Industry's dominant economic features.

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Ottoman’s

Élan, a small new entrant to the ski boat market, has put together plans to produce high-performing competition ski boats and sell them directly to waterskiing enthusiasts in the southeastern part of the U.S.  Élan’s strengths and focus are on the tournament skier niche. We will see whether this niche big enough to support Élan and   Can the company realistically expect to compete successfully against the long-time industry leaders—MasterCraft, Correct Craft, and Malibu.

For that purpose we would assess market conditions in the competition ski boat industry, Élan’s position and competitive capabilities in this industry, and Élan’s strategic plan.  

To start with we see first the industry’s dominant economic features.

Market Size: Retail sales $ 25.6 Billion

Scope of Competitive Rivalry: No price competition, Intense nationally among strong competitors

Market Growth Rate: 23.92; a decrease of 6.67% from previous year

Stage in Life cycle: Late growth

Number of companies in industry: 14

Customers:72.2 million people participating in recreational boating activities

Degree of Vertical integration: Only found in case where boat manufacturers partner with engine makers.

Ease of Entry / Exit: Capital expenditures are largest barriers.

R & D design, shaping & design of new boat mold cost in excess of $400,000 per model. To produce 100 boats per year at least 20000 square feet facility required, Minimum scale plants cost a minimum of 350,000.Second barrier is customer loyalty to well established names. Large dealer networks.

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Technology/innovation: Firms do innovate

Product characteristics: Customized. Different firms tend to differentiate than other competing firms.

Scale Economies: Leaders have large dealer networks and able to achieve greater scale economies.

Learning & Experience Curve: Learning curves are not easier compared to  1990 when  there was lower course and equipment requirement.

Strength of competitive forces confronting the companies in the competition ski boat industry with five-force analysis:

Rivalry among the producers of ski boats

Primary weapons of competitive rivalry among the ski boat manufacturers include

  • Innovative performance features
  • Styling and design
  • Breadth of product ...

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