Need consultation for strategy boat developing

Discussion in 'Fiberglass and Composite Boat Building' started by Nickname123, Sep 8, 2016.

  1. Nickname123
    Joined: Aug 2014
    Posts: 25
    Likes: 0, Points: 1, Legacy Rep: 10
    Location: Viet Nam

    Nickname123 Junior Member

    Hello all,

    We are a composite boatbuilding factory in Viet Nam. Our strength in this field is manufacture Kayak, Canoe and some small speedboats. But now, in my observation, the market for these products in Viet Nam is quite small and there are some other companies operate in this field like us.

    So, I would like to find another developments/innovation for speedboats or something related to Composite material. I think our products must be different and more better in the future.

    Therefore, could you please tell me what can I do for now? Finding customers at the moment is quite difficult for us because we have just start our business about 1 year.

    Hope to received any support comment.

    Thank you very much.
     
  2. Skyak
    Joined: Jul 2012
    Posts: 1,194
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    Location: United States

    Skyak Senior Member

    Nick...
    that is not much to go on. All you have told us are things we would expect.
    Composites production has low cost of entry, so the local market would logically saturate and shake out weak producers.

    1) There are lots of boat designers on these forums that might provide an exciting product design. The challenges are
    -trust, your country has no reputation for protecting intellectual property and less for foreigners property rights. Why would a designer believe he will be paid for his contribution?
    -local market knowledge -you are there and should know better

    2) You could produce for export if your costs are sufficiently lower than those in the end market.
    -trust is again an issue but for completely different reasons -quality concerns and the large inventory in transit.
    -shipping and import/export costs. A higher volume and smaller parts are better

    In either case you need to communicate your "core competency". What do you provide that is better than anyone else? With that established you need to lower the risk for the customer/investor.
     
  3. Nickname123
    Joined: Aug 2014
    Posts: 25
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    Location: Viet Nam

    Nickname123 Junior Member

    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.
     
  4. Alik
    Joined: Jul 2003
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    Location: Thailand

    Alik Senior Member

    Dealing with builder in Vietnam, we found they were aimed at getting demo/technical information from us and placing on their website, for free. They even placed photos (taken from our website) of sistership build by other builders, of course without any reference...

    So what's the point? Study he market and buy/order the designs. Yes, this is an investment for the builder. But the time spent by designer to develop his designs is an investment as well, and he won't do it for free for unknown builder without reputation.
     
  5. Skyak
    Joined: Jul 2012
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    Location: United States

    Skyak Senior Member

    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.
     
  6. Nickname123
    Joined: Aug 2014
    Posts: 25
    Likes: 0, Points: 1, Legacy Rep: 10
    Location: Viet Nam

    Nickname123 Junior Member

    Hello Alik,

    Thank you very much for your comments.

    I was busy in last week so I didn't have time to log in. Sorry for my late reply.

    1) I don't know which company that you worked with in the past but this is probably an unfortunate accident. If you don't mind, could you please give me some evidence about the company which you are talking (you can send via my email or just let me know the name of that company)? Because I am a Vietnamese, I was really upset when I read your comment about that although still know this could happen in the business environment. If there are some Viet Nam company do it with you, I apologize on their behalf.

    2) I never want to let everybody work free for my company and I also never talk about that. The company where I am working is a Norwegian company and my boss have enough money to buy a design (the price should be reasonable). I have just done the research about what type of speedboat we need to develop for Viet Nam market and waiting a reply from management.
    I think it would be good If we can buy a potential design from oversea to create a typical feature for our boat.

    Hope to received more comments from you.

    Thank you very much.
     
    Last edited: Sep 21, 2016
  7. Nickname123
    Joined: Aug 2014
    Posts: 25
    Likes: 0, Points: 1, Legacy Rep: 10
    Location: Viet Nam

    Nickname123 Junior Member

    Hello Skyak,

    Sorr for my late reply,

    I really don't know how to thank you about the knowledge you bring to me.

    Based on your comments, I went to some place to research one more time and I get many useful informations. I have jusst done a report about the product we should focus to.

    There are two things I'm worried about: The first thing is the design for our speedboat and the second thing is our sell price. I really want to combine the foreign beautiful design with tastes of Vietnamese. It is both a strikingly modern, but also not to lose the identity of Vietnam.

    I am reviewing all procedures of production. I hope I can find something to change to reduce costs price.

    Thank you very much for your help, Skyak.

    I hope I will receive more comments from you.
     
  8. Petros
    Joined: Oct 2007
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    Location: Arlington, WA-USA

    Petros Senior Member

    I have been following this thread and have a few comments for you to consider. If you are a smaller manufacturer that must compete with much larger companies, you can make a better profit by not trying to make your product cheaper, but better quality for the same or only slightly more cost.

    That is a big advanage for a small producer, develop a reputation based on quality and design, rather than trying to make it cheaper than the large manufacturer. And also to be more responsive to your customer's wants and needs. large companies can not compete with that, it is too much trouble for them.

    If you can make a top of the line product, as good as made in Europe or the USA, but a very comparative price (though still higher than the cheaply made entry level mass produced kayaks), you will quickly develop a reputation for quality.

    Of course the trust issue is another problem you will have to prove. You must earn trust, which will take time, but it would not just benefit your company, but also perhaps improve the reputation of all manufacturing in Vietnam as well. Customers will quickly learn that dishonest dealing with a foreign supplier/manufacturer it is not something that comes with the country, but with the individual reputation of the manufacturer. The untrustworthy companies will not survive long term once customers learn who they can trust, and who they can not.

    I can tell you being familiar with the kayak business in the USA, that individual kayaks can be bought new at retail for as little as $400 (cheap plastic rotation molded, heavy, slow and usually poor design), and for as much as $5000 for specialty made exotic composite performance designs. There would be an excellent market for a quality made and designed composite kayak in the $1000-1200 range. The entry level buyer for only a little more money could get a much better quality sea kayak than a "tupper ware" plastic heavy and slow kayak.

    That would be a price point I think many outdoor retailers would consider trying, to offer their customers something between the cheap plastic kayaks, and the $2000-3000 composite performance kayaks. Sales would be slow, but if you deliver what you promise, your market share and reputation will grow along with your sales.

    Good luck
     
  9. Kailani
    Joined: Apr 2013
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    Location: Hawaii

    Kailani Senior Member

    What size speedboat do you build now?

    Approximately how many have you sold?
     
  10. Nickname123
    Joined: Aug 2014
    Posts: 25
    Likes: 0, Points: 1, Legacy Rep: 10
    Location: Viet Nam

    Nickname123 Junior Member

    Hello Petros,

    Thank you for your comment.

    Yes, we are a small manufacturer. We are trying to supply our potential customers a good quality products with reasonable price. But in Vietnam market, we get some challenges:

    - About outdoor products such as Kayaks, Canoe, SUP board: It seem like this wouldn't be the best time to introduce outdoor products. Most of potential customers don't know how to use sit in Kayaks, they prefer sit on top plastic Kayaks from China rather than our products. About quality, I do not think they have given this very serious matter enough of their attention So, most of our products produced are exported to Norway but for now, EUROPE market are in difficult condition so we just export with limited quantity.

    - About small size speedboats (under 5m length): This is the most difficult business side for us. It's quite rare people want to buy a family speedboat like this.

    - About medium size speedboat (7m-9m in length): Some tourist companies buy it to serve their business. This market is very large.

    Based on these informations I shared, I think I should do something to improve our reputation.

    Thank you very much for your sharing.

    Hope to received more comments from you.
     
  11. Nickname123
    Joined: Aug 2014
    Posts: 25
    Likes: 0, Points: 1, Legacy Rep: 10
    Location: Viet Nam

    Nickname123 Junior Member

    Hello Kailani,

    Thank you for your comment,

    - The maximum size of speedboat we are manufacturing is 12m in length and 3.5m in width.

    - From the time we start business, we sent to Norway about 100 Kayaks, Canoes and 30 small size speedboat (under 5m). But for now, the Norway market is quiet. We need to find new products for new markets.

    Hope to received your more comments.

    Thank you.
     
  12. LightMedium
    Joined: Nov 2016
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    Location: Columbus, OH USA

    LightMedium New Member

    Pivot?

    If you can somehow make a top quality composite kayak for $1500USD or less, people here will probably buy them on eBay and Amazon. But then you have to put that boat on a bigger boat and paddle a long way to get it here.

    So here's a crazy thought. Depending on your current process and your access to materials, this could be more of an impossible leap than a simple pivot – but what if you made interior and exterior trim pieces for cars? It's a vanity market in the auto industry, but there are a LOT of people willing to throw $100-500 into customizing the interiors of their cars. Check out the US versions of the Ford Focus, Honda Civic, and Subaru Impreza - the little plastic bits around the dashboard, console, grill, engine covers, whatever that plastic thing is that runs along below the doors. These are all cosmetic things that people want to personalize, and I suggest those three cars because they are most often customized in the US (from my casual observation - definitely do your own research on that). You could also do light weight hoods in carbon fiber and kevlar which, unlike trim, would need to be structurally sound. Choose a few parts - start with the decorative pieces that are most visible in the car and make some high quality molds - definitely need to have top-quality appearance to be successful in this market. Produce the parts in carbon fiber, specialty fabrics, etc, as direct replacements for the OEM parts. Be competitive on your pricing, and people will buy them like crazy on eBay and Amazon. Your profit margins will be higher than with boats once you get past design and tooling, especially if labor cost is a proportionately smaller factor for you. Your shipping logistics get a whole lot simpler and less expensive, too.
     
    Nickname123 likes this.
  13. mydauphin
    Joined: Apr 2007
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    Location: Florida

    mydauphin Senior Member

    I would buy then if... the price is great, quality good, shipping is reasonable. Quality control has to be consistent and intune with price. Do you have pictures and pricing? There are many ways to do deals, I would do a white box private label program and sell them on alibaba. But you have to right marketing plan in place. Don't talk to boat designers, talk to marketing people. Marketing people make lousy boats, boat designers don'the know how to sell them.
     
    Nickname123 likes this.
  14. Nickname123
    Joined: Aug 2014
    Posts: 25
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    Location: Viet Nam

    Nickname123 Junior Member

    Hello LightMedium,

    Thank you very much for your reply.

    Now, we are producing some type of sea Kayak, Fishing Kayak, Child Kayak and SUP board also. Our price is more lower than the price in US or EUROPE. But we don't know how to touch the US market and EUROPE market.

    Hope to receive your reply.

    Thanks.
     

  15. Nickname123
    Joined: Aug 2014
    Posts: 25
    Likes: 0, Points: 1, Legacy Rep: 10
    Location: Viet Nam

    Nickname123 Junior Member

    Hello Mydauphin,

    Thank you very much for your reply,

    I have many pics and price also, do you have any email so I can send it for you?

    Hope to receive your feedback.

    Thanks.
     
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