This one makes me nervous. It's dangerous in any industry when one company can corner a market. I worked in corporate acquisitions for a number of years, and here's what my strategy would be if I were Johnny Morris:
1. Announce that all brands will stay independent, only have common ownership (i.e. Bass Pro/JM). Pronounce that BPS will be a premier boat dealer with more selection than just Nitro from now on. Declare a win for consumers because a company that loves the outdoors will own all premier boat brands instead of a greedy Private Equity firm.
2. Behind the scenes, start consolidating internal functions (sales, accounting, management, HR) everything but manufacturing, and centralize the R&D function. Increase synergy and profitability.
3. Plan a market strategy to "stack the brands". Always make Nitro the most price competitive, Stratos falls behind Nitro, Triton falls behind Ranger.
4. Keep all four brands until the sales shake out. Drop the low performing brands, take the R&D budgets of the low performing brands to reinvest in the high performers. Increase profitability across the board.
5. At the end of the day, consumers will be left with 1 or 2 brands. My bet is that we will see Triton and Stratos fall to the wayside within 5-8 years as JM writes down the acquisition and hits his payback. We will be left with Nitro and Ranger. JM will have very large supplier power and will also be able to control the dealership markets which could hurt brands like Bass Cat, Phoenix, Skeeter, etc. To spell it out, JM could say that boat dealerships cannot sell the other brands if they want his brands on their lots, or could give better pricing structures to exclusive dealers. He will also have supplier power over Mercury, Evinrude, Honda, Yamaha, etc as he will have more purchasing power over the motors to power his boats.
My gut tells me this is a big loss for consumers and a huge win for JM. I would be surprised if Mercury, Yamaha and Evinrude, Bass Cat, Phoenix, Champion, etc don't throw a fit and try to challenge the acquisition. You may ask why this hasn't happened already because the three brands were already owned by a common owner. The difference is that JM owns the whole supply chain, manufacturing and now distribution. JM also owns the biggest source of competition, Nitro. Also, remember what happened to Procraft and Astro when JM bought those brands.
.thumb.jpg.df52404fc648bc17a641a50eb4c9dac9.jpg)
