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Regarding Malibu, they have been strategically positioned to deliver consistent performance and capitalize on growth in the boat market. They currently classify their operations into three brands, Malibu, Cobalt and Axis, producing more than 30 models of world-class boat. The heritage brand, Malibu, serves the premium performance sport boats segment, accounting for 59% of total revenue. Axis also offers performance sport boats, but it targets the low-price, entry level segment, accounting for 4. 7% of total revenue. Cobalt, a newly acquired brand of Malibu, serves the sterndrive and outboard recreational boats, accounting for 36. 3% of the company’s total revenue.
Through positioning their products as premium, highly innovative and customizable, Malibu has been the market leader in performance sports boat since 2010, and their market share in 2017 was 21. 6%. Meanwhile, their top competitor, MasterCraft, has decreased shares and only own 21. 7% of total market.
Malibu’s marketing strategy focuses heavily on both organic and inorganic growth. First, they build strong national presence through their award-winning website, where customers can walk through different boat configuration options and pick the one they like the most. Since 2015, they have been gaining organic digital audience with number of social interactions goes up to 2. 7 million, which is the largest combined social audience in the social media landscape of the boat industry. Malibu also increases grass roots marketing through sponsoring several specialized water sport events, athlete individuals and teams as well as collaborating at local level with dealers. For example, Malibu’s “Just Ride Tour” is a multi-stop marketing event where Malibu personnel, athletes, dealers and VIP customers participate in regional and local water events.
Second, Malibu strategically strengthen their brand through innovation and product diversity. They partner with several big brand names with engineering capability such as GM Motors, McLaren Engineering and Davinci to design, develop and test their new engines. Malibu invest heavily in engineering with more than 15 first-degreed engineers, in-house R&D department where engineering and manufacturing closely work together during product integration in order to deliver quick, nimble react to customer’s changing preference. As a result, Malibu was capable of launching four new Malibu or Axis models and 30 to 40 new features per year. And they are applying this approach to Cobalt, the newly acquired brand, to quickly dominate the market.
Third, since Malibu sells most of its products through dealers, they focus on maximizing dealer productivity and grow dealer exclusivity. Malibu have a distribution network of more than 350 dealers worldwide, some of which are ranked in Boating Industry’s Top 100 dealers. Malibu has also been channeling their effort in reviewing their geographic coverage to identify opportunities for expansion and improvement of the dealer network.
Last, Malibu aim to grow aggressively through pursuing strategic acquisition and accelerating international expansion. They completed their IPO in 2014 and acquired Cobalt in 2017, which subsequently reset their EBITDA margin to 18. 7%. More recently, Malibu just agreed to acquire the assets of Pursuit Boats to expand their product lines to recreational fishing boat. Internationally, Malibu has 59 international dealer locations in 40 countries for the Malibu/Axis brand and 27 dealer locations in 24 countries for their Cobalt brand. Overall, Malibu has a viable marketing strategy that brings excellent prospect for growth and market dominance. However, we would like to note some potential risks and challenges that Malibu should take into consideration when executing their plan.
First, the market for recreational boats is highly unpredictable since people are having an increasing number of possible options to spend their free time. At the same time, there is a significant increase in consumer preference for used boats. The large fixed costs associated with boat manufacturing and the unpredictable sales might hurt the company’s profitability. Moreover, since Malibu marketing strategy heavily relies on sponsored athletes and events, an unfavored incidence associated with these athletes or events could negatively affect the Malibu’s brand image.
Second, Malibu invest heavily on R&D and innovation. While this gives them a competitive advantage in the market, innovation and category expansion increase cost and manufacturing complexity. Moreover, entry-level consumers with limited knowledge in recreational boats might feel challenged and overwhelmed by the too many hi-tech configurations that they do not understand.
Third, growth through acquisition takes consideration time and large cash expenditure, which might create capacity constraints on a business that is already spending big money on innovation. Forth, Malibu international expansion requires significant managerial attention due to international economic, political and legal factors.
Particularly, they should pay attention to their intellectual property and counterfeit control, difference in exchange rate as well as international tax and transfer pricing policies.
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