Brunswick Corp. is on the path to fundamentally changing what traditionally has been a cottage industry, chairman and CEO Dustan McCoy told a group of institutional investors Tuesday at the Raymond James & Associates conference in Orlando, Fla.
"We are very much about changing the marine game," he said. "We believe we are the only people in the entire world with the size and capabilities to do it."
Focusing his presentation almost entirely on the marine industry, McCoy said Brunswick was working toward improving product quality and performance, manufacturing efficiencies, dealer relations, distribution systems and access to the water.
The key to improving product quality and performance, as well as customer satisfaction, is to better integrate the various systems in a boat, McCoy said. Today, Brunswick and other boatbuilders typically buy components based on price and appearance, but do not design, specify or engineer those components to be fully integrated. Also, customers often have to fill out as many as 16 or 18 warranty cards for one boat to cover all the components made by different manufacturers.
"We've now got to integrate the entire product," he said. "The little, simple things like this need to get done in this industry."
He said the company's Brunswick New Technology division would allow the boatbuilder to integrate the various electronics systems and other components.
McCoy also spoke of Brunswick's goal to continue to "fill the white spaces" of its product offerings. This means having the brands and products needed to give dealers one-stop shopping with one OEM. Aside from a lack of products in the tow sports segment, he said Brunswick was "fundamentally done" in its acquisition strategy in the United States, and would now use this same approach in other markets.
As for distribution, he said the network "needs to undergo substantial changes in the United States." McCoy said this would require improving dealer relationships by offering long-term agreements with dealers who promise to take on a large protective territory, be exclusively Brunswick, reinvest in their businesses, and be certified.
"In return we will bring to them a value proposition that no one else can offer," he said, citing dealer management systems and benefit plans for the dealers and their employees as examples.
Finally, McCoy said the industry's survival depends on marina investment. Brunswick began looking at this issue two years ago and, along with MarineMax, recently purchased Great American Marine just outside St. Petersburg, Fla. The deal allows Brunswick to set aside 95 slips exclusively for its own dealers and their Brunswick boat customers.
"This is a model we will continue to roll out throughout the United States," he said. "People need a place to leave a boat; they need to have their boats serviced. I think this may be the biggest issue the industry faces."
Summing up his presentation, McCoy said, "We've always been the biggest. Now we're working very hard in order to be the best. We believe if we can be the best we'll in fact transform an industry. We'll continue to drive top-line growth through innovation technology and global expansion, and we'll drive earnings growth through cost efficiencies, global sourcing and low-cost manufacturing."
