SUPERYACHT INDUSTRY
International Competitive Benchmarking
In recent years the luxury superyacht market (vessels over 24
metres in length) has been undergoing considerable evolution. In
particular, a 28% increase in world production is forecast for the
2004-2005 sailing year, with an average annual growth rate of
16.4% over the last 6 years. These figures make the superyacht
market a business niche with a growing level of attractiveness.
Such evolution could not but result in fierce and growing
international competition, marked also by the entry of new
players . This change of scenario makes it necessary to carry out a
competitive benchmarking analysis of the various nautical
industries of each country in order to identify not only the
competitive ability of each but also the related strategic-
competitive positioning. The aim is to take a snapshot of the
market with view to outlining a competitive picture, as complete
as possible, of the luxury superyacht industry as a whole.
The factors emerging from this competitive benchmarking analysis
are the concentration of the pool of businesses, the degree of
specialisation in the industry for each country, the average
length of superyachts produced by each industry/country, the
competitive ability level in terms of market performance and the
strategic-competitive positioning given by the intersecting of two
variables.
The first point is analysis of the number of shipyards per country
that operate in the production and marketing of superyachts. This
type of analysis elicits the degree of specialisation possessed by
each country within the reference market. It is important to
underline that in terms of international ranking Italy is
unquestionably the leader with a portfolio of 24 yards scattered
throughout the national territory. The USA follows with 22 yards,
then the Netherlands with 15 (see figure 1).
Over and above geographical concentration, figure 2 shows the
competitive level evaluation of the nautical industries of each
country in the main business segments . With reference to the
latter, the main reference areas are those of the large flybridge
and the large open which represent an overall 87% of the entire
superyacht market. This datum is especially important for an
overall evaluation of competitive strength because, for example,
the concept of market leader takes on a different breadth
depending on whether it refers to a highly attractive or less
attractive business area.
In this context, and in terms of overall competitiveness, Italy
confirms its leading position in the main business segments and
also in the various micro segments .
It is important to underline that the only business micro segment
in which Italy plays a slightly lesser role than the reference
market leader is that of the Large Flybridge over 150 feet. This
segment is headed by the Dutch yards with an overall market share
of 23% (expressed in quantity), immediately followed by the
American yards which show high competitive ability, especially in
the over 100 feet range. With reference to the same segment, Italy
and the USA tend to have equivalent competitiveness in the over
150 feet range.
In the luxury large open business segment, the country with on
average a very high degree of competitiveness - apart from Italy
which is unquestionably the market leader - is the United Kingdom
whose competitive strength emerges in the 80 to 120 feet market.
In the same segment Denmark has a medium level of competitiveness
in the 80 to 100 feet range while the USA and Italy predominate in
the over 120 feet.
The situation changes in the sport fishing category where in terms
of competitiveness the USA is market leader. On this subject it
should be underlined that in the first market range - vessels
between 80 and 90 feet - the USA has almost exclusive competitive
ability whereas, on the whole, New Zealand offers a decidedly high
level of competitiveness.
As for luxury sailing superyachts, various countries jostle for
leadership. In general the Dutch yards demonstrate high
competitive ability - especially in the over 120 feet micro
segment - while France is highly competitive in the 100 to 120
feet category. In this case too Italy attracts attention with an
average competitive strength, its best competitive performance
being in the micro segment of sailing superyachts over 150 feet.
The scenario changes radically in the Expedition Yacht segment
which is headed by China and followed only by Brazil and Turkey.
But competitive benchmarking cannot and should not end here,
because it is equally fundamental to consider positioning in terms
of average length. At an overall level figure 3 shows how Germany
and the Netherlands are the only countries with an average length
greater than the world average (204 feet for Germany and 158 feet
for the Netherlands).
Italy is positioned in lower terms with regard to the world
average with an average length of 111 feet, also lower than the
USA with its average length of 116.
The Italian nautical industry can claim a length above the world
average only in the Open category: 96 feet as against a world
average of about 95.
In the Large Flybridge segment the industries/countries with
lengths above world average are the Netherlands (168 feet), New
Zealand (156), France (165), Germany (196) and Denmark (160).
Proceeding, we may analyse competitive positioning in greater
depth by considering two variables of crucial importance: market
share percentage and average length in feet.
From the intersection of these data it emerges that Italy and the
USA are the countries with the absolutely highest market shares
expressed both in units and in length. But also in this case the
market leader is the Italian nautical industry: 38.2 % market
share in quantity and 36.3% market share in length.
A further point of analysis regards competitive positioning. The
aim here is to delineate the competitive position of a given
industry/country within the more general overall framework
represented by the whole market.
In the specific case, figure 4 shows competitive positioning with
regard to the large flybridge category. In this context Italy
stands considerably apart from the other countries, since Italian
nautical industries feature a very positive market share/average
length of production ratio. Within the same market the competitive
position of the Netherlands should be noted: the market share is
similar to that of the United Kingdom, the only difference being a
decidedly larger average length production. The position of the
USA is, on the other hand, halfway between that of Italy and the
other main countries. With regard to the latter, Germany has the
lowest market share but is distinguished by outstanding
positioning in the custom large flybridge category.
Lastly, figure 5 shows competitive positioning with regard to
large opens. In this case too Italian industry leads the field but
without obfuscating the interesting competitive positioning of the
United Kingdom which is given by a decidedly balanced market
share/average length ratio.
So, to sum up this first competitive benchmarking analysis, Italy
is undisputed leader in the main business segments of the luxury
superyacht market but should not rest on its laurels because the
areas of improvement are clear and many, and other countries are
certainly not going to hang around and watch.
It isn't easy to acquire and maintain the role of global market
leader, but we are convinced that Italian nautical industries,
through marketing management, can and indeed must win this
exciting challenge.
1. The new entries are not only actual start-up concerns but also
derive from the repositioning, in terms of corporate strategy, of
certain shipyards that have decided to extend their business portfolio.
2. The main business segments of the superyacht market are: Large
Flybridge, Large Open, Sport Fishing, Expedition Yachts and
Sailing Yachts.
3. One of the main criteria by which the market may be further
segmented (micro-segmentation) is the length criterion (80-89, 90-
99, 100-119, 120-149 and over 150 feet).
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