Three Ways Boating Manufacturers Can Thrive in a Competitive Market

Article

September 5, 2024

After the demand boom during the COVID-19 pandemic, U.S. new recreational boat sales have trended downward, with a 9.1% year-over-year decline in new boat sales. This shift is due to a variety of factors, including changes in consumer confidence, dealer hesitancy to inventory current boats, shifts in technology and the rising popularity of subscription ownership models.

The marine industry has not been immune to a fluctuating market with high interest rates and inflation. However, manufacturers can still find ways to differentiate themselves and boost sales. Our Strategy & Transformation team has identified three key changes that can help boost business:

Launching new boat models to maintain product portfolio vitality
Innovating go-to-market to differentiate and win demand
Increasing operational & manufacturing efficiency

1. Launching New Boat Models

New boats sell, even in weak retail and wholesale demand markets. And yet, it can be a challenge to fund research and development (R&D) and new product introduction (NPI) when business results are down. The R&D Tax Credit was specifically designed as a federal incentive to offer businesses the opportunity to save money while promoting innovation in the design and development of products and services. The R&D tax credit generally provides a dollar-for-dollar reduction of income tax liabilities for most companies.

In the marine manufacturing industry, this tax credit may be utilized for designing, constructing and testing prototypes or pilot models. Your business may also qualify for an R&D tax credit for the development of new construction or processing techniques to improve reliability in the manufacturing process. Investing in research and development can also help manufacturers better adjust to shifts in boating technology and product plans, such as the rising popularity of outboard propulsion systems versus stern drives.

Our professionals provide a systematic approach to assessing the potential for R&D tax credit benefits and then claiming your credit. Along with providing a comprehensive analysis, we assist with mapping out a plan to implement your research credit study. When you’re ready to launch a new boat model, our team can then work will you to develop an NPI strategy to ensure you bring your new product to market successfully.

2. Innovating Go-To-Market Innovation To Differentiate and Win Demand

Go-to-market (GTM) innovation is critical to drive demand and differentiate your business from competitors. Our professionals can assist with evaluating and rethinking your dealer strategy and developing an actionable blueprint to align market coverage, win mindshare and improve competency of your dealers.

As dealers navigate consumer hesitancy and shrinking profit margins due to discounting levels, having a strategic plan is critical to strengthen dealer relations. Successful GTM innovation can also work to drive demand through current, and potentially new, dealer partners. Our services include:

“Voice of Dealer” Diagnostic Assessment
Marketing & Sales Processes and Playbooks Redesign
Go-to-Market Innovation Concept Development
Digital GTM Strategy
In-Market Testing & Refinement
Launch Planning
Launch Scaling

Boat rental subscription clubs and fractional ownership models have, understandably, made a dent in new boat sales as consumers look to reduce the upfront and maintenance costs of outright ownership. This is evident in the increasing popularity of the Brunswick-owned Freedom Boat Club chain, which now has more than 400 locations across the United States, Europe, Canada and Australia.

Cherry Bekaert’s growth strategy and innovation consultants can also help your company navigate alternative ownership trends and develop a GTM growth plan that drives demand through this disruptive route-to-market.

3. Increasing Manufacturing Efficiency

Now is the time to improve efficiency in your operational and manufacturing environment. With lower production volumes challenging operating leverage on fixed assets, it is critical to optimize operational efficiency. This can be done by streamlining your operating model and utilizing technologies like artificial intelligence (AI) and enterprise resource planning (ERP) systems in your manufacturing processes.

Our Strategy & Transformation team works closely with our Digital Advisory practice to jumpstart digital strategy and transformation for better workflows that empower employees and integrate digital innovations. By utilizing automation tools your business can build better boats faster so you can outperform competitors and drive demand.

A comprehensive ERP system can also streamline operations and optimize a variety of manufacturing functions, including:

Scheduling Production
Tracking Costs
Controlling Inventory
Managing Customer Relations

Cherry Bekaert is equipped to help you develop a digital transformation plan that produces tangible outcomes and optimizes your production process. Our professionals have extensive experience in outlining growth strategies and implementing the necessary tools and technologies to meet your objectives.

Your Guide Forward

Our professionals understand the challenges businesses face in today’s ever-changing market and we are ready to help unlock your business potential with insightful growth strategies. As the industrial manufacturing industry continues to face numerous complexities and challenges, Cherry Bekaert’s Strategy & Transformation team can help your business challenge market norms to remain competitive and relevant. Our consultants offer critical thinking and cross-industry insights to create sustainable, profitable growth. Contact us to learn more about how Cherry Bekaert can assist your manufacturing business to adapt in changing economic conditions.