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b.In addition, any increase in individual income tax rates would negatively affect the Company’s potential customers’ discretionary income and could decrease the demand for its products. (p. 14)
с. This concept is important to Brunswick’s competitive position because they are a manufacturer of recreation products. As a company that relies heavily on retailers buying their products, Brunswick’s profits rely on the retailer’s customers ability to purchase their products. If the government were to increase income tax rates, their potential customer’s discretionary spending could decrease.
This would mean that the demand for recreation products could decrease. Though, this could also work in a positive way; income tax rates were to decrease then customers would have more disposable income to spend on Brunswick’s recreation products. It is important for Brunswick to carefully monitor these changes in tax laws.
b.Demand for the Company’s marine products has been influenced by weak economic conditions, low consumer confidence, high unemployment and increased market volatility worldwide.
c. It is important to understand the economic segment for Brunswick’s competitive position because the Company’s success is dependent on favorable economic conditions. Economic conditions directly affect the Company’s sales, for example, high unemployment rates discourage consumers from purchasing expensive, non essential goods such as boats. The influence of the of the weak economic conditions had adversely affected Brunswick’s financial performance and could continue to do so. If the general economic conditions were to deteriorate it could diminish consumer confidence or discretionary income and further reduce the Company’s sales.
b.The vast majority of the Company’s products are used for recreational purposes, and demand for the Company’s products can be adversely affected by competition from other activities that occupy consumers’ time, including other forms of recreation as well as religious, cultural and community activities. (p. 13)
The sociocultural segment is important to understand in terms of competitive position because Brunswick competes with other recreational products outside of the boating industry. Since Brunswick’s products are used for recreation, which is a social component, the Company needs to monitor the way consumers are spending their leisure time. The Company must compete for consumers’ scarce leisure time and discretionary income. In order for Brunswick to remain competitive in the in the recreation industry and the boating industry, the Company needs to properly rely to consumers that their product is the more suitable choice in both segments.
b.If one of these legacy systems or another of the Company’s key IT systems were to suffer a failure, or if the Company’s IT systems were unable to communicate effectively, this could result in missed or delayed sales, or lost opportunities for cost reduction or efficient cash management. (p. 16)
c.The technology segment does not have a significant impact on the competitive position of Brunswick, but is still important. Technological advances can influence the opportunity for the Company to reduce cost and allow for a better position against the competition. Technology is fast paced and ever-changing, which means it is important for Brunswick to constantly monitor these changes in order to keep up with competition. Though there are no significant technological advances in the manufacturing of boats, but to satisfy consumer needs and stay competitive with others in the industry the Company needs to stay up-to-date with technological advances in boats’ features.
b.Hurricanes and other storms can result in the disruption of the Company’s distribution channel, operations or supply chain. (p. 15)
c.The environmental segment directly affects the competitive position of Brunswick. In terms of logistics and supply chain, unfavorable weather conditions could alter the distribution channel then disrupting business output. This could hurt the Company’s competitive position because as a result prices could increase or there could be delays in fulfillment. In terms of consumer demand, favorable weather conditions have a positive effect on sales. Demand has been found to be stronger just before and during spring and summer, unfavorable weather conditions could reduce demand during these peak selling times. Sales are important to the Company’s position competitively.
b.Additionally, the Company is subject to laws governing its relationship with its employees, including, but not limited to, employee wage, hour and benefit issues, such as pension funding and health care benefits. (p. 14)
c.The legal segment is not significantly impactful to the Company’s competitive position. Changes in the above legislation has potential to increase operation costs. This does not notably affect Brunswick in order to stay competitive. These laws would affect all other entities in the boating industry, therefore not having an outstanding impact on Brunswick alone. It is important to stay compliant and to keep employee morale high in order to reduce turnover costs and have high productivity levels.
b.There are several major manufacturers of pleasure and offshore fishing boats, along with hundreds of smaller manufacturers. (p. 6)
c. This force is important to understanding Brunswick’s competitive position. The industry in which the Company competes is in highly saturated with many alternative companies offering similar products to a similar set of buyer. This level of market saturation makes for steep competition. The level of competition also shape the industry’s profit potential. In order for Brunswick to maintain its world leader position, it must use a variety of moves such as advertising, new offerings, or price cuts to try to outmaneuver the competitors or run the risk of being beat.
b.In addition, international boat builders continue to enter the U.S. market, mainly in the large fiberglass boat segment, thereby adding additional product options into a market where the Company has historically been a market leader. (p. 12)
c.This concept is important in understanding Brunswick’s competitive position. If there are increasing numbers of new entrants into the market, the Company will need to invest more into staying a market leader. The international boat makers are entering the market with little problems, which is saturating the already highly competitive boat making market. The activities needed to maintain the Company’s competitive position will cost the Company considerable money, time, and research. The ease of new entrants into the market may prevent Brunswick from implementing business plans successfully and could decrease the number of sales.
b.Brunswick purchases a wide variety of raw materials from its supplier base, including aluminum, resins, oil and steel, as well as product parts and components, such as engine blocks and boat windshields. (p. 5)
c.Suppliers are important to the competitive position of Brunswick because it affect their costs and profitability. Brunswick is able to have lower costs because they purchase from a variety of different suppliers. This also allows for Brunswick to reduce any delays within their supply chain, which means they are able to manufacture their products in a timely and cost efficient manner. Having a number a suppliers also allows the Company to price their products competitively against other products in the industry. In this situation, Brunswick has greater leverage than the suppliers, which is essential to optimize their competitive position.
b.The Company relies on third-party dealers and distributors to sell the majority of its products, particularly in the marine business. The ability to maintain a reliable network of dealers is essential to the Company’s success. (p. 9)
c.Brunswick sells its products to third-party distributors that then sell to the end user. This means the Company relies on these distributors to buy their products over the competition’s products. In this situation, the buyers have more leverage over Brunswick, which is important for the Company to monitor in order to remain competitive. If there is a decrease in marine product demand, the Company’s profit margins could be negatively affected. In order to remain at a good competitive position, Brunswick need to maintain a reliable network of dealers as to not rely too heavily on one over another.
b.The introduction of lower-priced alternative products by other companies can hurt the Company’s competitive position in all of its businesses. (p. 12)
c.The threat of substitute products had significant influence over the competitive position for the Company. Brunswick is competing for customers with those direct competitors within the industry, but also is competing with other industries focused on recreation that satisfy consumer needs. If the demand for marine products decreases, then Brunswick can lose its customers to lower cost recreation products or services. Likewise, if within the industry, a lower priced product enters and takes more market share, Brunswick will need to take action on retaining customers and market share. Both circumstances could be detrimental for Brunswick’s competitive position, and it is important for the Company to monitor substitute products and meet consumer needs better than the competition.
b.Brunswick has, and continues to obtain, patent rights covering certain features of its products and processes. (p. 6)
c.Brunswick’s strengths are important to understanding their competitive position, because strengths are advantages the Company has over their competition. Strengths are what the Company can draw upon in order to outmaneuver the competition. Strengths are internal factors, within the Company’s control, that are readily available. For example, Brunswick obtains patent rights covering features of its products and processes, which means the competition cannot use that, giving them the competitive advantage. Another example is that Brunswick has facilities in a number of locations to optimize production and distribution, in order to maintain its competitive position. Brunswick can use their strengths to their advantage to retain market share and sales.
An inability to obtain alternate distribution could unfavorably affect the Company’s net sales through reduced market presence. (p. 9)
Weakness are important to understanding Brunswick’s competitive position, because they are internal factors that need improvement. Weakness are what the Company needs to work on in order to better their competitive position. Brunswick relies heavily on distribution channels to sell their products to end-users; if the Company does not have a large market presence then sales will decrease and competitive position will be adversely affected. Weakness are important internal factors for the Company to be aware of and to work at turning them into strengths.
b.The Company believes that its customers rigorously evaluate their suppliers on the basis of product quality along with new product innovation and development capability. (p. 15)
c. When understanding Brunswick’s competitive position, opportunities play an important role. Opportunities are external factors the Company can use to its advantage to gain market share and improve performance levels. Brunswick has noticed the trend that outline what consumers are looking for in products, which is something the Company can capitalize on. By understanding changing consumer needs, Brunswick can develop products that better suit those needs and be more appealing than the competition. Another external factor the Company could take advantage of to improve its competitive position would be the relationships with suppliers.
b.Higher energy and fuel costs result in increases in operating expenses at the Company’s manufacturing facilities and in the cost of shipping products to customers. (p. 12)
c.Threats are important when understanding Brunswick’s competitive position. Threats are external events or trends that can undermine the Company’s performance. The Company would need to invest more into ways to defend against their threats better than the competition. The above statement points out the Brunswick is dependant on fuel and energy costs remaining low in order for the Company to keep their expenses low. This threat can adversely affect the success of Brunswick, but it is also a threat that all companies within the industry will incur and can be affected by. It is important for the Company to keep a close watch on energy and fuel costs in order to keep a good competitive position.
In all of its boat operations, Brunswick competes on the basis of product features, technology, quality, brand strength, dealer service, pricing, performance, value, durability and styling, along with effective promotion and distribution.
In 2015, Brunswick will focus on continuing to drive profitable growth through product leadership resulting from investments in capital projects, research and development programs and strategic acquisitions. (p. 1)
Brunswick has chosen differentiation as their business level competitive strategy. To successfully use a differentiation strategy, Brunswick must convey a message to customers that convinces them to pay a premium price for the Company’s products because they offer unique and desirable features. To create these unique and desirable features, Brunswick will need to invest heavily in research and development. The Company must also invest in building the brand through advertising. By investing in and strengthening their brand, the Company will be able to relay to potential customers the value in these features.
The above statements lay out that the Company is focused on providing a product that stands out against its competition. The two statement states that Brunswick is investing in research and development and using effective promotion and distribution. This supports that Brunswick is using the differentiation strategy because they are competing on uniqueness rather than price.
As the first statement points out, the Company is focused on using effective promotion and us building the strength of their brand. These two tactics are key components to the successful use of the differentiation strategy because they are important when Brunswick tries to communicate value to their potential customers. The first statement also lists out the key components that Brunswick competes on in order to remain a market leader in the boat making industry. This first statement supports the differentiation strategy because Brunswick competes on a number of features that help add value to their products and creates a unique product in comparison to the competition.
The second statement supports that Brunswick is using a differentiation strategy because it states that the Company is investing in research and development to grow profits by being a product leader. To be a product leader, Brunswick has to create a product that has unique features that the competition does not have. As the Company invests in research and development, they will gain more knowledge that will allow them to further enhance their product offerings.
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