Deep recessions have a way of reordering the status quo. New business models emerge, and companies that are able to adapt quickly to changing conditions typically do better than those that can’t. Be it a large public company or smaller private ones, those able to capitalize on the opportunities that down markets invariably offer emerge as the new market leaders.
On the flip side, a few perennial frontrunners sometimes pull up lame. Call it creative destruction.
Maritime Marine Group LLC of Augusta, Maine, is an example of a company that has been able to take advantage of several opportunities during the last few lean years to diversify and strengthen its holdings in the recreational boating market.
The marine group was formed about five years ago by the principals of the Kenway Corp., a large commercial fiberglass and composites fabricator that bought Maritime Skiff Inc. in 2007, just before the economic downturn. It has since added Southport Boats and Bristol Harbor Boats, and has become a partner in the new Front Street Shipyard in Belfast, Maine.
“In each case, [the opportunity] was too good to pass up,” says Ian Kopp, vice president and general manager of Kenway Corp. and president and chief operating officer of the marine group. “Diversification,” Kopp told me recently, “is really the new business model. And it can take on many forms in the marine industry.”
Although he has no current plans for further acquisitions, Kopp says it’s characteristic of the company to always be listening and looking for strategic opportunities to strengthen the broad-based core manufacturing the company is involved in.
“We’re not afraid to take risks — calculated risks,” Kopp told Trade Only this month. You’ll find an in-depth interview with Kopp in the March issue of Soundings Trade Only written by associate editor Beth Rosenberg.
Kopp says marine companies need to be managing for long-term growth rather than just a short-term rebound.
“The old model of manufacturing and the relationship between manufacturers and dealers and the consumer is broken, and moving forward it needs to be looked at as much more of a partnership among those folks rather than a top-down business model,” Kopp says.
He adds, “I think … a new [model] is evolving that is much more collaborative. It’s much more of a partnership. Whether it’s collaborating on financing, marketing, advertising, boat shows — as resources are pooled together rather than duplicated, I think that is far more effective.”
Kopp says the industry’s troubles going into the recession were made worse by some manufacturers trying to force dealers to overextend themselves in order to keep production lines going. Going into the Miami International Boat Show, Kopp is optimistic. He says there have been positive signs at other winter shows leading up to this one.
“I think it will be challenging, but I think there will be managed growth,” he says.
Here is a bit of perspective on the mess in Greece from Randy Bateman, chief investment officer of Huntington Asset Advisors.
“The Greek situation is very unique in the fact that the population of Greece is less than Los Angeles,” Bateman said in an interview on CNBC’s “Squawk Box” morning business show. “And the GDP of Greece is less than that of Philadelphia. Now if Philadelphia was to default, I don’t think the world would go into the panic it’s going into with regard to Greece. If you look at world GDP since 2000 all the way through 2011, it’s a parabolic move upwards.
“There was no adjustment for 2008 even though Japan, the United States, England and Europe went through the worst recession they’ve had since the Great Depression. There was no blip, and it’s because the world growth is taking place now in those emerging nations, and we need to find a way to take advantage of that. Either to sell to them things that we produce very well in the competitive advantage scenario or find those companies that are going to do well in their own domestic economies.”