Hello Skyak,
Thank you very much for your reply.
1) I see your point. We can buy a potential design from a designer but:
- We not sure whether customer will buy it or not.
- Local market here, they need a boat for loading tourists and served in island tourism. The boat need to be nice, cheap and safety.
We get some problems here:
- The potential customers don't want to work with a new factory like us. They want to work with traditional partners more than us.
- The other factories who have many years of experience more than us decreased sell price that we can't decrease anymore. Indeed, we are very difficult to compete with them by price. And about product's quality for future, I do not think customers have given this very serious matter enough of their attention.
2) Yes, we are really want to export our products oversea, but it seems like quite difficult to find a retailer or investor in another countries.
The our "core competency" maybe are: low labour cost (with another countries) and same quality with EUROPE products. We are a company with 100% capital of Norway. Indees, I really want to cooperate with a foreign partner.
Hope to received your supprot comments.
Thank you very much.
This is a hard conversation. If the all the largest producers are cutting price down to your break even, that indicates to me the local industry is going into "consolidation". That is a nice word for the strong starving out the weak when there is not enough demand for all the players. Customers wanting to stick with the big producers is another indicator -they may be recognizing that only a few will survive. Consolidation continues until supply is balanced with demand, the remaining producers raise prices and their customers feel they are not getting as good a deal as they should so they are willing to buy from new sources.
As I said this is not pleasant even to talk about. Navigating this difficult time takes bold actions... and I am just some text from a guy on the other side of the planet. So I should say that all I am telling you is classic text book business strategy -not experience in your industry or even your country.
Recommendations:
1.
Know your business -you need to know your cost structure and the cost structure of your competition. Do they have lower cost of materials? Do they have higher productivity due to better processes? Do they have lower finance cost or lower fixed costs?
You will need to know this for both domestic competition and competition for export business. Before a foreign company places an order, they are going to want to know that there isn't a better partner down the street when they already traveled half way around the world.
2.
Know your customer -In your description above you are producing boats as capital -purchased by businesses to make a profit. This is very different from making boats for consumers personal use. You should know your customers business too. What are their major costs, where do they get their customers, how do they use your product? Is the consolidation of your industry caused by a slowdown in their business? Is there an alternative to your product that is more profitable for them? For example, are new boats being made out of aluminum rather than composites? I read a story the other day about China dumping aluminum on the US market. The US government put on a tariff to stop it so a big government backed producer put a puppet company in Mexico to hide the source of the aluminum. They got busted, so now they moved the Mexican operations to Vietnam. Same game, different country.
You need to know how your product affects customer profits. You also need to know how the purchasing decision is made. Everything above addresses the economic factors -you also need to know if there are non-economic factors -corruption, nepotism....
All of this information about how money flows to your customer and through to you or your competitors will be critical for strategy. Smaller competitors can win in consolidation, but it is always because they were willing to do what the large would not or could not.
About core competency and export -you need to communicate your capabilities to potential customers -past successful products, capacity, technical capability (mold making?, finishing, special processes and materials...) business processes, quality control... all of this will most likely be put on the internet. Some info may be strategic but as a small player most of it is already known by your competition but not all potential customers. BTW your competitors web presence is a great place to start your research.
About design, new customers and trust -you are headed into lean times where you live or dye by cash flow. Large payments long ahead of deliveries are big tests of trust in new relationships. They can be minimized. "you get paid when I get paid" is reasonable. Payment for what you need with product you produce is a great idea -making customers out of suppliers.
There is a guy in AUS on these forms that is looking to get into building large catamarans. Before you posted I advised him to rethink his plan because there are lower cost producers like you. I am going to suggest this thread to him. He is harmless and it would be interesting to compare your costs to his local estimates. Making little things that ship cheaply is one possibility, making big things that are ships is another possibility.
