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Colt: what went wrong in Hartford?

Bob Lockett, is a successful gunshop owner in the Kansas City area with three retail outlets, all of them authorized Colt dealerships. Locket holds a Master of Business Administration degree and has a thorough understanding what really makes the gun business tick--from down in the trenches.

The reader is reminded that Mr. Lockett's commentary covers a period of time in which there were changes in not only Colt's management, but also its corporate ownership. Some of his observations are applicable to today's management, and some are only relevant to past administrations.

The sad news was duly reported in The Wall Street Journal on March T20, 1992. Colt's Manufacturing Company, formerly Colt Patent Firearms, a division of Colt Industries, had filed for Chapter 11 protection under the bankruptcy laws.

Colt, the firearm that made all men equal. Colt, the firearm that more than any other evokes the nostalgic feelings of the Old West.

Colt firearms -- the Peacemaker, the 1911 Government Model, and the M16 -- are recognizable in every country in the world and by almost any citizen of the planet, and yet Colt is bankrupt.

A company that enjoys unparalleled brand recognition -- bankrupt.

A company that enjoys generic word recognition for its product -- bankrupt.

A company that was the price point leader for the industry, which should have resulted in the maximization of gross profits -- bankrupt.

What in the world went wrong? Only Colt management knows for sure, but there's the paradox. If they really knew and understood what went wrong, they likely could have averted disaster.

Yet disaster has occurred. From a stocking dealer's perspective, looking up from the mud and blood of the retail trenches, here's how I see it.

Out Of Touch

In 1985, the U.S. Government adopted a double-action 9mm semi-automatic pistol. Okay, Colt lost the contract, but did they have a double-action pistol of any caliber for the civilian market?

No! It was not until five years later that the Double Eagle came on the scene. By then, the bloom was off the rose and precious points of market share were irrevocably lost to Colt's competitors.

It is much easier to be the market leader than to be a Johnny Come Lately and have to take someone else's market share away. As the saying goes, "If you ain't the lead dog, the view's always the same."

Colt had no contingency plan to put into effect when they lost the contract to provide the Government Model. This would only lead a thinking manager (or a paranoid one) into suspecting that Colt did not have a written, detailed business plan which was adequately formulated with contingency alternates.

Furthering this line of thought, consider the following:

Colt failed to adequately identify its target market and the demographics of that market segment. By this I mean Colt did not really know very much about the "typical" or "average" Colt consumer: What is their age, gender, annual income, education, and zip code? How many people live in the household? What guns do they own? How many times a year do they go shooting? Do they shoot trap, skeet, silhouette, bullseye or just plink? With this information, Colt would have known what guns to make for the customers who were buying them.

Discontinued Winners

Consider that with the discontinuance of the Targetsman and Woodsman series in the 1970s, the Ace, Ace conversion kit, and the Trooper .22 caliber in the 1980s, Colt had not one offering of the most popular caliber in existence -- the .22 Long Rifle. What were they thinking?

Also consider that in the mid-1980s Colt discontinued all production of the D-frame series revolvers -- Agent, Detective Special, Commando, et cetera.

They did this in the face of the BATF's annual firearms production statistics which, upon even cursory review, would have revealed a growing demand for this type of revolver by all segments of society, but more importantly the largest as yet untapped market for the industry -- women.

Taurus has done extremely well with their snubnosed five-shot revolvers. Ruger has a winner with the introduction of the SP-101 series. The king of them all, Smith & Wesson, has hit the bonanza jackpot with the LadySmith series.

Colt, with their obvious advantage of the sixth shot, abandoned this market just as it exploded.

Missed Opportunities

Dirty Harry rocketed the .44 Magnum revolver to fame in the 1970s along with retail prices for the gun. Colt came dawdling along 20 years later with their Anaconda. Talk about being late to the dance.

It has been my considered opinion that the reign of the 9mm has been over for some 18 months and the .45, and to some degree the .40 S&W, will now be the calibers of customer choice.

Frankly, this has been as obvious as a large wart on the nose. We use computer-generated sales analysis reports which use linear regression techniques to report the history of business in our stores. These reports are very reliable in predicting trends, allowing us to purchase the right product in the right quantity at the right time.

Colt could have well used such data uplinked to them by a few selected dealers around the company, but this assumes two things. One, someone was introspective enough to absorb the data and act upon it. Two, stocking dealers had been identified who could provide such reliable market intelligence.

The reality is that, in over 10 years in the retail business, I have never seen or heard from a Colt field sales rep.

Where did they get their market intelligence? How did they know what was selling and what was not? How did they really know what a product is worth to the ultimate consumer?

I don't mean to kick someone when they're down and very nearly out, but it's obvious that they really did not know.
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Title Annotation:part 1; Colt's Manufacturing Company Inc.
Author:Lockett, Bob
Publication:Shooting Industry
Date:Jun 1, 1992
Words:970
Previous Article:Reading the handgun market.
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