Silver Ships - Company Overview & Strategy

COMPANY OVERVIEW & STRATEGY

Silver Ships, established in 1985, is a company born out of the innovative and entrepreneurial spirit of founder Mike McCarty. For 25 years, Silver Ships has created custom designed small to medium-size vessels, competing in the military and workboat industry. To date, the company has seen great success: it has sold more than 1,500 boats, retained a strong balance sheet, and seen substantial growth. Revenues increased from $5.7 million in 2006 to nearly $11 million in 2009. Their current strategy has done well, but as the company looks to grow in the face of economic uncertainty, McCarty must reevaluate Silver Ship’s strategy.

In evaluating Silver Ships’ strategy to date, it is clear that McCarty has been the driving force of the company’s success. McCarty started his career in Knoxville, Tennessee as a commercial fisherman and eventually became the fish “market” by purchasing other fisherman’s catch. He then started a commercial salt-water fishing enterprise in Mobile, Alabama. His drive to improve his catch and in turn, his business, led him to design his own purse seining fishing boat. The quality and construction of the boat caught the attention of other fishermen and when purse seining was banned he was offered opportunities to build custom boats. Demand was high and McCarty formally established Silver Ships and eventually moved to its current location in Theodore, Alabama. To this day, McCarty personally oversees the daily operations.

McCarty had a clear vision from the company’s inception to “design and manufacture the most advanced, life-sustaining, and mission-capable 20-to-65 foot aluminum boats in the world.” This mission statement remains prominently displayed in the company’s headquarters today. Silver Ships produces two different kinds of aluminum boats, the AM Series RHIBs and the SS Series. Silver Ships has a range of customers from federal agencies and the U.S. military to commercial customers and oil companies. The AM Series RHIBs, acquired from Ambar Marine, are fast boats featuring a collar system that makes the boat virtually unsinkable. One of the most notable features of the AM series is its modular design, allowing for sections of the boat to be replaced as needed. These boats are highly adaptable and regularly customized to meet customer specifications. By acquiring Ambar Marine, Silver Ships added a highly regarded brand name, increased its product offerings, and gained ownership of advanced, top of the line technology.

Shipbuilders must be able to compete on cost first and foremost but due to the fact that labor and supplies are at a set cost across the industry, companies must further develop a strategy to set them apart from competitors. McCarty’s focused differentiation strategy allowed him to concentrate on providing customized boats to