via the internet. IMPLEMENTATIONS: Obtain the services of an e-commerce company to market these products via the internet.

24. RECOMMENDATION #6 CONTINUED Integrate our manufacturing function, suppliers and distributors into the Web based system to insure the fastest order to delivery times. EVALUATION: We will segregate the financial data from the sales of these accessories and evaluate them quarterly to determine profitability.

25. RECOMMENDATION #6 CONTINUED Sales force will file quarterly reports on the reactions of our Specialty retailers to this strategy. We will monitor trade journals and publications to watch for our competitor’s reactions to the strategy.

26. RECOMMENDATION #7 BY STEVE GEBHARDT Weakness: Weak financial position. Threat: Mature growth rate in bicycle market. Develop five additional motorcycles to be introduced to the public. IMPLEMENTATIONS: Evaluate the product feature wants of the high-end motorcycle users.

27. RECOMMENDATION #7 CONTINUED Capitalize on the similarities of the value chains of bicycles and motorcycles in producing, marketing and delivering the products. Test the products for quality by using our Q-Lab and in racing events. Place these products that pass our quality testing into the market.

28. RECOMMENDATION #7 CONTINUED EVALUATION: We will segregate the financial data from the sales of these accessories and evaluate quarterly to determine profitability. We will monitor competitors in the motorcycle industry for possible aggressive strategic moves.

29. RECOMMENDATION #8 By: Dan DiLorenzo Strength: Loyal customer base Threat: Products are a discretionary purchase. Diversify into the baby stroller market IMPLEMENTATION: Evaluate the opportunities and threats in the stroller industry as well as our strengths and weakness in this market. If we determine there is a good fit, we will proceed.

30. RECOMMENDATION #8 CONTINUED Expand on our Pennsylvania plant for the purpose of producing the strollers. Institute the best practices from out current operations into the development and production of the strollers. Target our current loyal customer base that is young and likely to have or will have children in the near future.

31. RECOMMENDATION #8 CONTINUED Market the products emphasizing the quality of a Cannondale product. EVALUATION: We will segregate the financial data from the sales of these bikes and evaluate quarterly to determine profitability. We will analyze demographic data to determine if our current customers are purchasing the strollers.

32. RECAP OF RECOMMENDATIONS Build new plant in Europe New marketing strategy on our high image Trade in older bikes for Cannondale models Introduction of 2 new bicycles Patents Expansion of Website Develop 5 additional Motorcycles Baby strollers