Re: OMC Cobra conversion to Merc lower - SEI
What you say is 100% right and the way most companies do business. But a company that was truly looking to get "new" customers could have made the effort that SEI has.
Sure Mercuiser thought, "why make a conversion? We'll sell complete transom assemblies and drive to those people." When in actuality what happened is people either scrapped the boats and bought NO Mercruiser products at all, or bought a USED boat, with a Mercruiser drive and converted it themselves. But most people sure didn't buy complete transom assemblies from Mercruiser.
Now, SEI will sell more of the product they make. Good for them.
Yeah, I was gonna type this exact thing. Mercruiser has long thought "why should we make a conversion, everyone will just use our drives"... after all, there's no risk if they don't.. people have no other option except to buy a complete drive from them or volvo (at comparable prices).
Boat manufacturers (and Mercruiser) don't want people to have old boats that work well.... they want boats to be disposable, so people buy new ones, and they make more money (there's a lot of holes in their thinking, but they're living in the past). Never mind the market of people who can't or won't ever buy a new boat, they see that as where the money is.
What SEI has remembered is that serving the customer is a great way to make money and grow your company. Make what people want to buy instead of forcing them to buy what you want to sell and you'll do well.
IBM learned this to their cost when they released the PS/2 series of computers back in the 80s.. they purposely broke compatibility with the "clone PC" makers to try to control the market and raise prices to get the margins they wanted. Almost overnight IBM's market dominance went away and "compatible" computers became the standard. IBM lost Billions and never regained market control (or even significant participation).
That hasn't happened to Mercruiser and may not, but if SEI comes out with a new, sturdy, reliable drive that's cheaper than Merc, it's going to hurt Merc's bottom line in a time when they can't afford the hurt.
And if they can't keep up and sell a better product than the new upstarts despite the fact they have decades of experience more than SEI designing, building and selling sterndrives, they deserve to lose money.
Bond-o said:
Quote:
Mercruiser should have been more flexible a long time ago in adapting their drives to a wider audience, they'd be making a lot more cash now if they had, and we'd all be better off technology wise.
Ayuh,.... I think you're lookin' at this, pretty much askBackwards.....
Why would Merc wanta adapt to anybody's technology, when the entire industry has adapated to Mercruiser,..??
Because A) they'd make more money and B) they'd have less risk.
Having domination of the market lets them make a lot of money without spending much in research and development, and maximizes profits for the least effort. But too much of that and the company becomes complacent, they lose the staff, teams, and mindset that lets them compete with more development oriented companies, and eventually they lose dominance. If your company's whole business is based on market dominance and suddenly you lose it, you're in big trouble, and depending on what you do there may not be enough time to recover.
So Mercruiser should have adapted to other companies' technology long ago if they wanted to stay in business long term. Right now SEI just makes spare parts... but you can bet money they already have more engineers at work than Mercruiser does... once they finish designing spare parts (or alternatively reading/measuring other manufacturers' designs), it's a small change for them to design something new and better.
For Mercruiser, it may take a major shakeup to get back into development.... and they may not have the time.
Erik
PS: Don't forget Mercruiser is a union shop, too. That decreases their agility a lot. They may be required by contract to re-task old employees to fill positions before hiring new. Have you ever tried to re-train a factory worker to be a mechanical engineer?
and are, naturally, completed by the good folks in aftermarket. Like say SEI for instance.
