STRATEGY AT REGAL MARINE
Regal Marine, one of the U.S.’s 10 largest power-boat manufacturers, achieves its mission
―providing luxury performance boats to customers’ worldwide―using the strategy of
differentiation. It differentiates its products through constant innovation, unique features, and
high quality. Increasing sales at the Orlando, Florida, family-owned firm suggest that the
strategy is working.
As a quality boat manufacturer, Regal Marine starts with continuous innovation, as reflected in
computer-aided design (CAD), high-quality molds, and close tolerances that are controlled
through both defect charts and rigorous visual inspection. In-hose quality is not enough,
however. Because a product is only as good as the parts put into it, Regal has established close
ties with a large number of its suppliers to ensure both flexibility and perfect parts. With the
help of these suppliers, Regal can profitably produce a product line of 22 boats, ranging from
the $14.000 three-passenger Rush to the $500.000 42 foot Commodore Yacht.
“We build boats”, says VP Tim Kuck, “but we’re really in the ‘fun’ business. Our competition
includes not only 300 other boat, canoe, and yacht manufacturers in our $17 billion industry,
but home theatres, the Internet, and all kinds of alternative family entertainment.” Fortunately
for Regal, with the strong economy and the repeal of the boat luxury tax on its side, it has been
paying down debt and increasing market share.
Regal has also joined with scores of other independent boat makers in the American Boat
Builders Association. Through economies of scale in procurement, Regal is able to navigate
against billion-dollar competitor Brunswick (makers of the Sea Ray and Bay linear brands). The
Global Company Profile featuring Regan Marine provides further background on Regal and its
1. State Regal Marine’s mission in your own words.
2. Identify the strengths, weaknesses, opportunities, and threats that are relevant to the
strategy of Regal Marine.
3. How would you define Regal’s strategy?
4. How would each of the 10 operations management decisions apply to operations
decision making at Regal Marine?
Question 1. State Regal Marine’s mission in your own words.
Answer: The mission of Regal Marine is to provide luxury performance boats to customers
worldwide. There are many dimensions of Regal's mission; Value, Quality and Satisfaction to
our customers, which is critically important and the lifeblood that makes our business run.
Question 2. Identify the strengths, weaknesses, opportunities, and threats that are relevant
to the strategy of Regal Marine.
High quality “Best in Class” goods
Worldwide suppliers to ensure flexibility
Wide product line- 22 models
Reduced cycle time (product development time)
Three dimensional Computer-aided design system (CAD)
Not enough in-house quality
Regal can increase its hold on market by adopting Backward Integration Strategy i.e. by
becoming supplier itself
Increase market size through finding competent and effective dealers in the world
Changing consumer tastes
Copying of CAD system by competitors
New entrants in the industry can put cap on their profits
Virtual experience through Motion Ride technology can strongly affect Regal’s profits because
similar entertainment could be provided through Motion Ride.
Question 3: How would you define Regale’s strategy?
Regal’s Differentiation Strategy:
Regal follows the strategy of differentiation in pursuing its mission, which means making
products that are distinctive and have a high value to customers.
The strategy of differentiation is based on constant innovation, unique features and high
quality. Regal’s strategy regarding its products is very clear, that’s why they come up with ‘best
in class’ products. Regal maintains ‘best in classes by offering distinctive products in a way that
they have unique features and benefits.
The company’s strategy is supported by operations strategy that drives the boat main
manufacturing process. Regal is continuously working on to produce at a lower cost, reducing
cycling time, improving process and using alternative products etc.
The people and the team working here is a key component in accomplishing goals.
Regal has over 120 dealers in US and they ship to 40 different countries. It is critical that the
dealers are of the caliber that they represent Regal’s products in a marketplace.
Question 4. How would each of the 10 operations management decisions apply to operations
decision making at Regal Marine?
10 Operation Management Decisions:
The 10 operation Management decisions are performed at Regal Marine as follows:
1. Goods and service design:
The company produces distinctive boats that adds value and creates satisfaction to customers.
It makes BEST IN CLASS products through continuous innovation which is hard to copy. The
company also issues patents for their products so as to remain best in class for long time.
The products are designed keeping in view the choice of customers and considering supplier’s
suggestions as well. The suppliers are also involved in designing the products. High quality and
unique features are essential components of Regal’s products.
Employees are compensated well because they participate in the success of the business. In
return, integrity and honesty is demanded from them.
At Regal the customers are provided with distinctive, unique featured and quality products.
High quality products are a part of Regal’s differentiation strategy.
Regal is one of the few boat builders in the world to earn ISO 9001:2000 quality certifications.
Regal marine’s quality is driven by customers and consultants to produce best in class product
which means the product must be distinctive and distinctive means offering unique feature and
benefits in the product for which anyone is willing to invest their money in.
3. Process and Capacity Design:
The design function of the company is under constant pressure because company tries to
launch new models frequently and it must contain features no one else had ever seen .Regal is
a frequent user of Computer-Aided Design system. New designs come to life through CAD
system which has not only reduced product development cycle but also has reduced problems
with tooling and production resulting in a superior product.
All of the Regal’s products follow a similar production process; however the hulls and decks are
hand-produced and sent to assembly line to be joined and components being attached.
Different models have different assembly lines in different buildings. When all the parts are
assembled and fixtures are put in place, the boat is sent to test tank for watertight, gauge and
system inspection. Moreover, Regal has real scale boat testing that places small boats in test
tank and tests yacht on lakes and oceans.
The facility is operating in Orlando, Florida while it has suppliers from around the world.
5. Layout Design:
With changing consumer tastes, compounded by material change and ever-improving marine
engineering, the frequent use of CAD meet the issue of cost competitiveness and providing
good value for customers.
6. Human Resource and Job Design:
Customer is the life blood of business either internal (employees) or external (consumers) sense
of ownership is created in the employees. Regal Marine relies on trained labor to handle design
and assembly. They work with integrity, honesty and character says Tim Kuck because the
company doesn’t just earn profit but share it with employees so they participate in the success
of the business.
7. Supply Chain Management:
Regal introduces high quality luxury boats through close ties with suppliers. At regal marine
suppliers are relied upon not only for quality components delivered on time but for up to date
technology and innovation.
Regal expects members of its supply chain to be full partners. Vendors meet with Regal’s
designers to discuss changes to be incorporated into new product designs.
Regal has world-wide distributors, not only in USA. The first class dealers ship to 40 different
countries and maintain a good public image.
Regal has its own strategy to maintain inventory. It seeks to:
o Regal minimize inventory in the chain to avoid obsolescence
o Reduce cycle times
o Keep lower levels of inventory for cost reduction
o Use alternative products in case of unavailability
o Partnerships with large number of suppliers to ensure flexibility. .
o Through economies of scale in procurement, regal is able to navigate against billion-dollar
competitor Brunswick (maker of Sea Ray and Bay linear Brands)
All of Regal’s products follow a similar production process. Different parts are added at
different workstations. Wooden components are delivered on a just-in-time basis for
installation at one station. The boat, once ready is then sent to test tank for inspection.
Regal has strong relationships with its suppliers to ensure flexibility and perfect parts. The boats
are tested before they are shipped to the customers. Regal maintains high quality through the
use of CAD system.
Moreover, their products have life cycle of three years so they respond more quickly to markets
by producing new boats.