If you were a shareholder in J/Boats, what would keep you up at night?
If I was a shareholder at J/Boats, there would be several things which I would concentrate on: First, I would concentrate more on finding ways of reducing both the fixed and the operating costs involved in making a boat. This would either be by looking for cheaper sources of raw materials or avoiding and eliminating any avoidable costs. As a result, this would lead to a reduction in the costs involved thus reducing the amount of money our customers would have to pay for our products (boats).
With the advancement in technologies and the world becoming a global village, technology is advancing at an alarming rate. It would thus be important also for the company to put more on modern innovations which seek to reduce costs on the side of the customer. For example by making boats that are faster, lighter, and more fuel-efficient compared to the old models. This would make sure that our customers feel that we had them in mind when we were designing and making our products as a result, more customers would love and be proud to be associated with us leading to increased sales.
Other than making our products more cost-efficient on both our side and that of our customers, as a shareholder, I would also concentrate on ensuring that that our boats perform to the expected standards as well as ensuring that during the design and making of our boats, all safety measures are taken into consideration eliminating any chance of engineering errors which would endanger the lives of our customers as they use our products.
In any market, if the company succeeds, its rivals are likely to copy their ideas. The likelihood of our rivals in the market copying our ideas (design and models) would be another thing that I would check on. I would thus encourage our model developers to design and create unique products that are hard to be copied by our rivals and which our customers would be able to easily identify and relate to.
Finally, though our sales have not been that poor, with the reputation our company has achieved, it should be making more than the current sales. To make sure our rivals never get anywhere near us, as a shareholder, I would embark on pressing our market dealers to be more aggressive when marketing our products. If they can’t, we would then search for new marketers who can ensure that our products are well known in the market and even those who cannot afford our products knows if a chance arose and they were to afford a boat, they would ask for our products.
If you had to divide J/Boats value into two separate pieces, how much value would you say is “on the book” and how much value would you say is intangible or “off book”?
If I was to divide the company values both “on the book” and “off-book”, I would give the company a 70 % value “on the book” and a 30% value “off-book”. The reason behind giving the tangible value the 70% is because the company needs the investments such as capital, (both fixed and operating) to succeed in making and marketing their products to the consumers who demand their products.
The 30% intangible value is mainly contributed by the company’s reputation, market behaviors, and how consumers respond to their products. With the company making quality boats, which are despite the high costs involved the product is still a success since the customers trust the quality and performance of their products. The thirty percent would decline if the company stopped following the customer demands, did not observe safety measures or their performance declined, and start designing products that their customers do not appreciate.
How might J/Boats secure a stronger market position relative to new entrants?
The company has already built a reputation as an organization that can be trusted in making quality products. To have a competitive edge over new entrants, the company needs to market their products aggressively. It is always expected that new market entrants market their products aggressively for customers to notice them.
The company should also reduce the operating costs involved as a result cut down on the price which the customers have to pay for. This would build a stronger market position since the customers already have faith in their quality models of boats and with an attractive price, everything would work to their advantage. Finally, a strong market position can also be achieved by reducing the number of models released and rather concentrate on marketing the existing models until their product life cycle start declining indicating the time for the next model introduction
What happens in this market when the economy sinks? How might J/Boats better prepare for those economic cycles?
Like in any other sector of the economy, if the economy sinks, people tend to buy only what is basic or fundamental (needed for survival) to them, and as a result that would translate in low demand for the boats which are a luxury, since the customers could not afford due to the economic hardships. For J/Boat company to survive the economic turmoil, it would have to prepare itself in advance and once the signs of the likelihood of the economy performing poorly are predictable, they would have to lower their production output to reduce the likelihood of making losses due to the low demand or overstocking the stocks with boats which used money during their making and assemblage and which have no one to demand.
How did J/Boats move “upmarket”? What does that mean for its ability to respond to economic cycles and competitors?
The J/Boats moved up the market by first of all studying and understanding the population demographics trends which were likely to impact positively or negatively on the making and sales of the boats. This helped the company develop its boats knowing vividly who their customers were. The company further understood the likely barriers which they would face on the acceptance of the boats in the market. As a result, they concentrated on a particular marketing niche which they were sure would use their products. Another factor that led to the company’s success was its concentration on reducing the production costs involved.
As a result, this attracted more customers to their market pool. By ensuring that their products were of high quality, more customers preferred their boats to those made by their rivals and this led to increased sales as a result the company grew to be a leader in the sector. The company also planned well the product life cycles of their different models thus they knew when to invest more in advertising and when to stop any investment in the product and introduce anew model in the market.
Its ability to respond to the economic cycles and its competitors means that competitors within the industry have to work more and invest much of their resources and time just like the J/Boats did to succeed and become a force to reckon in the boat industry.