Boat industry analysis
... The introduction of their flagship (Ski Nautique) in 1961 was a big success because the boat claims more world records than any other towboat. ... They are well known for testing each boat before shipment and they provide a 5 year warranty. ... From the mentioned criteria it becomes obvious that Élan does not have the same strength like the 3 industry leaders (MasterCraft, Correct Craft and Malibu). ... Drawing on your analysis of the Ski Boat Industry, is the industry attractive to an existing ski boat manufacturer? ... There are many different models to analyse the boat industry attractiveness like the main economic features, driving forces, key succuss factors and the 5 forces by Porter. ... New Entrants High entry barriers: • Economies of scale for the industry leaders because they had established large dealer networks to get orders earlier and improve their production planning. ... • High capital requirements needed to either build up a new boat company or invest in R & D to design new boats. • High customer loyalty to the industry leaders. ... • Personal Water Craft (PWC) is not safe because drivers have to control both skis and the boat at the same time. ... Buyer’s power • Buyers can purchase from several manufactures • Low bargaining power for individuals but moderate bargaining power for retailers • Low switching costs for buyers • Buyers have good overview of the market (6 months decisions) Moderate power To judge the attractiveness for the existing boat manufactures it is important to have a close look at the entry barriers. In our case we have high entry barriers this means the industry is attractive for the existing companies. In combination with the economic information (steady market growth), driving forces and key success factors, the final conclusion is that the boat industry is a lucrative market. ... Drawing from both your industry analysis and company situational analysis, what would you conclude are the major strategic issues facing Élan? ... A famous model to describe both the company situation as well as the industry environment is the SWOT Analysis. The basic idea behind the SWOT Analysis is that there has to be a balance between the company’s resource capability (reflected as strengths and weaknesses) and its external situation (reflected as opportunities and threats) to make good strategic decisions. Strengths • Powerful mission that combines cost efficiency and the needs of the customers • Élan has know-how of the market in form of Ben Favret who was a world champion water skier and has good connections to recruit professionals • Due to small facilities Élan produces high quality boats according to demand • Because of the basement price for the company they have low overhead costs minimal start up costs, allowing the company to be debt free • Brand image (American Skier) stands for tradition and recognition Weaknesses • Élan has a low market share • The boat industry is subject to seasonal sales • Due to their market share they do not have economies of scale in form of bargaining power • Low budget for R & D and marketing campaigns • They have no strategic alliance Opportunities • Élan can build up a cost efficient production due by low overheads, no debts and the small and flexible production line.