Since we know, that the boat segment is shrinking and Deep Water is not going to enter new markets for this type of products, an assumption can be made that the number of sold boats in the next year could be (best case, since no COVID19) the same as in 2020 if no additional significant changes introduced. However, this segment should not be a priority for the company. Sales of yachts will remain the same in the next year for already existing (forecast). For these two revenue streams different improvement levers are to be developed, starting with:
Improvement of quality of the boats, e.g. implementation of sales pre-check & additional quality loops for boats, which should be less expensive than post-delivery repairs. Costs for additional quality measures 2K € per boat
Intensifying of sales activities by an internal salesperson through additional financial motivation: e.g. commissions for every sold product comparable to the external distributors. Since Deep Water does not have to bear additional administrative costs, we could assume that compensation of 10% for every sold boat/yacht for a salesperson would be a good estimation. This improvement would help the company to increase its ratio of internal/external sales to 4:6 already in the first year. Additional measures such as training for salespersons, strengthening of collaboration between Sales and R&D departments would lead to even better results achieved by internal Sales
Market entry in Brunei and Malaysia, since numbers are already known, and Deep Water could potentially achieve a better competitive position in these two countries. Additional market entry costs (CAPEX) would be 4M €. We should also bear in mind, that in the first year Deep Water would be able to sell its yachts only via an external distributors network
Overall restructuring of the company, aiming at
cost reduction (e.g. in R&D where design ideas can be copied or re-used for new yachts and boats more actively, or manufacturing, where potential outsourcing could be an option)
review of product portfolio and strategic focus (more yachts and/or types of yachts, while developing of USP to differentiate the company from the competitions)
However, we have to consider that such significant changes such as reduction of R&D costs or manufacturing costs as well as the introduction of new USPs can not be achieved during a short period of time and should be considered as mid- or long-term improvement levers
In the last step, a candidate should calculate profitability for the year 2021 and summarize the case results.