OzCo Boats Case Study

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OzCo Boats Case Study. OzCo Boats is a family-owned boat building business based in Coffs Harbour, New South Wales. Operating since1961, OzCo designs and builds high quality, small- sized, luxury boats that are made in traditional hand-built ways from traditional materials. Until now the business has prospered and it has built up strong reserves of cash. OzCo sell their boats to boat-yards and also direct to consumers in Australia. However, the Australian domestic market is shrinking and more and more substitutes are becoming available.
In contrast, there is fast market growth overseas where trading partners are available but, despite being the category market leader in Australia, OzCo has no experience in overseas markets. OzCo has always relied on traditional methods and materials to build its boats; this was fine in the 1960s, 70s and 80s but in recent decades there has been a move to newer and more efficient technologies both in materials and manufacturing processes. With no new models for decades, OzCo has a portfolio of products in decline In the Australian market.
More worryingly, much of OzCo’s manufacturing technology is outdated and the CEO has told OzCo’s staff recently that ‘there is about to be Australian government legislation to restrict the use of some of our boat types.’ Despite having experienced and industry –respected staff, OzCo will not be able to make the technology changes fast enough before their current products become ‘illegal’ in Australia. This is not just affecting OzCo: other traditional boat-builders in Australia face possible ruin too.
Indeed, some of the larger and more technologically advanced boat-builders are now looking to buy out their smaller competitors such as OzCo in order to acquire their market share, liquidate their assets and then close them down. Because of all of this, OzCo’s employees have low morale and significant staff departures are a risk (that is, OzCo’s best employees are likely to leave for other jobs if things don’t improve) . On the brighter side, overseas governments place fewer restrictions on the use of traditional boats and OzCo’s current products will be legal there for many years to come. More than this, the growing economies of emerging nations are generating wealthy consumers who have a passion for luxury products.
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