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Ski-Boats Industry

Presented to, Mr. Ahsan Durrani


Presented by,
M. Aurangzeb Siddiqui (26949)
Mohommad Ali

Q1.
What
are the industrys dominant features?
Market
Size and Growth: The skiboat industry is a very big industry
estimating sales of $25.6 billion in 2000, an increase of 15% from 1999,
the industry had face steady growth since it was emerged and the
position of this industry in life cycle lies in early maturity, because they
still have to be in state of mature.
Scope of Competitive Rivalry: There are number of rivals and

competitors in this industry. Some rivals compete on the innovation they


bring to the industry and some compete on fewer prices
Number of Rivals: This industry is dominated by few firms as this

industry provides expensive and luxury item so their target audience is


niche.
Buyer Needs and Requirements: Buyers of this industry are specific,

not everyone will buy skyboat. Whole seller plays an important role, they
sometimes educate buyers as well, buyer want innovative products, high
on technology and low on consumption.

Degree of Product Differentiation: Rivals are consistently coming

up with differentiated products, new ideas and some firms have made
price their differentiated competency to attract more buyers.
Product Innovation: R & D and Product innovation is the most

important part of this industry and there is an opportunity for first


movers to grab the big share in the market over their competitors.
Pace of Technological Change: Technology is another important

major factor in this industry, upgraded equipment has been the core
competency in this industry. To survive in this industry you have to be
ready for technological challenges that come across your way.
Economies of Scale: In this industry Organizations with high volume

have significant cost advantage over small scale firms.


Learning and Experience Curve Effect: Master Craft and Correct

Craft being pioneer of the industry have significant edge over other
competitors because of their experience in the industry

Q2. Porters Forces acting on the


industry. Draw your conclusion
about the industry
Threats from buyers:Backward integration.
There are substitute available in the market.
Product differentiation and product innovation.
Brand identity is another very important factor.
Threats from suppliers:Suppliers are concentrated.
Presence of substitute seller in the market.
Impact of inputs on costs in big way and also
differentiation.

Threats from substitute:Switching cost.


Price performance trade off of substitutes.
Innovative and high on technology are appreciated by
customer immediately.
Threats from Competitors:Difference in products attributes.
Fixed cost or Value added features or services.
Brand identity.
Intermittent over capacity.

Threat of New Entrants/ Entry Barriers


Factors
Economies
of scale
Capital
require
red
Access to
distributio
n channels
Expected
retaliation
Differentia
tion
Brand
Loyalty
Experienc
e Curve
Govt.
Action

HUF MUF
A
A

Neutral

MFA HFA

small

Ample

High
Restr
icted

5
5

Low
Low
Low
Insigni
ficant
Low

large

Low

comment

5
5
4

High
High
High
Signi
ficant
High

Exit Barriers

Exit Barriers
Factors
Specialized
Assets
Fixed Cost
of Exit
Strategic
interrelation
ship
Governmen
t Barriers

HUA MUA Neut


ral
Hi

Hi

HA

Comments
LOW

Hi
Hi

MA

Low
Low

2
5

Low

Competitive Rivalry
Factors
Composition of
Competitors
Mkt. Growth
rate
Scope of
competition
Fixed storage
Cost
Capacity
Increase
Degree of
differentiation
Strategic Stake

HU
FA
Equal
Size
Slow
Global
High

MU
FA

Neu
tral

MFA HF
A

4
4
4
4

Unequ
al Size
High
Domes
tic
Low
Small

Large

Com
modit
y
High

Comment

High

Low

Threat Of Substitute Product


Factors
Threat of
Obsolescence
of Industrys
product
Aggressivene
ss of
substitute
products in
promotion
Switching
Cost
Perceived
price/ value

HUF
A

MUFA N

Hi

Hi

Lo
w
Hi

Commen
t

MFA HFA

4
4

Low

Low

High
Low

Power of Supplier
Factors
# of important
Suppliers
Switching cost
Availability of
substitutes
Threat of forward
integration
Importance of
Buyer industry to
suppliers profit
Quantity
purchased by the
industry of
suppliers
product
Suppliers product
an important
input to the
buyers business

HUF
A

MUFA

N MFA HFA

Few
High
low
High

comme
nt

4
4

Many

high
Low

Low

small

large

low

High

Highly
Import
ant

Less
impor
tant

Power Of Buyer
Factors
Number
of
Important
buyers
Threat of
Backward
integratio
n
Product
supplied
Switching
cost
% of
buyers
cost
Profit
earned by
buyer
Importanc
e to final
quality of

HUFA MUFA

MFA

HFA

Few

Comment
Many

High

Low

Commodi
ty

Specialt
y

low
High

Low

high
Low
High

High

1
low

Overall Industry attractiveness

Factors
Entry Barriers
Exit Barriers
Rivalry among
existing firms
Power of
buyers
Power of
Suppliers
Threat of
substitutes

Unfavorab Neutr
le
al

Favorable
4.5
3.75
4.15
3.5
3.3
4.25

Conclusion.
The Industry is highly favorable as,
a) There are high capital requirements, strong

b)

c)
d)
e)

brand loyalty and differentiation and restrictive


government policies.
The product of rival sellers are strongly
differentiated and sales are concentrated among
a few large sellers.
Substitutes exist in a variety but due to prices
substitute wont affect the actual product.
Industry members account for a big fraction of
suppliers sales.
Buyers are small and numerous relative to
sellers.

Q3. What are the three or four major drivers of change?


Technological change and manufacturing process
Innovation:

Major driver for change.


Advance method of techniques for manufacturing.
For survival, updated products needed.
V-engine and EFI engine.

Entry or Exit of a Major Firm:


Few sellers.
First-mover enjoys the share.
Entry or exit of any competitor effects the profit of
every other competitor.

Regulatory Influences and Government policy


changes:
Safety, courtesy and environmental issues

become more prevalent and regulatory authorities


start taking it serious.
In 1991, Floridas Department of Natural
Resources proposed legislation to establish a
speed limit of 30 mph.
In response to this, USA water ski created a Water
ways education committee to educate people
about boating, legislation and teaching them how
to organize them and how to follow the regulation
in this industry

Product and Market Innovation:


The most important factor in water ski boat
industry.
Malibu is known for its innovation and quality.
Correct Craft and Master Craft has been the
innovator and pioneer in the industry.
Master Craft has somehow maintain there
number one position but Correct Craft faces
huge loss in 200 because of its poor marketing
strategies.
Product innovation and market innovation is
the most important factor as new ways and
technology is consistently coming in this area.

Correct
Craft
Skier
Choice
Tige Boats
Centurion

Infinity
American
Skier (Elan)

Master Crafts
Malibu Boats

Low Prices

High Prices

Q4. What are strategic groups within the industry?

Few Models

Many Models

The strategic groups within industry two

industry are now competing on high prices and


many models. Mastercraft the oldest and
innovator and Malibu who just cross the correct
craft and now competing with top most ski
company. They both are making 15 models in
the industry. Dealing in wholesale and retail.
However Correct craft are now emphasizing on
better product line to compete with top 2.
Correct craft is now a chart of high prices and
few models. Ski industry there are many
companies but these are the most top
companies including infinity and American Skier
which are part of strategic group

Q5. What are the major Key success factors in the industry?
Product Innovation:
Correct craft became the innovator of tow-boats and Ski Nautique and enjoy the
second position for almost a decade.
Malibu boats over take Correct craft position by their consistent image of being
innovative.
As this is a luxury product, its expensive in fuel consumption and maintenance,
buyer needs low consumption and high on technology products.
EFI and V-drive engine is the latest innovation which gives speed boats one of
innovation that customer go for.
Price and Quality:
Price and Quality is also one of important factor that leads to success, in this
industry Malibu boats have managed to prove that.
Because there are very mechanics of skiboats and prices are very high, so
customer wants a quality product.
Many competitor competes on low prices and thus cutting edge of major
manufacturers

Successful product positioning:


The market is concentrated, only successful
positioning gives you profit.
These products should be positioned in cold
areas where there are more seas.
Should be targeted those regions, where this
sport is being supported.
Target audience of this industry mainly lies in
America, Canada, Australia, West India and
some part of Africa.

Successful promotional programs:


People are not well aware of the products.
People need to be educated about water ski industry.
More than 60% of customers are attracted by boat
shows.
Giants like Correct craft face loss due its poor
promotional programs.
Ability to manufacture/assemble or customized to
buyer specification:
Buyer requires customization.
Malibu boats have been keen in customizing for their
customer specifications.
Advance methods of manufacturing according to
customers perception is the key success factor in this
industry.

Competitive Profile
Strategic
Weight
Master Craft
Weighted
Malibu Boats
Factors Matrix
(rates)
Score
(rates)

Weighted

American

Weighted

Score

Skier Elan

Score

(rates)
Product

0.3

0.9

1.2

0.6

0.15

0.6

0.45

0.45

0.2

0.8

0.6

0.2

0.25

0.75

0.5

0.75

0.1

0.2

0.3

0.1

Innovation
Price &
Quality
Successful
product
positioning

Successful
promotional
programs

Ability of
customization
Total

3.25

3.05

2.1

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