Winnebago Industries

Winnebago Industries

Case Analysis

CORPORATE BACKGROUND

COMPANY OVERVIEW

Winnebago Industries, Inc., based in Forest City, Iowa, is a United States manufacturer of recreation vehicles primarily used for the leisure travel and outdoor recreation activities. Their products lines include 78 products with most of their growth stemming from new innovations aimed to capture industry market share. The Company is currently the market leader in the $5.3 billion motor home market. Winnebago markets their recreation vehicles through wholesalers to diversified dealers located throughout the U.S. and Canada. Of the Company's revenues, 90% are from motor home sales with the remainder generating from floor plan unit financing for WGO's dealers and the manufacturing of component parts that Winnebago makes for other motor home manufacturers.

MISSION STATEMENT

Winnebago Industries, Inc. is a leading manufacturer of recreation vehicles (RV's) and related products and services. Our mission is to continually improve our products and services to meet or exceed the expectations of our customers. We emphasize employee teamwork and involvement in identifying and implementing programs to save time and lower production costs while maintaining the highest quality values. These strategies allow us to prosper as a business with a high degree of integrity and to provide a reasonable return of our shareholders, the ultimate owners of our business.

VALUES

How we accomplish our mission is as important as the mission itself. Fundamental to success of the Company are these basic values we describe as four P's:

People- Our employees are the source of out vast strength. They provide our corporate intelligence and determine our reputation and vitality. Involvement and teamwork are our core human values.

Products- Our products are the end result of our teams' efforts, and they should be the best in meeting or exceeding our customers' expectations worldwide. As our products are viewed, so are we viewed.

Plant- The Company believes its plant is the most technologically advanced in the RV industry. We continue to review facility improvements that will increase the utilization of our plant capacity and enable us to build the best quality product for the investment.

Profitability- Profitability is the ultimate measure of how efficiently we provide our customers with the best products for their needs. Profitability is required to survive and grow. As our respect and position within the marketplace grows, so will our profit.

GUIDING PRINCIPLES

Quality comes first- To achieve customer satisfaction, (we must make) the quality of our products and services . . . be our number one priority.

Customers are central of our existence- Our work must be done with our customers in mind, providing product and services that meet or exceed expectations of our customers. We must not only satisfy our customers, we must also surprise and delight them.

Continuous improvement is essential to our success- We must strive for excellence in everything we do; in our products, in their safety and value, as well as in our services, our human relations, our competitiveness, and our profitability.

Employee involvement is our way of life- We are team. We must treat each other with trust and respect.

Dealers and suppliers are our partners- The Company must maintain mutually beneficial relationships with dealers, suppliers, and our other business associates.

Integrity is never compromised- The Company must pursue conduct in a manner that is socially responsible and that commands respect for integrity and for its positive contributions to society. Our doors are open to all men and women alike without discrimination and without regard to ethnic origin or personal beliefs

LONG-TERM OBJECTIVES

Substantial long term growth for Winnebago in the future with higher revenue growth targets in the two to three year horizon. Increased expansion of product lines and motor home technology as Winnebago actively pushes to develop new product components and designs.

COMPETITIVE POSITION

ENVIRONMENTAL ANALYSIS

3a. General Environment

a. Social

b. Economic

-The mobile home and recreation vehicle industry is highly sensitive to the overall health of economic environment in the United States. Purchases for mobile homes and products depend, in large, on the availability of consumers' disposable income. As the economy strengthens or worsens, it has a direct effect on Winnebago's product sales and revenues. Consumers' willingness to spend their disposable income on motor homes is a strong reflection on their confidence about their financial future. We will look at four key factors to analyze the overall health in the U.S. economy; Gross Domestic Product, Inflation, Consumer Confidence, and Interest Rates, that in turn give us a better standing to predict industry and company trends.

a. Gross Domestic Product and Inflation

Real GDP is one of the most important indicators of economic health. Strong GDP growth has a direct effect on the recreation vehicle industry as most companies that fall within the RV industry are manufacturers. Because the industry is largely dependent on consumers' disposable income, real GDP growth is essential for growth in discretionary purchases such as motor homes.

b. Percent Change in Real GDP Growth

Inflation must be stable so that as GDP grows, consumers are able to maintain their spending levels for purchases of all goods by maintaining comparable prices across the board. The impact of a number of forces, such as the collapse of the bubble, downward pressure of stock prices and asset values, and globalization, also is the mix to contain inflation

c. Consumer Confidence and Unemployment

The more confident a consumer is, the more they are