Polaris 2011 Annual Report Download - page 39

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• difficulties in enforcing or defending intellectual property rights; and
• multiple, changing, and often inconsistent enforcement of laws, rules, and regulations, including rules
relating to environmental, health, and safety matters.
Our international operations may not produce desired levels of total sales or one or more of the factors listed
above may harm our business and operating results. Any material decrease in our international sales or
profitability could also adversely impact our operating results.
If we are unable to continue to enhance existing products and develop and market new products that
respond to customer needs and preferences and achieve market acceptance, we may experience a decrease
in demand for our products, and our business could suffer.
One of our growth strategies is to develop innovative, customer-valued products to generate revenue
growth. Our sales from new products in the past have represented a significant component of our sales and are
expected to continue to represent a significant component of our future sales. We may not be able to compete as
effectively with our competitors, and ultimately satisfy the needs and preferences of our customers, unless we
can continue to enhance existing products and develop new innovative products in the global markets in which
we compete. Product development requires significant financial, technological, and other resources. While we
expended $105.6 million, $84.9 million and $63.0 million for research and development efforts in 2011, 2010
and 2009, respectively, there can be no assurance that this level of investment in research and development will
be sufficient to maintain our competitive advantage in product innovation which could cause our business to
suffer. Product improvements and new product introductions also require significant planning, design,
development, and testing at the technological, product, and manufacturing process levels and we may not be able
to timely develop product improvements or new products. Our competitors’ new products may beat our products
to market, be more effective with more features and/or less expensive than our products, obtain better market
acceptance, or render our products obsolete. Any new products that we develop may not receive market
acceptance or otherwise generate any meaningful sales or profits for us relative to our expectations based on,
among other things, existing and anticipated investments in manufacturing capacity and commitments to fund
advertising, marketing, promotional programs, and research and development.
Item 1B. Unresolved Staff Comments
Not Applicable.
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