Reshoring Lost Capabilities: The Bicycle Manufacturers’ Arduous Transition to Bring Production Back to Europe

Organizations all over the globe face supply chain challenges caused by the recent Covid-19 pandemic. The European bicycle industry, which gradually shifted its production to Asia in recent decades, is particularly affected. To increase resilience, more and more bicycle manufacturers are showing efforts on relocating production to Europe via reshoring- and insourcing activities. While reshoring describes the relocation of value creation to geographically closer locations, insourcing refers to the reincorporation of activities that were previously performed by external suppliers. This study investigates how incumbent bicycle manufacturers improve their resilience. Qualitative data is obtained by analyzing corporate documents, magazines and several in-depth interviews with industry experts and manufacturers’ top managers. Our study shows that attempts to bring production back to Europe are discernible. However, the results suggest that reshoring activities prevail over insourcing activities. One reason for this lies in Asia’s knowledge and competence lead paired with challenges in rebuilding lost capabilities. To tackle this strategic issue, we discuss the role of organizational ambidexterity, which may provide manufacturers with conceptual guidance in their arduous transition to bring production back to Europe.