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    The Cypress-Itex case

    Bicycles are mass produced. There is, however, a well established niche market for specialized bicycles, including those for racing and mountain biking. These bicycles are often very expensive because they are built from the highest quality and very light materials. For example, the gears may be made out of titanium composite and the frame constructed from super light aluminum, the same as used in airplanes.

    There is a healthy market for specialized bicycle manufacturers. Their main concern is to establish reliable suppliers capable of consistently providing high quality parts. The suppliers tend to be small metal processing firms that can produce excellent quality components and parts. There are many such producers but they may differ in reliability and quality.

    Many of the small parts producers are very agile and can quickly change their product line from components for sport industry, to medical parts, to high-precision instruments. Production change is, however, never cost free and firms always prefer long-term contracts.