Change and consolidation for Navico- CEO Leif Ottosson explains

by Jeni Bone on 22 May 2010 The stand occupied by Navico at Sanctuary Cove is different this year. Same central location in Pavilion A, same size, some of the same faces, but the brands have been reduced to three – SIMRAD, Lowrance and B&G – and the focus is sharper. The mood though, is as buoyant as ever.

'2009 has been a good year for Navico,' affirms CEO, Leif Ottosson, who in June 2009, took over from Jens-Thomas Pietralla, who remains on the company's Board as a non-executive Director.

While Ottosson admits the company’s 2009 turnover dropped 25% and Europe and the US markets were challenging, he is ecstatic about the Australian market which he reports grew phenomenally. 'It was the only market that grew. We are just now starting to experience confidence coming back in other regions. Channels are taking on more inventory and already, there is a 30% increase on 2009.'

In the past 24 months, Navico has undergone some major restructuring in the form of consolidating operations from six factories around the world to a single facility in Mexico, and has shed 1000 staff to 'simplify the Navico footprint'.

According to Ottosson, the simplification from five brands to three, 10 different technical platforms to one, five different structures to one, various supply chains to one, and now one service network means Navico has a leaner cost structure, single focus and one simple mantra and direction.

'It’s much easier for our people to have a clear philosophy and it makes it easier to unify the culture of the company.'

When you operate in countries as diverse as Norway, New Zealand and the US, homogenising the Navico culture is a challenge. 'Getting the NZ, US and European cultures to mesh, to create a synergy and cooperation under the Navico umbrella has been our main focus,' he explains, adding that it was all the more complex following the 'mothballing' of the hero brands, Northstar and Eagle.

'There was a lot of emotion invested in those brands. When people work with them every day and believe in them, people are affected. But the three brands we have now are ideal. We are finally leveraging the strength of having three brands. It’s good for our customers – boat builders, dealers and retailers – to liaise with one rep and one service person.'

The decision to close factories in New Zealand, the US and Europe and concentrate on existing operations in Ensenada Mexico was purely financial. 'It is the most cost-efficient place, even more competitive than China. We still get components from Taiwan and China, but Mexico is where we manufacture.'

During the GFC and subsequent realignment of brands and corporate structure, Navico did not stop its investment in R&D. 'We still have our centres of excellence in Auckland, Tulsa, Ensenada, Romsey and Egersund. We are continuing investment in R&D. No competitor has launched more products than Navico in the past 24 months. We have many, many more to come.'

Crucial to the new strategy are three distinct product ranges over each brand. 'We will have three price points in each – value, mid and high.'

While there is some overlap, the three occupy different market segments. B&G is almost exclusively for the high end sail market, with a new aspirational range; SIMRAD covers motor, cruise and professional; Lowrance is aimed at the fishing and family market.

A lucrative market which has seen Navico appear at 11 boat shows already this year, is the commercial and professional sphere – government, military and commercial vessels.

At this year's Sanctuary Cove boat show, Navico is presenting a taster of things to come in the form of its 'Sonic Hub' with the slogan 'Rock Your Boat'. The music system, designed and engineered by Fusion electronics, will be retailing from September and caters to the current appetite for music on demand via iPod, iPad and USB.

For 2010 and beyond, Navico will launch a host of products in the broadband category, all with the theme of 'integrate everything'.

'We are just scratching the surface with this technology,' said Ottosson. 'There are many more applications for broadband and great potential. And that’s where we are way ahead of the competition.'

There will be five new products in the Australian spring, concentrating on the integration of electronics in the MFD.
'It’s all about creating a smaller footprint and shrinking the dashboard instrumentation.'

Ottosson, a Swedish native, educated in the US, a Harvard graduate with an MBA and a background in manufacturing and IT, is not deterred by recent movements in the marine electronics industry.

Commenting on the buyout of Raymarine by FLIR, he said simply: 'We don’t have to compete. I tell people not to be concerned. Most importantly to Navico is its innovation, its products, its people. I have never been in an organisation as dedicated as Navico. I’m not afraid.'