Production Model For Elan Boats example essay topic

I. Major economic characteristics of the Industry A. The market size is relatively small with only 17 major ski and recreational wakeboard boat manufactures nation wide, including Australia. B. Rivalry among the boat manufacturers is spread out from the west coast to the east coast. C. Distribution is very small. Boat owners represent such a minute number of the total population of the country. D. Product characteristics: Ski boats / competition, wakeboard boats, and recreational boats. E. Organization: Private, Publicly traded. F. Industry: Competition Ski and Wakeboard boats. II. The industry's competitive 5 forces A. Competition in the Industry is moderate with about 17 boat manufacturers. The only thing that separates them apart is the ability to offer lower prices, establish brand recognition, and differentiate their products. B. Suppliers to the industry provide a moderate support to the boat manufacturers.

Because there are 3 major suppliers of engines they do not pose such a large threat to the manufacturers. This gives the boat manufacturers the choice to pick the appropriate engine. C. Buyers of the product from the manufacturers play a strong part in the success of the companies. They are essential because they are the main channels for the consumer to review and ultimately buy. D. Substitutes pose a weak threat to the industry. The only other alternatives are the solo, which allows one person to go skiing, and the cable rope that whips people around a track. E. Threat of entry of new competitors is weak. It takes a lot of capital and networking to successfully build a profitable company in this industry.. The factors that are causing major long -term industry change: A. Ability to differentiate ones product from another. B. Changing the attitudes of the consumers to gain trust in the manufacturers to provide adequate service. C. Technology is enhancing the popularity of the sport.

An example is the cruise control. This allows for the driver to remain at a constant speed. The Olympic committee is satisfied with this innovation and is willing to consider this as an official sport. D. The branching effect of companies is occurring. Dissatisfied employees are seeing opportunities arise for new start up companies. Pleasing the consumer is the new big issue. IV.

To be successful in the industry a firm must possess the following key success factors: A. Provide exceptional services. Keeping the customer happy counts. B. Establish brand recognition. C. Differentiating the product from others. Offering a different design with new technology enhancements is crucial. I. The Company's Strategies A. The generic business strategy consists of a vertical integration. The manufacturing of the boats is streamlined under one roof. B. None C. Elan diversifies itself by being more service oriented, implementing a distinct image, and by focusing on a under marketed competition ski boat segment. D. Functional-level strategies: 1.

The production model for Elan boats follows a fairly conservative approach. The cost of goods sold and the operating expenses only increase slightly from year-to year. 2. The marketing plan is very unique for Elan. They offer special boat rides, and free lessons for potential buyers.

Their expenses increase over the first two years, but this is common with increased sales. 3. Most of the financing is done through personal funding. Because the company was bought under bankruptcy circumstances, Ben Far vet was able to pay a good price for the company.

II. Company's Strengths A. Ability to function in a more efficient manner, unlike the competition. Keeping the costs down by revamping and streamlining the manufacturing process, would keep costs down in the production end of the business. B. Marketing is another strength of Elan. Having the ability to work with companies who provide accessories to the boat industry was a critical means of obtaining a larger market share through associations. C. The owner's self-determination to plug the void that existed in the industry. Always focus on the customer, because unhappy customers advertise their displeasures to others, especially potential buyers.. Elan's core competencies exist with the knowledge and know-how of the ski boat industry.

As a professional water skier Ben Favre t knows exactly how a boat should be constructed to meet the demands of a buyer. If this can be accomplished at a cheaper price and a higher quality, then a new buyers market will be created. IV.A. Elan did not have a lot of cash on hand to expand its business to compete with the top boat manufacturers. Starting off is hard to do, especially when a company competes with others who sell ten times the amount of boats per year B. Elan has to market itself differently from its competitors because they do not have huge cash reserves.

Their focus is on saturating certain markets while leaving national campaigns alone. C. Having an under utilized facility makes it very hard to expand and produce more models and a larger volume of boats for Elan. I. Elan needs to confront two major issues in order to become a more successful company. Elan has the capacity to build 150 boats per year. One can see that they are under capacity for the year of 2000, in which they only sold 30 boats. As for the projected next three years Elan makes a huge jump of about 100% for the first year, then it drops off to a near level increase.

It is only obvious that if they want to become a bigger player in the industry they should focus on maximizing any assets that exist. The other major issue of concern is that they want to have eight different models of boats to please their potential buyers. By having different products, costs shoot up dramatically, thus forcing the company to have to shift spending away from other crucial areas. II.A. Consolidate the factory into a smaller building. 1.

This would allow Elan to run more efficiently. If they increase the amount of boats being produced, then they should consider a bigger building to meet demand. 2. Having to move a huge operation can be very expensive and time consuming. B. Creating a comprehensive marketing campaign 1.

Allows for more brand recognition. People can relate to the product, thus they will be more inclined to buy it. 2. Advertising tends to be quite expensive, but with the right campaign it can be very beneficial. C. Narrowing the amount of boat models they have to save money. 1. Development costs decrease because the amount of labor and tooling necessary diminishes with fewer models 2.

Having only a few models of boats narrows the crowd of interested buyers tremendously. People want to have boats that are custom to their needs.. The most important action that Elan should follow would be the ability to control its internal costs. By having a plant, which is capable of handling five times the amount of work that is currently being produced, one can see that this is a negative factor plaguing the company.

Elan's boat projections are not a substantial increase over the next four years. It makes absolutely no sense to expand the operations if the amount of boats being purchased is constant over a number of crucial years. Wasting money on something that is not relevant to the growth of the company is an ill mistake. If Elan's ultimate goals are to become the number one boating manufacturer in the industry they must change their strategy altogether. Elan should focus utilizing its assets wisely for the future long-term growth of the company, not the present.