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    QuickBoats Case

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    Thaneadpol Burapaskul
    QuickBoats, a manufacturer of small powerboats, has seen slowing sales growth despite past double-digit increases. The CEO has hired a consulting firm to identify factors behind the slowdown and growth opportunities. The consulting team analyzes industry and customer trends to understand the context. They find that while QuickBoats' market share is declining, the overall powerboat industry continues growing. Further analysis shows the industry growth is driven by increasing average boat prices, likely due to consumers purchasing larger, more expensive boats. The team then models the potential sales impact of QuickBoats introducing a mid-sized, higher-priced cruiser boat. Their research suggests a significant portion of existing loyal customers would upgrade to the cruiser, which could generate

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    QuickBoats Case

    Uploaded by

    Thaneadpol Burapaskul
    100 views5 pages
    QuickBoats, a manufacturer of small powerboats, has seen slowing sales growth despite past double-digit increases. The CEO has hired a consulting firm to identify factors behind the slowdown and growth opportunities. The consulting team analyzes industry and customer trends to understand the context. They find that while QuickBoats' market share is declining, the overall powerboat industry continues growing. Further analysis shows the industry growth is driven by increasing average boat prices, likely due to consumers purchasing larger, more expensive boats. The team then models the potential sales impact of QuickBoats introducing a mid-sized, higher-priced cruiser boat. Their research suggests a significant portion of existing loyal customers would upgrade to the cruiser, which could generate

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    QuickBoats, a manufacturer of small powerboats, has seen slowing sales growth despite past double-digit increases. The CEO has hired a consulting firm to identify factors behind the slowdown and growth opportunities. The consulting team analyzes industry and customer trends to understand the context. They find that while QuickBoats' market share is declining, the overall powerboat industry continues growing. Further analysis shows the industry growth is driven by increasing average boat prices, likely due to consumers purchasing larger, more expensive boats. The team then models the potential sales impact of QuickBoats introducing a mid-sized, higher-priced cruiser boat. Their research suggests a significant portion of existing loyal customers would upgrade to the cruiser, which could generate

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    100 views5 pages

    QuickBoats Case

    Uploaded by

    Thaneadpol Burapaskul
    QuickBoats, a manufacturer of small powerboats, has seen slowing sales growth despite past double-digit increases. The CEO has hired a consulting firm to identify factors behind the slowdown and growth opportunities. The consulting team analyzes industry and customer trends to understand the context. They find that while QuickBoats' market share is declining, the overall powerboat industry continues growing. Further analysis shows the industry growth is driven by increasing average boat prices, likely due to consumers purchasing larger, more expensive boats. The team then models the potential sales impact of QuickBoats introducing a mid-sized, higher-priced cruiser boat. Their research suggests a significant portion of existing loyal customers would upgrade to the cruiser, which could generate

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    Case Study: Case 4 Quick boats

    Is Bigger Better?
    Background: (Interviewer to read aloud) Our client is QuickBoats, a
    manufacturer of small powerboats, high-speed, engine driven boats
    under 5m in length. It designs, manufactures and sells it premium
    quality boats, which are priced at $30,000 per unit, through a
    dealership network on the East Coast of the United States.
    Quick Boats has historically boasted double-digit growth, but despite a
    good profit margin and stable cost structure, its sales have slowed and
    begun to flatten at $120m. The CEO has hired our firm to determine
    the factors behind this slowdown and identify sales growth
    opportunities.
    Question 1: (Read Aloud) The team lead has asked the team to begin
    thinking about QuickBoats situation. What background information
    would you like to gather to begin structuring your assessment of
    growth strategies QuickBoats.
    Answer 1: Understanding the following key areas will help you
    examine QuickBoats in the context of the powerboat industry and
    frame your analysis. The diagram below depicts one way to structure
    you thinking .
    Growth

    External
    Factors: The
    Market

    Industry: Is it
    growing,
    What are the
    major trends

    Customers:
    Who are
    they? How
    their

    Internal
    Factors: The
    Company

    Competitors:
    Who are
    they? How
    are they
    growing?

    Business:
    What is the
    current state
    of the
    business?
    What are the
    drivers of

    Question 2: (Read aloud and shown to interviewee) Your team has


    cosen to first explore industry trends and has collected some data on
    the U.S. powerboat industry. For ease of comparison, all data has been
    converted to a percentage of its 2003 value. What implications can you
    draw from this data?

    Case Study: Case 4 Quick boats

    Answer 2A: Although QuickBoats market share is declining, its overall


    revenues are increasing. For this result to hold, the powerboat industry
    must be continuing to grow. QuickBoats growth problem is apparently
    not reflective of a larger issue facing the industry.
    Question 2B: (read aloud) Your team conducts further research on the
    industry, and uncovers the following facts on the powerboat market.
    For ease of comparison all data has been converted to a percentage of
    its 2003 value. What conclusions could you potentially draw from this
    information? (cover answer 2b below)

    Case Study: Case 4 Quick boats

    Answer 2B: (read aloud after interviewee discusses the graphs) As


    hypothesized, the overall powerboat industry is exhibiting strong
    overall growth with revenues increasing by 50% from 2003-2007. The
    number of powerboat customers also increased over the same time
    span. However the increase in the number of customers is insufficient
    to account for the growth of the industry as a whole. Some other factor
    beyond new customers must be driving the increase in industry
    revenues.
    Question 2C: Your team receives some new data from a market
    research provider. For ease of comparison all data has been converted
    to a percentage of its 2003 value. Based on this new information, your
    team leader asks you to draw a chart of the average price per
    powerboat. What would you predict for the overall trend in prices?

    Question 2D: (Read aloud) Your team holds a brainstorming session to


    discuss what factors could be driving this increase in average purchase
    prices in the industry. What ideas would you offer?
    Answer 2D: A number of things could be at play here. Technological
    improvements, higher manufacturing costs, increased luxury focus in
    premium boats. (Did the interviewee structure their answer, or did they

    Case Study: Case 4 Quick boats


    just rattle off what came to mind?) It turns out that larger boats are
    being purchased, leading to the higher revenues.
    Question 3: QuickBoats is considering a plan to unveil a mid-sized
    Cruiser boat next year, priced at $50,000, a $20,000 increas from the
    cost of their current fleet of smaller boats. Their customers are
    extremely brand loyal, and are the most likely base to upgrade to the
    new larger boat. How would you estimate the number of potential
    cruiser customers from QuickBoats existing customer base?
    Answer 3: You need to figure out how many customers are in the
    market for a new boat. This means you need to factor in the length of
    boat ownership and the life of a boat. Boat owners will increasingly
    become interested in a new boat as their current boat ages. You also
    need to identify what type of boat they are going to buy.
    Customer survey results show the following trend of current owners
    planning to purchase a new boat, which has a lifetime of ten years.
    What is the net sales gain for the cruiser in its first year. Should
    QuickBoats pursue this option? Weve already figured out that 1500
    boat owners are interested in purchasing a new boat next year. Explore
    the following table that shows the results of our survey of customers
    already interested in buying a new boat.
    Will Purchase Mid Undecided
    Percentage of
    Customers
    interested in a
    new boat.
    If offered Cruiser
    option

    20%

    20%

    100% purchase
    Cruiser

    If not offered
    Cruiser option

    100% buy from


    competitor

    50% purchase
    Cruiser, 50%
    purchase small
    40% purchase
    mid size from
    competitor, 60%
    purchase small

    Will Purchase
    Small
    60%

    100% Purchase
    small
    100% purchase
    small.

    Answer 3: will buy = 20% *1500 customers * $50,000 =$15m


    + of undecided = 50% * 300 undecided * $50,000= 7.5m

    Case Study: Case 4 Quick boats


    -

    10% *300 undecided * $30,000 = $0.9m (10% of undecided


    segment who would have purchased a small boat instead if
    the cruiser were not available.
    = $21.6m

    Question 4: The CEO of QuickBoats stops you in the hall as youre


    heading to the loo, and wants to know: Should QuickBoats offer a
    cruiser?

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