The firm Johnson-Evinrude Inc (or JE, to keep it short)has been in existence for more than two decades. However it isconfronted by a changing technological and marketenvironment.
While it is well known for the manufacture and sale oftwo stroke boat motors that have enjoyed a positive reputation, itis now facing increasing competition from four stroke boat motors.In terms of market growth the highest growth rates are beingexperienced for four stroke-high horse power motors; Johnson istesting motors of this type but their products seem to havemultiple defects. The same type of motors of Japanese brands areflawless. It is true that in traditional two-stroke high horsepower motors Johnson has a high market share –almost 65%, but thistype of motor has almost no growth in the industry as awhole.
In the low horse power, 2 stroke market Johnsons shareis minor and in the industry it is low horse power four strokemotors that have a rapidly growing market. JE do not have any oftheir own products in this category. Many Chinese manufacturersmake these as generic unbranded products and the Chinese productsare of low cost and good quality
JE has also been marketing trolling electric motors. TheJE design is very well regarded in industry and with fishinggaining popularity as a sport trolling motors is a growth area.However, Johnson’s share is not as high as it could be because ofinexpensive Chinese substitutes. While the Chinese products takeadvantage of lower manufacturing costs they lack the designsophistication of JE products.
Questions: Discuss the above from the perspective of:
1. Product portfolio management (the BCG or Growth ShareMatrix approach)-for this classify the different types of motors interms of the BCG Matrix – Rate of Growth of the Industry and MarketShare of the Firm; Cash Cows, Dogs, Stars, Question Marks; makesure that you do this for every type and category ofmotor.
2. Try to analyze the portfolio/different motorcategories in terms of the diversification or product –marketmatrix
3. Make suggestions for the overall marketing strategyfor JE. You may like to ‘classify’ products (whether current orplanned) and then develop your approach for them.
4. Discuss the possible problems that the company mayface when it decides to divest from certaincategories.
