Wednesday, October 13, 2004

Give People What They Want

Do you want to know how to succeed in business? Simple. Give people what they want. Want some cases in point from the Gun industry? I knew you might.

There have been a handful of trends in the last few years, they are:
  1. Large capacity semi-automatic pistols, the so-called Wonder Nines
  2. Small pistols for concealed carry
  3. Military style semi-automatic "assault" weapons like the AK and AR derivatives
  4. Affordable production near-custom 1911 semi-automatics ala Kimber, Springfield Armory, etc.
  5. Affordable reproductions of old west guns driven by Cowboy Action Shooting (CAS)
These trends have occurred for several reasons, for instance 2 and 4 were arguably driven by the now defunct Assault Weapons Ban (long may it rot). Similarly 1 and 3 were driven by the desire of gun owners to have more lethal weapons. What is my point? Well lets take a look at some gun companies that aren't doing so well.

Case 1: Colt

Colt was the company to beat during the war and even post-war years. Until the 1970s and '80s when they ran themselves into the ground. Now they are trying to rebuild. They have canceled the lions share of their makes and models. This isn't necessarily a problem since some of their guns, like their double action revolvers, are unlikely to be profitable.

So Colt basically makes two guns. The first is the 1911. However Colt really only sells milspec, non-custom models. In fact the reason market 4 exists is because Colt missed the boat and didn't offer upgraded models when they had the chance. So they don't fill market 4. The second is the AR-15 (market 3), which Colt does well with, especially in the civilian and LEO markets. However they refuse to sell several models to civilians and the models they do sell are modified from the military spec standards so parts will not interchange. People don't like that either.

Colt doesn't make the guns for markets 1, 2, or 5. They have a design for a wonder9 because they show it off with their smart gun. However nothing has hit production except for the All American which was a horrible failure. Colt once made the Mustang .380 in several model styles for the concealed carry market. Even now Springfield Armory is considering bringing back a clone of it when Colt's patents lapse. But Colt doesn't make it anymore. Colt makes the SAA (THE cowboy gun) but at $1500 a pop from their custom shop, it isn't affordable for the average cowboy shooter. They also made the Colt Cowboy, which was shoddily made and still priced $300 more than their competition.

So Colt has been and remains in serious financial trouble. They refuse to sell the profitable products that would require little development and they no longer have the money to develop new products because of lack of revenue. So they have been trying to eke out enough revenue with their current line to get them to place where they have a pot of development money. Good luck.

Case 2: Remington

Remington doesn't make any guns for any of these markets. Part of this is because they don't make handguns which are 4 of the growth markets right there. They might be able to get into Market 3 with a ruggedized model 700 rifle like military/LEO snipers use, but they don't sell it. Instead the aftermarket is raking in a bundle on ruggedizing the guns themselves. Oops. Similarly the LEO version of their 870 pump shotgun might get them close, but it isn't sold to the general public either.

Their bread and butter is the hunting market which is slowly shrinking as the US population grows more urban. This is opposed to the self defense market which has been growing as the population shifts urban. Their marketing strategy so far has been to make cheaper versions of their current products (like the 710 and 597) using lower labor prices at their Kentucky factory. That will only go so far.

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