Wooden Boat Fittings
05-20-2002, 10:42 PM
Some time we ago we received a request here from a business study syndicate in Eastern Canada. The group was doing a case study to provide new strategic directions for a small boat-building company there. Part of the study naturally required a survey to be undertaken of the state of the industry as it is at present, and they asked for information from us in that regard.
The group has kindly sent me a copy of the Executive Summary to their report, and it makes quite interesting reading.
My respondent describes their client as, "a company that manufactures Small and Custom wooden boats, manufactures traditional fittings, performs repairs and offers boat storage."
I have been given permission to post the Executive Summary. With exception of removal of the company name, here it is verbatim --
_____________
Executive Summary
The future of wooden boat building on the East Coast is in a growth stage. Resurgence in this market began ten years ago and is anticipated to grow over the next ten years.
[The Company] has attained moderate growth for the past four years while maintaining the status quo. [The Company] has the core competencies to compete in this market but does not operate at full potential. A lack of strategy and technology are the root problems for [The Company]. This has resulted in losses on boat construction, undervaluing of services and lack of management information.
To address the lack of strategy, we recommend [The Company]:
Position itself as a high quality custom wooden boat builder offering a variety of complementary services for the boating enthusiast.
Manufacture fittings for internal use and as replacement parts on [Company] products only. Transfer labour resources to the construction department, which is more profitable.
Increase new large vessel revenue by implementing epoxy/wood composite construction methods.
Expand construction to include one large restoration project per year.
Market all products and services in the North Eastern United States (US) and Canadian markets.
To address the lack of technology, we recommend:
Upgrading computer hardware, utilization of accounting and project management software.
Outsourcing payroll.
Notwithstanding the above [The Company] will also:
Increase pricing to market levels.
Incorporate the business.
Discontinue construction of canoes, whitehalls and sloops.
Expand indoor storage by building a new shed and offer winterization and preventative maintenance services.
Develop and implement a human resource strategy.
Develop and implement performance measures.
Build intellectual capital through cross training.
Immediately begin training junior employees to replace senior employees who will be retiring in the near future.
[The Company] must focus on establishing a presence in the market and utilize its core competencies fully in conjunction with creating usable management information for decision-making. By focusing [The Company's] resources on products and services with greater profit potential, [The Company] will increase net income before tax by $100,136 in the first year. To realize the increase in net income [The Company] will incur additional cash outflows of $53,676.
This report provides a detailed implementation plan over the course of a year. We are confident this plan will enhance [The Company's] financial position.
________
I cannot of course vouch for the business acumen of the study syndicate. Nor do I have any but very general knowledge of the wooden boat industry in that part of the world. But I found the report interesting, and I guess we all at least would find its first paragraph encouraging.
Mike
The group has kindly sent me a copy of the Executive Summary to their report, and it makes quite interesting reading.
My respondent describes their client as, "a company that manufactures Small and Custom wooden boats, manufactures traditional fittings, performs repairs and offers boat storage."
I have been given permission to post the Executive Summary. With exception of removal of the company name, here it is verbatim --
_____________
Executive Summary
The future of wooden boat building on the East Coast is in a growth stage. Resurgence in this market began ten years ago and is anticipated to grow over the next ten years.
[The Company] has attained moderate growth for the past four years while maintaining the status quo. [The Company] has the core competencies to compete in this market but does not operate at full potential. A lack of strategy and technology are the root problems for [The Company]. This has resulted in losses on boat construction, undervaluing of services and lack of management information.
To address the lack of strategy, we recommend [The Company]:
Position itself as a high quality custom wooden boat builder offering a variety of complementary services for the boating enthusiast.
Manufacture fittings for internal use and as replacement parts on [Company] products only. Transfer labour resources to the construction department, which is more profitable.
Increase new large vessel revenue by implementing epoxy/wood composite construction methods.
Expand construction to include one large restoration project per year.
Market all products and services in the North Eastern United States (US) and Canadian markets.
To address the lack of technology, we recommend:
Upgrading computer hardware, utilization of accounting and project management software.
Outsourcing payroll.
Notwithstanding the above [The Company] will also:
Increase pricing to market levels.
Incorporate the business.
Discontinue construction of canoes, whitehalls and sloops.
Expand indoor storage by building a new shed and offer winterization and preventative maintenance services.
Develop and implement a human resource strategy.
Develop and implement performance measures.
Build intellectual capital through cross training.
Immediately begin training junior employees to replace senior employees who will be retiring in the near future.
[The Company] must focus on establishing a presence in the market and utilize its core competencies fully in conjunction with creating usable management information for decision-making. By focusing [The Company's] resources on products and services with greater profit potential, [The Company] will increase net income before tax by $100,136 in the first year. To realize the increase in net income [The Company] will incur additional cash outflows of $53,676.
This report provides a detailed implementation plan over the course of a year. We are confident this plan will enhance [The Company's] financial position.
________
I cannot of course vouch for the business acumen of the study syndicate. Nor do I have any but very general knowledge of the wooden boat industry in that part of the world. But I found the report interesting, and I guess we all at least would find its first paragraph encouraging.
Mike