Elan and the Competition Boat Industry

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Case Study:

Élan and the Competition Ski Boat Industry

Robert Visser, 5002930146

Punnapa K. Pusayanonda, 4702641038

Patumporn Srikrisanapol, 4702640642

Thammasat University
Case Study, Strategic Management
Fall 07
Group 5
Prof. James P. Fitzpatrick
Deadline: 19. September 2007

1. Company Overview3
2. SWOT Analysis4
2.1 Strength4
2.2 Weakness4
2.3 Threat5
2.4 Opportunity6
3. Situation Analysis8
3.1 Financial Analysis8
3.2 Marketing Analysis9
3.3 Management Critique11
3.4 Distinctive Competencies12
3.5 Sustainable Competitive Advantage12
4. Problems13
5. Problem Statement17
5.1 Rationale17
6. Alternatives18
7. Recommendations21
7.1 First Recommendation22
7.2 Second Recommendation22

1. Company Overview
Jay Blossman, a politician, bought the American Skier, a competition ski boat company which has a reputation for high quality, exceptional product performance and cutting-edge innovation. It was owned by the financially troubled American Performance Marine and Blossman could buy it at a bargain price. Jay asked his friend, Ben Favret, a professional water-skier and world champion to join the team to resurrect the bankrupted company. Their goal is to become "the true market leader in profitability, quality, manufacturing cost efficiency and eventually sales." Jay and Ben renamed the company to "Elan Boats" with the mission to be hyper-efficient in the manufacturing and marketing of inboard runabout boats for recreational and competitive water sport enthusiasts. Further Elan aims at building long-term relationships with customers through superior training and customer support. Elan aims to offer better boats than the competitors at a lower price. As Favret assessed the market, he found out that none of the industry leaders are particularly cost efficient and that there are a group of excessive customers who are dissatisfied with overpriced and underperforming boats. To satisfy the need of these customers, Elan came up with eight models comprising three series which are: The American Skier Series, Volante Series, and Eagle Air series. The American Skier series is aimed at filling the neglected tournament skier niche who demands high performance. The Volante series is the company's luxury model, and finally the Eagle Air series is Elan's wakeboard product line. The target customers for Elan are white males between the ages of 25-55 with a college education and income greater than $50,000. For the year 2000 Elan boats had 30 clients and further expects to have at least 50 clients in 2001, 60 in 2002 and 72 in 2003. Blossman and Favret bought the manufacturing plant from the American Performance Marine in Kentwood and are planning to invest in a new manufacturing facility in Covington Industrial Park in 2004. Like this they try to dominate their own backyard that is the area along the Gulf coast region located in the mid west of United States. Elan's distribution plan is to bypass boat retailers and hence sell directly to the end users. One attempt to market their boats and acquire more customers is by offering a free week of ski school for every client and a free lesson and boat demo for the prospective buyers.

2. SWOT Analysis
2.1 Strength
Jay Blossman made a great deal by buying a bankrupt, debt-free American Skier company at a bargain price. This means, the company can eliminate the largest barrier to enter the market, which is the high capital expenditure to start up a boat company. Therefore, the firm has an advantage in having low overhead costs and no debt. The company was renamed to "Elan Boats"; however, the Brand name of American skier has been kept, since it has brand recognition and stands for high quality boats. Ben Favret is a professional water-skier and has won many awards from Pro-Tour Champion to World Champion, this proves that he has the knowledge concerning the waterskiing sport and market. He knows what equipment is the best to...
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