Schwinn
began moving towards the idea of “Total Concept Stores” which eventually became
“Authorized Schwinn Dealerships.” By happenstance, this had been a position
advocated–but not fully adopted–by Frank W. Schwinn in the 1930s. It was not until
the 1950s that his desire to break from large retailers would come to fruition. schwinn bicycles Schwinn also was in the process of refining its bicycle marketing
strategies. The company hired an innovative marketing specialist named Ray
Burch to liven up and better target their advertising. To better understand consumer
demand, Schwinn also made it a point to listen to suggestions from its high-volume
dealers.
Only time will tell whether or not the iconic Swhinn brand is now in good hands. Eward Schwinn Jr. wanted to carry on the Schwinn family
business tradition but he also was handicapped by the Schwinn family trust. Not
uncommon in an era of paternalism, in the 1920s the founder Ignaz Schwinn had
set up a family trust for the company that contained both shares and of the
company and its name.
The “Made in Chicago” badge on Schwinn bicycles was always
a matter of pride for the company. In its heyday, the factory produced almost
everything in a Schwinn Bicycle but the steel tubing. Up through the 1950s,
continual investments were made to upgrade the capability of Schwinn to build
bicycles entirely from scratch in Chicago. In the late 1970s, Trek with its narrow range of specialized
bicycles was no threat to mammoth Schwinn. Trek kept waiting for Schwinn to put
the hammer down on them by building a line of competitive lightweight bicycles,
but it never happened (Crown and Coleman 1996). This gave Trek some breathing room
to diversify from its original touring bicycles to other models that would be
in direct competition with Schwinn.
Edward Schwinn, Jr. has been roundly criticized for the
demise of Schwinn Bicycles as a family company. Although not all of his
decisions were stellar, the blame was somewhat unfair. In 1979, Frank V. Schwinn relinquished his authority to
manage the company to Ed Scwhinn, Jr, a 30-year-old great-grandson of founder Ignaz
Schwinn. After just less than a decade running the company, Frank V. Schwinn
had enough and wanted to retire.
Giant further endeared itself to Schwinn during the strike
by delivering on a promise to pick up the slack in manufacturing capacity. Giant agreed to provide Schwinn with an additional 80 thousand bicycles. By
1984, Giant ratcheted up production to 500 thousand bicycles for Schwinn which
accounted for about two-thirds of Schwinn sales (Crown and Coleman 1996). Another change in the bicycle industry confronting Schwinn
was a mountain bike craze emerging in Marin County, California.
F. Goodrich sold many
different products including schwinn bicycles. In one notable conversation with
his marketing team, Frank W. Schwinn said, “I guess you’re going to lose me
that (B. F. Goodrich) account.” At the time B. F. Goodrich had 1700 different locations selling Schwinn bicycles. He also was friends with Alfred Sloan of
General Motors who had developed a single-brand dealership model for selling
cars. He accepted the advice of his younger
managers and the “Authorized Schwinn Dealer” was born.
Schwinn
eventually decided to produce its high-quality bicycles in the Greenville factory
and low-quality bikes in Asia. This was a reasonable strategy and similar to
one being followed Trek. The Schwinn
family bicycle company was very strong for two generations. The third generation Schwinn manager Frank W.
Schwinn did not have the drive of his father.
In the 1940s
he recruited Hollywood and television stars to promote Schwinn as the best
bicycles in the world. The idea of moving towards dedicated bicycle dealers was
reinforced by a visit of Ray Burch and his marketing team to a bike shop in California owned by George Garner that
was selling Schwinn’s like hotcakes. A World War II veteran living in California,
he had purchased a shop that sold a wide variety of products including bicycles. He got tired of selling model airplanes and other
nickel and dime items. The visiting Schwinn
marketing team liked what they saw and took the idea of dedicated Schwinn
dealers back to Chicago to sell to the boss. With a line of quality bicycles and a marketing strategy
fine-tuned to consumer demand in place, during the late 1940s Schwinn was off
and running.