Weathering the global financial crisis 2008-2011: Successful business strategies for the New Zealand boat building export industry

Abstract

The export boat building sector is predominantly focused on the construction of custom and semi-custom projects with individual customers. It is a very volatile market characterised by a high level of complexity and low margins for the builders.

The boat building industry is not geographically constrained so is bound by the market forces of the global economy particularly the national economies of the clients which have traditionally been the USA and Europe.

The industry is characterised by a large number of family owned businesses run by people who have been drawn to the industry by a passion for the sea and previous boating experience, but often with limited business management knowledge.

The scope of this research was to establish what factors influenced the business strategies of selected boat building companies to enable them to survive the recessionary period of 2008-2011. The emphasis was on how the style of leadership influenced the business and what adapative behaviours were evident.

Case studies were carried out with two selected black boat and two white boat exporters along with the industry body. Semi structured narrative interviews were conducted with the leaders. The insights from the industry body were sought to counter any individual company bias. These were evaluated within an interpretive analytical framework.

Despite all the businesses being led by quite diverse personalities, several key themes emerged from the interviews which were supported by the literature. The single project nature of contracts gives rise to a fluid workflow. This necessitates an emergent business strategy approach allowing flexibility and cumulatively significant decisions being based on subjective judgement calls.

All companies kept a consistent approach to their business policies to be high value rather than low cost producers but were forced to increase their marketing budget. They stayed within their market niche whilst finding another facet within that niche that was more robust during a recessionary period.

Ultimately a combination of strong technical and managerial skills in conjunction with a passion for the industry and their product and a high level of tenacity from the entrepreneurial leaders to work through difficult trading conditions are the hallmarks of New Zealand exporting boat builders surviving the recession.