Swot Analysis Of Boat Building Industry

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Market overview

The boat building industry is still in its growth stage of the industry life cycle with new competitors and new models entering the industry. There is a continued demand for better, bigger, and more luxurious boats due to growing customer base of wealthy clients. Merbatty is offering luxury goods and it is very much subject to global changes in demand. Therefore, if another global recession happens, there would be a fall in demand for luxury goods and Merbatty would be affected.
New markets are mature for expansions. The emerging economies of China and India have good potential as the number of wealthy individuals increased. China, in particular, has becomes one of the biggest manufacturing countries in the world. It has the ability to be a real threat to the traditional boat building companies. As such, Merbatty which operates in other countries, including Europe has high labour costs compared to China which has low labour cost. China also has building plans that will significantly expand the available marina space. Therefore, Merbatty may become uncompetitive in price. The Middle East is also a key market and Merbatty’s future growth relies on this very much. One of the examples is Dubai, it is undergoing immense expansion and building works including a significant amount of new mooring space. This is probably the reason that the proposal to open a third boat facility in Surania had been approved by the Board.
Besides, Merbatty is operating in a competitive market. Hence, it has to ensure that its prices are competitive against similar models by its competitors. Merbatty also needs to offer its products in a competitive way, which may expose it to loss of revenue due to currency changes. Currency changes have r...

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...lling price of Merbatty’s boats. The designs of the boat come from Aqua Design. The problem lies here is that Aqua Designs operates throughout Europe and the USA, but it does not have operations in the Middle East. Hence, it declined all requests from Merbatty to provide the same interior design service for Merbatty’s new Suranian boat building facility. Merbatty need to find alternative supplier of design service with similar standard in order to safeguard the customers. Customers’ loyalty is uncertain. This is because the demand in luxury goods nowadays is different. It is inelastic for potential wealthy customers as they do not mind paying extra for what they desire. They might switch to competitors to look for what they want if the price does not vary significantly. Hence, the key point to retain customer is to build a boat that satisfy customers’ expectation.

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