A brief environmental analysis of Élan and the competition Ski Boat Industry


Seminar Paper, 2004

9 Pages, Grade: Credit


Excerpt

Table of Contents

Part 1: Competitors on the Ski Boat Market

Part 2: Industry Analysis of the Ski Boat Market

Part 3: Major Strategic Issues

Part 4: Strategic Options

Part 1: Competitors on the Ski Boat Market

Which companies are Élan’s main competitors? How strong is each of these competitors in relation to Élan? What competitive moves can Élan expect from each of these competitors?

As Ben Favret wants to become „true market leader in profitability, quality, manufacturing cost efficiency and eventually sale“, Élan has to compete with the actual market leaders MasterCraft and Malibu. Furthermore there will be direct competition in the niche of tournament skier with Infinity Boats.

Actualy the market leader with 30 percent market share in the competitive boat industry is MasterCraft. Statistical Surveys counted 1,434 registered sales of their competition ski boats in the first six month 2001. Their facility gives them the possibility to produce about 6200 boats per year. With the widest range of 15 models in best quality on the market and ongoing innovations reinforced by various R&D alliances, MasterCraft’s brand name is well known and on the ski boat market. Élan has to recognize that MasterCraft proved to retain good sales even in bad economic circumstances most likely because of their wide diversification and its strong brand name. After the foundation of the concept boat idea which lowers their risk in introducing new models and features, MasterCraft might even bring more innovative products on the market. On the other hand the new ownership of senior managers and a venture capital company might cause disagreements in where to lead the company in the next years.

A different way goes the second biggest player in the market, Malibu Boats. With its three plants, one on the US west coast, another on the east cost and a lately purchased company in Australia, they had only low delivery cost and good revenue from international activities. Their R&D relies on computer-aided design and highly motivated employees, involved in the business by a stock ownership program. These factors and the strong marketing on events with their 23 professional sport stars gave Malibu Boats in a relatively short time a well-known brand name and the reputation of a high flyer. It is likely that they can urge their overseas sales in Canada, Europe or Asia. The excellent plant locations and knowledge in international trade might even make them the new market leader in the next years.

With a maximum production of about 500 boats per year, Infinity Boats is the smallest of Élans competitors. On the other hand they are also focusing on the competition ski boat segment, the same niche Élan wants to conquer with three of their models. Infinity boats’ management is a perfect mixture of market know-how, good contacts and engineering skills. Additionally with the former owner of MasterCraft as CEO, they surely have the necessary financial background to do the necessary R&D for the top quality and performance boats they want to offer. Although they do not plan to grow too fast, the will surely defeat their very lucrative niche against the new entrant Élan and perhaps even enter a price war.

In addition to the named companies, there are about 12 other competing on the US market.

Part 2: Industry Analysis of the Ski Boat Market

Drawing on the analysis of the Ski Boat Industry, is the industry attractive to an existing ski boat manufacturer, considering both the factors that increase and those that decrease attractiveness.

As mentioned in questions 1, there are a couple of participants in the US ski boat market. On the other hand it seems not to be overcrowded yet, because most of the competition is still on the basis of quality and features, in other words differentiation. The rivals do only little advertising and sales promotions, neglected niches can still be found, although the market stopped growing at the moment, and price wars have not occurred until now. Because of these facts the rivalry among the competitors can be seen as moderately powerful strength.

This, on the other hand, could motivate new companies to enter this industry. But considering the large capital requirement and the special design know-how combined with the importance of the strong brand preferences, causing customer loyalty, existing ski boat manufacturers need not fear new competitors, so his force’s influence on the industry is only weak.

What the companies in the ski boat industry should always keep in mind is the strong power of the engine manufacturers. There are only three major players in this industry, benefiting from their good reputation and the growing demand. Instead of high discounts they offer the ski boat companies partner programs for development and private-label agreements. As substitutes are not available, the only thing that weakens the power of the suppliers is the fact that the costs to switch from one supplier to another are very low.

The market force of the buyers has to be watched from two sides. On one hand are the private buyers who order only small numbers and have therefore no big bargaining power. On the other hand the retailers form the main distribution channel for the ski boat industry. As they order in higher quantities and have low switching cost to another company, they can get a good part of the sales margin. But as the ski boat manufacturers could forward integrate by increasing their direct sales with a troop of own salesmen, the all in all power of the buyers is only moderate.

[...]

Excerpt out of 9 pages

Details

Title
A brief environmental analysis of Élan and the competition Ski Boat Industry
College
Deakin University  (Faculty of Business and Law)
Course
Strategic Management
Grade
Credit
Author
Year
2004
Pages
9
Catalog Number
V24492
ISBN (eBook)
9783638273565
File size
498 KB
Language
English
Notes
without secondary literature.
Tags
Boat, Industry, Strategic, Management
Quote paper
Stefan Lacher (Author), 2004, A brief environmental analysis of Élan and the competition Ski Boat Industry, Munich, GRIN Verlag, https://www.grin.com/document/24492

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