Polaris 2007 Annual Report Download - page 8

Here is how we plan to meet our aggressive goals
for improving operations:
QUALITY
Improve consumer satisfaction by 50% by 2010
• Increase percentage of vehicles
with no warranty claims
• Reduce experiential product defects
• Increase market share each year
• Reduce rework
COST
Reduce system-wide cost by 20%+ by 2010
• Reduce dealer and factory inventory
• Reduce product cost
• Reduce operational overhead expense
• Reduce tooling and capital spending
• Improve marketing effectiveness spending
as a percentage of sales
• Increase dealer profitability to powersports-
leading level
SPEED
Improve speed to consumer by 50% by 2010
• Improve inventory turns
• Reduce purchasing lead times
• Reduce new product development cycle time
• Reduce customer feedback quality loop cycle time
• Reduce wholesale order process time
• Deliver right product, right time, right place
FOUR POLARIS INDUSTRIES INC.
A LETTER FROM THE CEO AND COO (CONT.)
Speed: We got faster in 2007 as well — over 15 percent faster
to our consumers by eliminating waste and unnecessary steps.
The speed improvements came in a number of important areas,
including the new product development cycle, logistics, factory
and dealer inventory, and the quality feedback loop. A tangible
example of this improvement in speed was visible with the
introduction of the new RANGER Crew, which was brought to
market in the fourth quarter of 2007. This project was done several
months faster than would have been the case even a year ago.
Speed will become a competitive weapon for Polaris.
For 2008, we expect to improve even more. Quality, as measured
by our customers, should improve by more than 10 percent, our
system-wide costs should go down by at least 5 percent, and we
should improve our speed by another 15 percent. We are more
confident than ever that the Operational Excellence initiative will,
over time, transform our competitive position.
3. GROW THE COMPANY
In year one of our plan, we delivered over $200 million in
additional sales in our growth businesses, putting us on track
toward reaching our 2009 goal of $500 million in incremental
sales. Here’s how we’re achieving it:
Victory: The New American Motorcycle®had another strong
year, with retail sales growing at 10 percent while the overall
cruiser and touring markets declined. This was our fourth
consecutive year of market share growth. In 2007, we introduced
two new models targeting the attractive and growing luxury
touring motorcycle segment: the Victory Vision Street and
Victory Vision Tour. These new models are designed to deliver
what touring riders told us most influences their buying decision:
forward-looking style and comfort. In 2008 and beyond, we
expect to continue to capitalize on our brand positioning as
The New American Motorcycle company with these and other
new, innovative products.
RANGER:The side-by-side market is the fastest-growing category
in powersports today, and our goal is to dominate in this business.
Polaris significantly outperformed the market in 2007 with
industry-leading products. The Polaris RANGER, the hardest
working, smoothest riding side-by-side, is a leader in its class, and
our new RANGER Crew six-passenger people mover, introduced
in the fourth quarter of 2007, continues the RANGER legacy. The
RANGER RZR is the most successful product we have introduced
in the last decade. It is the lightest side-by-side vehicle, and at
50 inches wide, RANGER RZR is the only trail-capable side-by-side
vehicle in its class. It’s built with a patented design that places
the engine behind the seat, creating the lowest center of gravity
of all the sport side-by-sides to give it unmatched off-road
responsiveness, speed and safety. The RANGER RZR has far
exceeded our initial sales expectations. This is the kind of product
some companies only dream about, but it’s the kind of game-
changing product Polaris customers have come to expect from us.
OPERATIONAL
EXCELLENCE
2008 RANGER Crew