Shimano Inc.

Type: Public Company
Address: 3-77 Oimatsu-cho, Sakai, Osaka 590-8577, Japan
Telephone: (81) 72-223-3210
Toll Free: 800-833-5540
Fax: (81) 72-223-3258
Web: http://corporate.shimano.com/
Employees: 5,500
Sales: ¥143.65 billion (2003)
Stock Exchanges: Tokyo
Ticker Symbol: 7309
Incorporated: 1940 as Shimano Iron Works Co., Ltd.
NAIC: 336991 Motorcycle, Bicycle, and Parts Manufacturing; 33992 Sporting and Athletic Goods Manufacturing

Shimano Inc. is a leading producer of bicycle parts and fishing equipment. It is the world's largest manufacturer of such bicycle components as gear wheels, derailleurs, and brakes, with a 70 percent market share. In the late 1990s, Shimano began selling equipment for golf as well as snowboarding and other sports. Headquartered near Osaka, Japan, Shimano has 24 sites in 17 countries around the world. The company is known for its efficiency as well as innovation.

Shimano dates back to 1921, when Shozaburo Shimano founded Shimano Iron Works in Sakai City, near Osaka. The town was a legendary blacksmithing center known for its swords and gun barrels. Rather than follow his father into farming, Shozaburo had apprenticed at an iron works after high school. Later, he started his own company, and the first product it made was a single-speed bicycle freewheel. In ten years, Shimano was exporting freewheels to China.

The business was incorporated as a limited corporation in January 1940 under the name Shimano Iron Works Co., Ltd. In 1951, it was renamed Shimano Industrial Co., Ltd.

Shimano began making its famous derailleurs in 1956. Also called external speed changers, these were the mechanisms that moved the bicycle chain from gear to gear on ten-speed bikes and the like. The next year, the company began producing an internal, three-speed gearing mechanism that was enclosed in the hub of the rear wheel. This internal speed changer was introduced to the U.S. market a few years later and soon became the standard for three-speed bikes. In 1960, Shimano installed a cold forge that enabled stronger products to be made in a more efficient fashion.

Shozaburo Shimano eventually turned over management of the business to his three sons. Though the company made brakes and other components, Shimano refused to produce complete bicycles. "Our founder said, 'never ever compete with a customer,'" remarked one of Shimano's sons to the Straits Times. A U.S. subsidiary, Shimano American Corporation, was set up in January 1965. Shimano launched into the bike-crazy European market in the same year.

In 1970, Shimano built what was then the largest bicycle plant, located in Yamaguchi Prefecture, Japan. Later in the decade, according to Design Week, Shimano began hiring engineers to create a unified look among component systems as well as elevating their performance. A European unit, Shimano (Europa) GmbH, was established in Düsseldorf in 1972 with just two employees. The company's shares began trading on the Osaka Securities Exchange the same year and were also listed on the Tokyo Stock Exchange in 1973.

Shimano's first manufacturing plant abroad was set up in 1973 in Singapore. Opening a sales office in California in 1974, the company was well placed to ride the booming bike market in the United States during the 1970s.

Shimano's path to success was not without its bumps. As Yoshizo Shimano later told the Asian Wall Street Journal, the company made a huge investment designing, developing, and testing a series of aerodynamic bicycle components in the late 1970s. They were well ahead of their time and took several years to catch on.

Shimano had also begun to diversify into tackle for fishing, another sport whose tools required precision mechanisms. However, it did not become a major force in this industry until the late 1970s. Shimano's Bantam reels were introduced in 1978, followed by X-line rods in 1981.

Shimano continued to refine its biking products, creating new market leaders. The AX line of components for bicycle racing came out in 1980, followed two years later by a series for mountain bikes dubbed Deore XT. The Shimano Index System allowed cyclists to dial in to specific gears by numbers. Annual sales exceeded ¥50 billion in the mid-1980s. At this time, Shimano employed 1,500 people around the world.

Shimano beat its European competitors to the mountain biking craze, observed the Far East Economic Review. The company developed a thumb-shifting mechanism specifically for mountain bikes and produced tougher versions of its brakes and steering controls to stand up to knobby tire abuse. By the late 1980s, Shimano was considered the standard for mountain bike components.

The range of Shimano's cycling offerings expanded throughout the 1980s. New shifting systems continued to be developed, such as the Rapidfire Remote (1989) for mountain bikes. The company began selling a line of bike shoes in 1988.

In 1988, Shimano set up a UK subsidiary that focused on fishing tackle sales. In the same year, Shimano shifted some of its fishing reel production to Singapore, which, due to the rise of the yen, was producing about ¥4 billion ($26 million) worth of bike parts a year. In 1989, Shimano established three subsidiaries in the Netherlands that sold an array of products.

Sales were ¥84 billion in 1989. Exports of Japanese bicycles and components as a whole grew furiously in the late 1980s, reported the Asahi News Service, reaching ¥115.4 billion ($848.7 million) in 1990. By now, one-third of Shimano's production went to Europe.

Shimano opened a plant in Malaysia in 1990. In the same year, the company bought an interest in Alfred Thun S.p.A. This was renamed Shimano Italia S.p.A. after the rest of the stock was acquired. A fishing equipment unit was also set up in Italy in 1990. In addition, Shimano was expanding its Singapore operations. The company also set up subsidiaries in Belgium and Indonesia in the early 1990s. The parent company's name was changed to Shimano, Inc. in 1991.

The proprietary SPD (Shimano Pedaling Dynamics) line of quick-release "clipless" pedals called was introduced in 1990. Evolution of the fishing tackle line soon saw the introduction of the Stella reel and the SHIP (Smooth and Hi-Power) system.

In 1995, Shimano rolled out its Nexus line of seven- and four-speed internal hubs for cruiser bicycles, which were growing in popularity in the United States due to their retro styling and simplicity of operation. Shimano was also developing an in-hub gear system that could be locked to prevent theft. It was introduced to the Japanese market in 1997.

Competition in Asia increased towards the end of the decade as European manufacturers entered this market. Bicycles had long been a staple form of transportation in China, and, as its economy grew, so did the demand for high-end bikes. The Far Eastern Economic Review had observed that most of China's 320 million bicycles did not have gears in the early 1990s. However, this was changing rapidly, and Shimano claimed a 50 percent market share on gears there.

After reports of cyclists being injured by broken cranks, Shimano recalled more than 2.5 million of them in 1997. It was the largest recall in the bike industry to date, reported the Los Angeles Times, and cost the company $15 million or more. Due to the popularity of Shimano's mountain bikes, the affected parts had been installed in about 50 different brands over the previous three years.

Shimano acquired G. Loomis Inc. in 1997 as it launched an Action Sports Division offering products for growing new sports such as snowboarding. Shimano set up a Golf Division in 1999 and continued to develop new products in other areas, such as a wobble-free fishing rod.

Shimano became more visible than ever on the global stage as longtime user Lance Armstrong began his winning streak at the Tour de France in 1999. While overseas production accounted for 30 percent of production in 2000, exports accounted for more than 80 percent of revenues of ¥141 billion. As the Japanese bike market stalled, the Nikkei Weekly reported Shimano was shifting the focus of its overseas plants to supplying local bike manufacturers rather than producing parts to export back to Japan. Shimano was investing ¥1 billion to boost production at its Shanghai plant by 60 percent and was adding a three-speed gear line there to meet new demand.

In 2001, the company set up a ¥5 billion factory in the Czech Republic to meet booming bike demand in Eastern Europe, as well as building a plant in mainland China. A Taiwanese unit was established in 2002, and a second, ¥2 billion ($17 million) factory opened in the People's Republic of China in 2003. Shimano also opened a ¥500 million ($4 million) fishing rod production facility on the site of its Kunshan, China, bike parts complex. The company was aiming to increase overseas production to half of total production by 2004, reported Asia Pulse.

After extensive design and testing, an automatic gear shifter for bicycles was announced in late 2003. The device used magnets and other sensors to determine a bike's speed and make shift adjustments accordingly. Shimano was hoping to sell 50,000 units a year at ¥200,000 ($1800) each. Yoshizo Shimano told the Financial Times that the motivation for the idea was to allow bike commuters to concentrate on traffic by freeing them from the distraction of selecting gears.

Shimano continued to innovate as a manufacturer of fishing gear as well. In late 2001, it introduced the Dendomaru 3000SP, an electric reel with an LCD screen displaying the length of line cast as well as other data to give novices feedback on their technique. A few years later, Shimano developed an underwater fish detector in partnership with Furuno Electric Co., a maker of navigation instruments.

Sales were growing at the rate of 6 or 7 percent a year, reaching ¥143.7 billion in 2003. Net income grew more than 50 percent to ¥12.3 billion. As it proceeded into the first decade of the 21st century, the company had an estimated 70 percent share of the world market for bike parts.

Principal Subsidiaries

Dunphy Holding Pty. Ltd. (Australia); G. Loomis Products, Inc. (United States); P.T. Shimano Batam (Indonesia); Shimano American Corporation; Shimano Australia Pty. Ltd.; Shimano Belgium N.V.; Shimano Benelux B.V. (Netherlands); Shimano Canada Ltd.; Shimano Components (Malaysia) Sdn. Bhd.; Shimano Czech Republic s.r.o.; Shimano Eurasia ooo (Russia); Shimano (Europa) GmbH (Germany); Shimano Europe Holding B.V. (Netherlands); Shimano Europe Fishing Holding B.V. (Netherlands); Shimano France Composants Cycles S.A.S.; Shimano Italia S.p.A.; Shimano Italy Fishing S.r.l.; Shimano (Kunshan) Bicycle Components Co., Ltd. (China); Shimano (Kunshan) Fishing Tackle Co., Ltd. (China); Shimano (Mersing) Sdn. Bhd. (Malaysia); Shimano (Shanghai) Bicycle Components Co., Ltd. (China); Shimano (Singapore) Pte. Ltd.; Shimano Taiwan Co., Ltd.; Shimano U.K. Ltd.; Wooyun Co., Ltd. (Korea).

Principal Divisions

Action Sports; Cycling; Fishing; Golf.

Principal Competitors

Campagnolo s.r.l.; Daiwa Seiko Inc.; Falcon Cycle Parts; SR Suntour Inc.; SRAM Corporation; Sun Race Sturmey-Archer Inc.

Further Reading

Dickerson, Marla, "Shimano to Recall 2.5 Million Bicycle Cranks," Los Angeles Times, July 10, 1997, p. D2.

Foremski, Tom, "Fishing Gear Maker Floats a Helpful Idea," Financial Times (London), February 3, 1999, p. 5.

Friedland, Jonathan, "Components of Success: Japanese Bicycle-Parts Maker Shimano Eyes China," Far Easter Economic Review, November 18, 1993, p. 66.

"Japan's Exports of Bicycle Parts Show Rapid Growth," Asahi News Service, April 9, 1991.

"Japan's Shimano to Invest US$17.1 Mln in New Chinese Subsidiary," Asia Pulse, March 11, 2003.

Kanabayashi, Masayoshi, "Japan's Shimano Prospers Amid Gloom with Line of High-Tech Bicycle Gear," Wall Street Journal, January 13, 1994, p. A6.

Kwan Weng Kin, "How Shimano Pedalled Its Way to Success," Straits Times (Singapore), August 3, 2003.

"LCD on Fishing Reel Dispenses Tips for Novice Anglers," Nikkei Weekly (Japan), December 3, 2001.

Marsh, Peter, "New Products Crucial to Success," Financial Times (London), Survey--Manufacturing Excellence, May 21, 2001, p. 2.

Mitchell, Colin, "A New Line in Fishing Rods," Guardian (Manchester), The Guardian Online Page, October 22, 1998, p. 6.

"Motorized Reels Hook More Anglers," Nikkei Weekly (Japan), February 21, 2000, p. 16.

"Not a Single Worker Retrenched Since 1973," Straits Times, April 26, 1998.

"Shimano Acquires EGS Patents (Shimano Rachete les Brevets d'EGS)," La Tribune, July 13, 2000, p. 21.

"Shimano Aims to Lift Chinese Sales of High-End Bike Parts," Nikkei Report, April 23, 2004.

"Shimano Develops Automatic Bicycle Gear-Shifter," Nikkei Report, November 14, 2003.

"Shimano Group Profit Pedaling Toward All-Time High," Dow Jones International News, July 2, 1999.

"Shimano On Course to Raise Gear Production Overseas," Nikkei Weekly (Japan), September 4, 2000.

"Shimano Steps up Activities in Asean," Business Times Singapore, December 11, 1990, p 28.

"Substitute Teacher; Firms Turn Tutor for Schoolkids," Asahi Shimbun, March 14, 2002.

Thisdell, Dan, "From Its Humble Start in a Swordmaking Centre, Shimano, the Japanese Manufacturer of Bicycle Components, Has Become a Hallmark of Quality," Management Today, March 6, 1990, p. 74.

Vickers, Graham, "Graham Vickers Explains How a Japanese Cycle Component Maker Is Having a Growing Impact on the High Quality Bicycle Market," Design Week, April 19, 1987, p. 19.

Voigt, Kevin, "Your Life--The Interview: Pedal Power," Asian Wall Street Journal, November 28, 2003, p. P3.

— Frederick C. Ingram

Shimano, Inc.
Type	Public
Founded	February, 1921
Headquarters	Japan
Key people	Yozo Shimano (President) Yoshizo Shimano (Chairman)
Industry	cycling components, fishing tackle, snowboarding equipment
Products	Bicycle and Related Components
Revenue	undisclosed
Employees	975 (unconsolidated) 7003 (consolidated)
Slogan	unknown
Website	www.shimano.com

Shimano, Inc. (OTCBB: SHMDF, FWB: SHM) is a Japanese multinational manufacturer of cycling components, fishing tackle, and snowboarding equipment.

In 2005, the company had net sales of US$1.4 billion. Bicycle components provided 75 % of its sales income. Fishing tackle produced 23 % of the company's sales income, while other products—including snowboarding equipment and other forged parts—produced about 2 % of its sales income. Shimano produced golf supplies until 2005, when they abandoned the enterprise as unprofitable.

Headquartered in Sakai, Japan, the company has 32 consolidated subsidiaries and 11 unconsolidated subsidiaries. Its primary manufacturing plants are in Kunshan, Malaysia, and Singapore, while its sales are in Europe (41 % of total sales) and North America (17 %).

Shimano is publicly traded and has 102.8 million shares of common stock outstanding.^[1]

Cycling

Shimano products include drivetrain, brake, wheel and pedal components for children, hybrid, road and mountain bikes. These components are generally organised as groupsets intended to be used as a near complete collection of a bicycle's mechanical parts.

The components include: crankset comprising cranks and chainrings; bottom bracket; chain; rear gear cogs or cassette; front and rear wheel hubs; gear shift levers; brakes; brake levers; cables; front and rear gear mechanisms or dérailleurs. Shimano Total Integration (STI) is Shimano's integrated shifter and brake lever combination for racing bicycles.

The Italian firm Campagnolo is a competitor as the other major manufacturer of road groupsets. SRAM is a competitor as the other major manufacturer of mountain bike groupsets, and in 2006 they introduced two road groupsets which have had increasing success. SRAM and Shimano also compete strongly in the leisure and commuter market, primarily in Europe.

When the 1970s United States bike boom exceeded the capacity of the European bicycle component manufacturers, Japanese manufacturers SunTour and Shimano rapidly stepped in to fill the void. While both companies provided products for all price-ranges of the market, SunTour also focused on refinement of existing systems and designs for higher end products, while Shimano initially paid more attention to rethinking the basic systems and bringing out innovations such as Positron shifting (a precursor to index shifting) and front freewheel systems at the low end of the market.

In the 1980s, with Shimano pushing technological innovation and lower prices, the more traditional European component manufacturers lost significant market presence. During this period, in contrast to the near-universal marketing technique of introducing innovations on the expensive side of the marketplace and relying on consumer demand to emulate early adopters along with economy of scale to bring them into the mass market, Shimano and SunTour (to a lesser extent) introduced new technologies at the lowest end of the bicycle market, using lower cost and often heavier and less durable materials and techniques, only moving them further upmarket if they established themselves in the lower market segments.

In the 1980-1983 period, Shimano introduced two groupsets with "AX" technology. Features of these components include aerodynamic styling, centre-pull brakes, brake levers with concealed cables, and ergonomic pedals.

By 1985 Shimano introduced innovation only at the highest quality level (DuraAce for road bikes and Deore XT for mountain bikes), then trickled the technology down to lower product levels as it became proven and accepted. Innovations include index shifting (known as SIS, Shimano Index Shifting), freehubs, dual-pivot brakes, 8 and then 9 speed dérailleurs, and combined gear and brake levers. Also, these components could only work properly when used with other Shimano components, e.g. its gear rear dérailleurs has to be used with the correct Shimano gear levers, cables, freehub and cassette.

Another less successful innovation was the non-circular biopace chainring. SunTour tried to catch up to this technological leap, but by the end of the 1980s SunTour had lost the technological and commercial battle and Shimano had achieved the status as the largest manufacturer of bicycle components in the world.

Shimano's marketplace domination that developed in the 1990s quickly led to the perception by some critics that Shimano had become a marketplace bully with monopolistic intentions. This viewpoint was based on the fact that Shimano became oriented towards integrating all of their components with each other, with the result being that if any Shimano components were to be used, then the entire bike would need to be built from matching Shimano components. The alternative perspective is that by controlling the mix of components on the bicycle, a manufacturer such as Shimano can control how well their own product functions. Shimano's primary competitors (Campagnolo and SRAM) also make proprietary designs that limit the opportunity to mix and match componentry. In a technology-driven industry such as the bicycle industry, which has not demonstrated a proactive attitude toward standardization throughout its 100+ year history, the market leader will always be criticized as monopolistic when introducing proprietary innovations. Shimano seems to cycle between this "integrated system" approach and more open approaches as it tries to find a balance between the market's desire for innovation and its desire for openness and flexibility.^{[original research?]}

For the most recent example, in 2003 Shimano introduced "Dual Control" to mountain bikes, where the gear shift mechanism is integrated into the brake levers. This development was controversial as the use of Dual Control integrated shifting for hydraulic disc brakes required using Shimano hydraulic disc brakes, locking competitors out of the premium end of the market. However with their 2007 product line, Shimano moved back to making separate braking and shifting components fully available in addition to the integrated "Dual Control" components, a move to satisfy riders that wished to use Shimano shifting with other brands of disc brakes.

Shimano introduced the SPD range of clipless pedals and matching shoes, specifically designed so that the shoes could be used for walking. The shoes have a recess in the bottom of the sole for fitting the smaller cleats and therefore it does not protrude, while conventional clipless road pedals are designed for road cycling shoes which have smooth soles with large protruding cleats, which cannot be used for walking. The SPD range, in addition to other off-road refinements, were designed to be used with treaded soles that more closely resemble rugged hiking boots. SPD pedals and shoes soon established themselves as the market standard in this sector, although many other manufacturers have developed alternatives which are arguably less prone to being clogged by mud and/or easier to adjust. However, the SPD dominance in this sector has meant that alternative pedal manufacturers nearly always design their pedals to be usable with Shimano shoes, and likewise mountain bike shoe manufacturers make their shoes "Shimano SPD" compatible. SPD has spawned 2 types of road cleats which are incompatible with standard SPD pedals and some shoes - SPD-R and SPD-SL. SPD-R is a now defunct pedal standard. SPD-SL is basically a copy of the standard Look clipless pedal system. It has a wide, one-sided platform and a triangular cleat that is Look 3-bolt compatible.

Shimano innovations

Shimano have developed many new items, some successful and others not.

Nexus - Computerized automatic transmission, currently featured in Shimano's Coasting group.

Dyna Drive - a pedal system with no pedal axle and with the bearings located in the part of the pedal which screws into the crank. This required an oversized hole in the crank 25mm (1" diameter) to accept the Dyna Drive pedals. The theory behind this was to allow the foot to be lower than the pedal axle for better biomechanics. This system did not catch on, one reason being that the pedal bearings wore out quickly.

Biopace - Biopace chainrings were not circular but slightly elliptical and were developed in the late 1980s, but like Dyna Drive did not catch on.

Freehub - Shimano introduced a combined rear hub and freewheel in the late 1970s which they named "freehub". But it didn't catch on, as it was incompatible with the then standard separate hub and screw-on freewheel. When a larger number of rear sprockets came to be used, the freehub concept was re-introduced, and is now the dominant rear hub type.

Metric chain - Shimano designed chains with a 10mm pitch instead of the conventional half inch pitch as well as sprockets and chainrings for use with this metric chain. This did not catch on. For a time 10mm pitch chains, sprockets, and chainrings, were used for motor-paced racing, to reduce the size and weight of the transmission system.

Hyperglide - Specially formed rear cogs that allow upshifting under load.

STI (the marketing name for the integration of shifting into the brake levers) for road bikes, enabling the rider to shift without taking the hands off the brake levers. This made it possible to shift during uphill passages that require getting out of the saddle, and added general convenience for the rider.

SLR ("Shimano Linear Response") - Integration of a return spring into the brake lever, pushing the brake cable back when the lever is released. The idea behind this was that the return spring in the actual brake could be designed to be weaker, thus giving an overall feeling of easier operation.

Results in professional cycling

In the 1988 Giro d'Italia, Andy Hampsten rode Shimano to its first Grand Tour victory. Lance Armstrong's 1999 victory in the Tour de France on a Shimano Dura-Ace equipped Trek was the first time Shimano components had been used to win the Maillot Jaune. In 2002, Dura-Ace equipped bikes were ridden to victory in the Tour de France (Lance Armstrong), Giro d'Italia (Paolo Savoldelli), and Vuelta a España (Aitor González), marking the first time Shimano componentry had been used to win all three grand tours. World championships in both the road and time trial disciplines were won on Shimano equipment.

VIA

Many people believe that "VIA", which is stamped on all Shimano parts, is a form of corporate logo, since it does not appear on Campagnolo parts, for instance. In fact, VIA is an official approval stamp used to certify parts of Japanese vehicles - including bicycles. This mark signifies compliance with certain quality standards, and is similar to the "UL" (Underwriter Laboratories) mark.

Road bicycle groupsets

For 2006, road bicycle groupsets include:

• Dura-Ace (10 speed)
• Ultegra SL (new for 2008)
• Ultegra (10 speed)
• 105 (10 speed)
• Tiagra (9 speed with redesigned "10 speed" hood shape for 2007)
• Sora (8 speed)
• 2200 (8 speed)

Mountain bike groupsets

Current mountain bike groupsets include:

• XTR (9 speed) - Top of the range for cross-country mountain bikes
• Deore XT (9 speed)(new for 2008; shadow)
• Deore LX (9 speed)
• Deore (9 speed)
• Saint (9 speed) - Top of the range for downhill and freeride bikes, and many components are based on the XT groupset
• Hone (9 speed) - Cheaper downhill/freeride specific groupset, similar to the LX groupset
• Alivio (8 speed)
• Acera (8 speed)
• Altus (8 speed)
• Tourney (7 speed) - Includes several different levels of quality, and can be found on department-store bicycles

Note: Saint and Hone are Shimano's only downhill specific groups.

Other groupsets

Other current groupsets include:

• Caprio - This is a groupset designed for small wheeled bikes such as folders and features a cassette with a 9-tooth sprocket
• Nexave - This consists of several sub-groupsets designed for comfort and commuting bikes some of which feature internal hub gears and roller brakes.

External links

• Shimano.com
• History of Dura-Ace and Compatibility at Sheldonbrown.com

References

1. ^ Shimano Annual Report, 2005 (English)

This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)