What strategy does Regal use to stay competitive?
As it was mentioned before, the life cycle of a Regal Marine boat is 3 to 5 years, which is rather a short period for a product. The tendency to shortening product cycles is common for all highly competitive industries. Thus, to develop and to remain competitive, Regal Marine needs to be flexible, should create new boat ideas and designs quickly, and should also quickly implement them, in order to get market advantage.
During the introduction stage, the product is being developed, tested and introduced to the market. In this period, Regal Marine has negative cash flows from this product, as well as in the beginning of the growth stage. The purpose of the company staff is to minimize design, construction and introduction period, in order to maximize profits in the maturity and decline stage (Heizer & Render, 1996). This is why Regal Marine pays so much attention to innovations and customer preferences.
A successful decision of Regal Marine was to involve suppliers into the design drafting process. Due to contacting suppliers at this stage, Regal Marine gains a lot of valuable time on communications and draft improvements. The use of CAD systems by Regal Marine engineers allows to deliver the geometry of the new boat, its dimensions and parameters basing only on a rough sketch of a designer. Due to neatly optimized design and development process, Regal Marine gets competitive advantage since it is quickly adjusting to the customers’ tastes and preferences, and react to market changes at once.