University of the East Graduate School of Business R.M.PASTRANA,Ph.

D GROUP NAME/ MEMBERS: Farshad Mahlouji , Parvin Fereidouni, Ashkan Mombeini WRITTEN ANALYSIS OF CASES (WAC) CASE TITLE: Regal Marine I.SITUATION ( Profile, Key Factors, Management Dilemma) Regal Marine or Regal Boats is a family-owned and operated company. It has been involved in the boat making business for over 36 years. They build pleasure boats from 19 to 44 is made up of the small runabouts to the world class Commodore express cruisers. The boats are distributed through dealers and distributors in the business in around 45 countries all around the world. Regal Marine is also a world leader in innovation. It received the industrys IMTEC innovation award for its FasTrac hull design. FasTrac is credited with providing exceptional performance with less horsepower, meaning more efficiency and savings for our customers. Since Regal Marine is a family-owned company, a familys safety is also a concern of the company, which is why they think of the familys safety in their designs. The boats have features which help ensure the safety of the family such as transom trailering lights, full fiberglass liners, deep cockpits and windshield vents. Regal Marine is a frequent user of computer-aided design (CAD). New designs are created through its threedimensional CAD system which the automobile industry also uses. Regal Marine has an ISO 9001:2000 certification. As a globally accepted model for quality system standards, ISO 9001:2000 will accentuate Regal Marines mission by continuing to provide exceptional customer satisfaction. Regal Marine is one of the few boat companies in the world who has achieved this certification. In addition, Regal Marine backs up its products with one of the so-called best warranty packages in the industry. Every Regal boat is backed by a Limited Lifetime Structural Hull Warranty. Regal Marine is one of the largest powerboats in the United States. The mission of the company is mainly to supply luxury performance boats to customers all over the world. Its goal is to provide value and quality of product and satisfaction of the customers. The company aims to do this by using the strategy of differentiation. This strategy is useful by means of differentiating the products through innovation, high quality, and distinct features of the product. Based from these, it means that the companys sales increased therefore, giving due credit to the stated strategy. Due to proper product coordination with the parts that are used for the production of the boat, Regal Marine has created close ties with a large number of its suppliers. With this, the company is ensured to both flexibility and reliable parts. However, with the strong economy and the repeal of the boat luxury tax on its side, it has been paving down debt and increasing market share. With this, Regal is faced with a dilemma. This dilemma is thus concerned with the companys mission. The companys mission is too stagnant, therefore resulting for the status of the company to simply stay at a steady state. SWOT Analysis: External environment: Opportunities:
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Internal environment: Strengths:

Innovation design Selling patents Threats: Economy crisis Competitors Environmental legislation Taxes II.PROBLEM

Unique Innovative Beautiful design Luxury Weaknesses: Price Few customers Long process

In addition, with its mission to provide the customers worldwide with their products, Regal Marine wants to ensure that quality is given more importance. The managers of the company must always have a global view of the operations strategies. Knowing that the standards of global competitiveness are high (quality, customization, convenience, variety, timeliness and cost), the company must improve on its operations. Thus, the group came up with the problem on how the company can maintain their edge among their competitors using strategy of differentiation with the ever-changing demands of the consumers in relation to their mission. III.ALTERNATIVE COURSE/S OF ACTION (OPTIONS/ STRATEGIES/MERITS) The two possible ways for Regal Marine to have a competitive advantage around the world is to lower the cost of production or to continue their strategy of product differentiation. The company is not too concentrated on offering products with very low prices. Lowering the cost of production can give a slight advantage to the company. The group assumes that the customers of Regal Marin are in the A class and upper B. Lowering the cost means lowering the price the company sells the boats, thus attracting more consumers who normally cannot afford to buy a Regal Marine boat, therefore extending their market to lower B, and C class. Also with the lowering of the price of boats, the company can compete with the alternative products that offer families fun and entertainment like home theaters and others. Looking at our decision criteria, the group presented three factors that could affect this solution, to lower the cost of production. It has been mentioned that the first factor is being cost-efficient, which means the money that the customers pay is worth the value that they are going to get. With this, the analysts said that this could be a positive attribute to the company because Regal Marine could produce more boats for its consumers. As what the group has learned from their Finance class, in order to increase sales, one has to increase either the price or the quantity. Then again, with the given solution they can produce more with the low cost of raw materials and with this they can sell their boat at a lower price, thus more customers would buy their products. Another factor is customer satisfaction. This means that the customers would be fulfilled with the goods and services that the company offers. The group thought that this solution (lowering the production cost) would be either a positive or a negative result for the company. It could be positive because the other customers who are coming from the classes B and C would be able to afford such kind of product. On the other hand, the upper class would not be contented because the feeling of sophistication when owning a luxury boat will be diminished. Although lowering the cost might attract new customers, it might also cause the company to go off track from its mission, which is to provide luxury and performance. Lowering the cost might mean looking for new and cheaper suppliers to provide the parts needed for the boat. Thus the group says that the last factor that would affect low cost production is it would change the level of quality the boat ensures. It is both positive and negative again because sometimes cheaper means lower quality. They also have good ties with their suppliers and looking for new suppliers will break those ties.
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The company also has a choice of continuing their current strategy of product differentiation. Differentiation is to distinguish the offerings of the organization in any way that the customer perceives as adding value (Heizer & Render, 2004). This strategy has worked for them through the years, specifically at Orlando, Florida where the company is based. This has allowed them to increase their market shares and slowly pay their debts. This strategy is also in tune with the companys mission of giving luxury and performance. They have also been given awards and distinction for their products that offers quality. The company has worked hard to gain such a reputation and have inspected their products rigorously in more ways than one and it has paid off for them. The companys concentration on giving the best quality and performance has also made the consumers know their products also for giving safety to the family. Going back to the decision criteria, this solution has also been affected by the factors, which are cost-efficient, customer satisfaction and quality. Maintaining its competitive edge through product differentiation would entail a positive or a negative effect on the cost-efficiency of production. It could be positive because the materials used are assured to be of best quality. This is because you greatly invest on the raw materials thus quality of it is well tested. In contrast, this is a negative because its does not necessarily mean that if the materials used were cheap, it directly corresponds to lower quality. Sometimes it is just the name that you are buying and not the quality of the product itself. Then again, this is either positive or negative because one can never tell if the quality is being compensated with the money. Next factor is the customer satisfaction. It is important for the company to value customer satisfaction because knowing what the customers wants and what makes them satisfy will greatly affect the characteristics of the product. In this case, Regal Marine has always kept in touch with their customer so as to respond to the peoples needs and wants. As previously mentioned, one of the solution is to maintain the differentiation strategy. Customer satisfaction would definitely have a positive effect to this strategy because making the product unique would satisfy their customers. This would create satisfaction of the different comforts and luxury that the companys products offer. Also, as said in their mission, they provide the strategy by giving innovations, unique feature and high quality product, which the customers are looking for. Lastly, the quality of the product is also taken into great consideration. Through the strategy of differentiation, the company can enable itself to experiment different ways in making their boats world-class. Differentiation must be thought of as going beyond the boats characteristics to encompass everything about the product that influences the value that the customers derived from it. This strategy would greatly improve the quality of these boats. However, the down side to continuing the strategy of product differentiation is that the product will only be for the people who could afford the boats. Even though they offer boats that can be appealing to the consumers, they might not be able to afford the boats. They would not be able to broaden their target market. Considering that they wanted to attract new market by going international, the company might face some challenges in convincing other people to buy such expensive and luxurious boats. IV.DECISION(OPTIONTAKEN/SOLUTION/RATIONALE/SUPPORTING PRINCIPLES/THEORIES/LAWS/PRECEDENTS) Given these solutions, there are many factors that affect the companys strategies to improve their growth. The group has summarized it into three decision criteria. First is the cost efficiency of the product. This means the price or the value that its customers are paying for. This should guarantee the price that its consumers give is worth with what they will receive. Meaning, the value of the money that they give is proportional to what the product is giving. Second, customer satisfaction is an important factor in these decision criteria because this is where the demands of the consumers come in. The boat should not just serve as a means of transportation but it should also give the satisfying effect of traveling via the companys luxury boat. This includes the basic needs that the
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consumers would want to experience while they are in the boat, like safe and on-time arrivals. Luxurious trip can be added to this aspect because it would not be a means for travel but can also be means for entertainment. Lastly, the quality should not be taken for granted. Quality would ensure better goods and services that the consumers are always looking for. Quality would include the reliability and quickness on how Regal Marine can serve its customers. Whether they lower the cost of not of their production, it should still serve the high quality that they offer. To sum it all up, cost efficient, customer satisfaction, and quality are the influential factors that help the group to come up with their solutions. V.EXECUTION (ACTION PLAN/PROGRAMS/RESOURCES FINANCIAL/HR/TIMELINES) The analysis of both solutions, which are to maintain the companys strategy of differentiation and to lower the production cost, shows the group their advantages and disadvantages. Both solutions in their own are good for companies. They are good for the companies who want to enter the global market because they provide them benefits that would help make the companies grow. However, the situation that Regal Marine is in provided the group with an answer, that is, to maintain the companys strategy of differentiation. The group thinks that the companys differentiation strategy is the best solution for the ever-changing demands of the consumers. As mentioned in the case study, With changing consumer tastes, compounded by material changes and ever improving marine engineering, the design function is under constant pressure. Added to these pressures is the constant issue of cost competitiveness combined with the need to provide good value for customers. Having said this, it is important for the company to know the challenges when dealing with the demands of the consumers. Lowering the production cost cannot resolve this challenge. Lowering the cost of production might hinder the company to develop new products that will suit the consumers tastes. Quality comes with a price and for sure, with their mission, Regal Marine will put quality first in their mind. Knowing the fact that this strategy contributed to the success, this would enable Regal Marine to foresee what the strategy will do for the companys branches in other places. For Regal Marine, no ship leaves a harbor without a destination. And like their boats, the company must be prepared to sail. Although the international market might seem to be a sea of great opportunities, behind the sea also lie challenges and opportunities. Regal Marine must have a good strategy in order to determine the destination so that it can arrive at what it wants to be in the future.