Seg and Cycle the City is a Koblenz-based company set to launch in April 2010, specializing in renting recreational vehicles like segways and bikes, while offering guided city tours and audio guides, targeting both tourists and locals. The company aims to capitalize on the growing popularity of segways as an alternative to walking tours and maintain a commitment to sustainability, catering to a wide range of customers including college students. With positive trends in the local tourism and bike rental markets, the company plans to navigate seasonal fluctuations and competition through innovation and customer engagement.

1. Sample Student Industry Analysis
Executive Summary
Company Description
Seg and Cycle the City is a Koblenz, Germany based company
specializing in offering rentals for recreational vehicles
(Segways, bikes, tandems and inline skates), guiding and
informational services to mainly tourists, locals and their
visitors, students or for event entertainment purposes. The
company will begin operations in April, 2010, as a Limited
Liability Company (Unternehmensgesellschaft). The company
will take advantage of the increasing popularity of Segway
scooters: two-wheeled, self-balancing electric vehicles invented
by Dean Kamen in 2001, as a new, more exiting and relaxing
alternative to walking tours for tourists to enjoy the sights and
atmosphere of the city. Also, the company will provide high
quality MP3 Audio-City Guides to capture the large number of
visitors who are more independent-minded, not willing to
participate in guiding services offered by the tourism board of
Koblenz and thereby gain significant market share.
Mission Statement
“Seg and Cycle the City is a speciality tour operator committed
to providing a unique, entertaining, memorable and educational
experience of the city that meets the needs of both kinds of
tourists: those who seek a guided experience and those who are
more independent minded.
We will take pride in doing our best to present our city tour in a
memorable way and leave our customers with the image that
Koblenz is a place to go back to. We will achieve this by

2. building strong personal relationships with our customers
during our guided tours and by suggesting journeys for the
individual exploration.
As an advocate for sustainability, we want to promote the use of
environmentally friendly transportation devices and, thereby,
improve the image of our beloved city. We will also fulfil this
mission of sustainability by providing an affordable opportunity
for college students to rent a bike.”
Industry Analysis & Trends
The services provided by Seg and Cycle the City as a player in
the service industry are affected by the developments in the
recreational and sports equipment rental trade and by
developments in the city and bike tourism industry in Germany,
Rhineland Palatinate and, specifically, Koblenz.
Size and Growth
The personal service industry in Germany generally shows a
stable performance with relatively stable revenue regardless of
the difficult economic situation. A high employment rate,
increased wages, and a decreasing inflation rate have increased
disposable income, which especially benefits the leisure
industry (German Chamber of Commerce e.V).The following
graph shows that the service industry (blue line), as the leading
sector concerning economic added value in the Koblenz
(including surrounding communities) underwent major growth
compared to other main sectors from 1992 to 2005. Since 2004,
growth rate appears to be stable and rather low, but remains in a
leading position.
Travel Germany, Rhineland-Palatinate and Koblenz

3. In 2006 the German travel market has proven again to be an
engine of growth for the German economy, generating an added
value of 94 billion Euros.
City tourism is an especially booming market in Germany, with
a total of 2.2 million days of stay per year (including 1.51
million daytrips). Germany’s 82 cities with more than 100,000
inhabitants (Koblenz with 106,000 inhabitants belongs to them)
achieved 4.4 % more overnight stays in 2008 (Deutschen Reise
Verband). In 2006 tourism accounted for 8% of the Gross
Domestic Product in Germany and ranks third in its economic
significance.
A comparison of the number of day trips throughout the federal
states shows that Rhineland- Palatinate is in fifth place with 175
million day trips. Concerning the intensity of Tourism
(overnight stays per 1000 inhabitants) among the federal states,
Rhineland-Palatinate ranks fifth (Graph #1 and #2 attached in
Appendix). Travel expenses have increased per person and day
by around 25% to 540 Euro per trip for domestic vacations.
Travelling to Rhineland- Palatinate enjoys increasing popularity
especially among foreign visitors from Belgium and the
Netherlands, followed by Great Britain and the USA (Deutscher
Tourismusverband e.V).
Seg and Cycle the City will benefit from the growing tourism
industry in Koblenz that is anticipated as a result of urban
reconstruction and the improvement of the city’s image during
and after the National Garden show in 2011. The tourism sector
in Koblenz already proves to be stable with an increasing
tendency (Koblenz city council - statitics department).
Bike tourism
20.9 million Germans used their bikes in 2007 as leisure

4. activity on holidays. 6.2 million people claimed to use their
bike “frequently“ to “very frequently“ (Deutscher
Tourismusverband e.V).In Rhineland-Palatinate, bike tourism
accounts for 0.341 billion or 10.2% (includes expenses for
lodging, food etc.) of the total economic added value of the
tourism industry and contributes 341 Mio. Euro to the federal
state‘s GDP. The federal state‘s government has endeavored to
develop the network of bike routes and guiding systems in the
state in order to encourage people to use bikes and more
environmental friendly means of transportation in the city
(Europaeisches Tourismus Institut an der Universitaet Trier
GmbH). Seg and Cycle the City will take advantage of this
development and contribute to the state’s efforts. The federal
department of transport also initiated the projects www.skater-
land.de (skater-country) and www.radwanderland.de (bicycle
country) that provide detailed information about routes events
and services for bikers and skaters in Rhineland-Palatinate.
Maturity and Trends
Recreational and leisure equipment rental
The lifecycle stage of recreational and sports equipment rental
is mature but is unlikely to decline as result of an increased
interest in physical activity and health. On the other hand, the
fear of a deepening recession has caused discretionary spending
to dry up in 2008 and 2009. Due to the increased acceptance of
product rental among consumers during the 2003 to 2008
period, the industry experienced a considerable expansion.
Furthermore, the industry is anticipated to experience growth in
the years ahead as a result of greater leisure time availability
and new trends in fitness activities. Moreover, the oncoming
retirement of the baby boomer generation, which will have more
available leisure time has demonstrated a desire to continue to
be active after leaving the workforce, representing an

5. opportunity for Seg and Cycle the city to cater to this group.
(Forecast for the Sports and Recreation Facilities in the US -
includes tourist guide services-) (IBIS World).
The aging population is an advantage for Segway tours because
the company provides the
older generation a more relaxing, strenuous alternative to
walking tours. Statistics about
bike tourists in Rhineland-Palatinate revealed an average age of
53.5 which is 6 years older
than the average age of the whole population (46.9) and the age
of the average tourist in
Rhineland-Palatinate(49.5) (Europaeisches Tourismus Institut
an der Universitaet Trier
GmbH). Competition in this industry is described as being stiff
and
increasing because they compete in several ways: price, product
range and location. Seg and
Cycle the City will outstrip their competition by offering
favorable financing arrangement for
students, an innovative product range, and a central location,
which is the perfect starting
point for touring the city or region .
Economies of scope are another key success factor in the
industry. Firms that offer a wide range of rental products
increase customer and revenue

6. numbers.Therefore, Seg and Cycle the City plans to invest
additional capital each year to
expand the product variety and add for example a small number
of skateboards, tricycles or
exotic tandems (for more than two people) and test its
profitability before acquiring a large
amount of these products.
Climate Change and increasing awareness of environmental
concerns are increasingly important for the image of a tourism
destination as well as for individual lifestyles. Koblenz can
benefit from the services provided by Seg and Cycle the City
because they promote sustainability by offering
environmentally friendly means of transportation, including the
Segway, a vehicle that gives off zero-emissions thanks to its
electric battery power source.
The growing awareness of the importance of healthy living will
also benefit the business of
Seg and Cycle the City. During vacations the opportunity to be
active is especially
restricted. For this purpose, Seg and Cycle the City will develop
an ideal and customized
service that offers visitors the possibility to be active also
during vacations.
An entertaining and fun outdoor experience while spending time
with the family
and friends is of the company’s main concerns.

7. As a recent transportation invention Segway is not in its mature
stage of the product lifecycle and should rather be considered
as in its introduction stage, which provides an excellent
entrepreneurial opportunity to take advantage of being the first
company in the Middle Rhine region to offer Segway tours and
achieve a large market share. Segways are well suited for rental
because its purchasing price is significantly high enough that
there is little incentive for clients to purchase one (IBIS World
2).
Vulnerability to Economic Factors
The services offered by the company can be categorized as
leisure activity and are universally associated with luxury
spending, which closely ties the industry’s revenues to the
development of discretionary income and consumer confidence.
Unemployment and economic recession negatively impacts the
level of disposable income within a household, which
determines the amount spent for leisure activities and travel.
However, there is a counter cyclical trend in the travel industry,
as reduced disposable income forces people to take short-
distance trips and boosts city tourism in the own country (IBIS
World 2).
Risk Analysis
In the long term, the industry faces the threat from retailers
offering finance packages or low rates to increase sales.
Financing packages are less likely to attract visitors in Koblenz
as the majority of visitors stay only for a weekend or are
passing through to explore the rest of the Rhine valley.
Although, the company benefits from a low number of
competititors that offer Segway, bike and tandem tours, they
face the challenge to make customers comfortable and aware of
their services, especially with the new transportation technology
of Segways. The knowledge about and popularity of Segways,

8. however, is spreading thanks to the recent movie” Paul Blart:
Mall Cop“(2009), starring Kevin James, who plays a mall cop
driving around the mall on his Segway through the mall.
Seasonal Factors
City tourism as well as recreational and outdoor activities are
highly seasonal. Seg and Cycle the City’s business will be
affected by preferred times for travel and outdoor activities in
the spring and summer, and during holidays, such as Christmas
and new years. Adverse weather conditions, such as excessive
rain, long winters and cold temperatures reduce the demand for
outdoor activities and guided city tours. Consequently, the
company’s positive cash flow will occur during the warm
season from April to October, when city travel and outdoor
activities increase and special events in Koblenz capture
tourists. In order to avoid cash shortages and operate effectively
in the slow seasons, Seg and Cycle the City will use the winter
seasons to promote its services of indoor corporate and private
events, as well as to plan and market for the summer season.
The following statistic shows the monthly fluctuation in the
number of overnight stays over one year in Koblenz that will
affect our business.
Number of city tours in its seasonal course and compared among
the years (Koblenz city council - statitics department)
Barriers to Entry
High start-up costs due to the high capital that is necessary to
acquire equipment (applies especially for Segways), restricts
the number of new entrants to this market. Also, in contrast to
most other federal states there is currently no standard to
authorize Segways for use on public roads in Rhineland-
Palatinate. The responsibility is delegated to the cities.
Following the example set by the owner of Segway Worms (also

9. located in Rhineland Palatinate) Seg and Cycle the City will
make the effort and invest the time to receive a special
authorization from the city, which will make it harder for
competitors to enter the market. Nevertheless, few
governmental regulations for leisure equipment rental, low
running costs, and expertise required attracts a high number of
competitors in the overall rental and bike industry (IBIS World
2).
Technological Factors
The bike industry constantly develops new products with added
features, which
makes it difficult for Seg and Cycle the City to choose the right
models the company will rent
out that best meet the needs of customers. The Internet is also
an important technology for the
owners because travellers are increasingly researching vacation
destinations and prefer to
reserve tours and other services online or via Email.
Regulatory Issues
Segways are accepted in Rhineland-Palatinate for the use on
private property. In Rhineland- Palatinate regulations require a
special permit issued by the administrative district for
operations of Segways on public roads for which Seg and Cycle
the City will be the first in Koblenz to file (Registration)
(Works).
Supply and Distribution
Seg and Cycle the City will purchase and lease Segway scooters

10. from the authorized Segway
dealer in Koblenz. Other equipment will be mainly bought in
used condition from private owners or suppliers of Gottlieb-
bikes and then refurbished.
Bibliography
· Deutschen Reise Verband. “Fakten und Zahlen zum deutschen
Reisemarkt 2008.” 2009. Deutschen Reise Verband website. 19
April 2009 <www.wissen.dsft-
berlin.de/Fakten_und_Zahlen_zum_deutschen_Reisemarkt_2008
/Info-alle-1195-4-1.0.html - 16k>.
Numbers and facts of German tourism industry in 2008 by the
German travel association.
· Deutscher Tourismusverband e.V. “Tourismus in Deutschland
2007.” May 2008. Germany the Travel Destination. 17 April
2009 <http://www.germany-tourism.de/>.
This source by the German National Tourist Board gave
information about the German tourism industry in 2007.
· Email quote byDierks, Mr. - Segway-Koblenz. Segway leasing
Anne Schellenbach. 27 April 2009.
· Europaeisches Tourismus Institut an der Universitaet Trier
GmbH. Regionalwirtschaftliche Effekte des Radtourismus in
Rheinland Pfalz. Trier, June 2007.
This study by the European Tourism Institute gave information
about bike tourism in Rhineland-Palatinate.
· Europaische Reiseversicherung AG und DTZ.
Qualitaetsmonitor Deutschland-Tourismus Ergebnisse
2007/2008. 2008. 24 April 2009
<http://qualitaetsmonitor.dwif.de//index.php?option=com_conte
nt&task=view&id=6&Itemid=5>.
This survey among visitors in Germany was conducted by the
European travle Insurance Group and the German National
Tourist Board.

11. · Federal Statistical Office. “Statistical Yearbook 2008 - For the
Federal Republic of Germany.” September 2008. Federal
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g,property=file.pdf>.
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koblenz.de/servicemarken/Branchen/anhaengsel/tourismus_gast
gewerbe/regionen/wertschoepfungsstudien/ENDBERICHT_MIT
TELRHEIN_2007__korrigierte_Endfassung.pdf>
This source estimates the added value of the tourism industry in
the Middle Rhine region.
· German Chamber of Commerce e.V. “German Chamber of
Commerce e.V.” March 2009. IHK Koblenz website. 17 April
2009 <http://www.ihk-
koblenz.de/produktmarken/standortpolitik/anhaengsel/zahlen_un
d_fakten/konjunkturberichte/dihk_deutschland/sonderauswertun
gen/Dienstleistungsreport_Fruehjahr_2009.pdf>.
· Telephone interview with Greulich, Dr. Bernd. Corporation
taxes and UG Anne Schellenbach. 28 May 2009.
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<http://www.lohnspiegel.de/main/LohnundGehaltsCheck>.
This source states average salaries for around 250 professions.
· IBIS World 2. “53229 - Health Furniture, Party Supplies &
Other Rental in the US - Industry Report.” 28 January 2009.

12. IBIS World Website. 19 April 2009
<http://www.ibisworld.com/industry/default.aspx?indid=1371>.
· IBIS World. “71399 - Miscellaneous Sports & Recreation
Facilities in the US - Industry Report.” 2 April 2009. IBIS
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<http://www.ibisworld.com/industry/default.aspx?indid=1657>.
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d_fakten/standortanalysen/umfrage/Umfrage_Standortzufrieden
heit_IHK_Koblenz.pdf>.
Survey about satisfaction with location by the chamber of
commerce in Koblenz.
(Wirtschaftsfoerderungsgesellschaft am Mittelrhein mbH)