Should a Pontoon Builder Go Electric? Scope, Question and Governing Assumptions for an MBA Capstone on Lakemont Marine
Student Name
American College of Education
MGMT5091: MBA Capstone Experience
Module 1 Assignment
Instructor Name
September 6, 2027
The Firm
Lakemont Marine is a composite second-generation family business that builds pontoon boats in two assembly buildings in northern Indiana, a region that is home to much of the country's pontoon and recreational vehicle manufacturing. It employs 520 people and shipped about 3,100 boats last model year at an average wholesale price near $45,800, for revenue of about $142 million. Gross margin was 19 percent and operating margin about 6.5 percent, or roughly $9.2 million. Lakemont sells only through 118 independent dealers in the Midwest and Southeast, most of whom also carry one or two competing brands, and it buys its outboard engines, the most expensive component on most boats, from two engine makers under annual agreements.
Lakemont's boats sit in the middle of the market: better finished than entry-level brands, priced well below the premium builders owned by large marine groups. The owners describe the firm's position as safe but narrow. Dealers value its reliability and delivery record, but in the past two seasons several of them have asked whether Lakemont intends to offer an electric model, because customers on lakes that restrict gasoline engines or horsepower are asking them.
The Question
A capstone needs a question that a decision-maker would have to answer, not a subject to be described. Rumelt (2011) put the kernel of a sound strategy in three parts: a diagnosis naming the challenge, an overall approach for dealing with it and a set of actions that fit together to carry that approach out. A list of goals, however ambitious, supplies none of the three. The diagnosis here is that Lakemont's product line is built entirely around gasoline outboards at a time when a meaningful share of its dealers' customers, on restricted lakes and among buyers who value quiet, cannot or will not use one.
The question the capstone will answer is therefore: Should Lakemont launch a factory-built electric pontoon line by model year 2030, and if so, at what scale, through which dealers, built how and funded by what? The answer may be no. A capstone that recommends against the move, with the numbers to show why, answers the question as fully as one that recommends it.
Why the Decision Has to Be Made Now
Lakemont could wait, and waiting has real advantages: battery costs are falling, and a later entrant can learn from the mistakes of the first. But the decision cannot be postponed indefinitely without being made by default. A new model line takes fifteen to eighteen months from approval to first shipment once engineering, supplier agreements, dealer training and a production bay are included, and model year 2030 boats begin shipping to dealers in the summer of 2029, so a launch on that schedule requires a decision by early 2028. Dealers who want an electric model and cannot get one from Lakemont will add a second brand that offers it, and a dealer who carries a competitor's electric boat may begin carrying its gasoline boats as well.
McGrath (1999) argued that uncertain ventures are best treated as options, small initial commitments that preserve the right to expand if early results are good and limit the loss if they are not. That view shapes the question. The capstone does not ask whether Lakemont should bet the business on electric boats but whether it should buy a well-designed option on them, and how large that first commitment should be.
Scope and Boundaries
The project covers one product decision and everything the firm would need to do to carry it out: the market for electric pontoons in Lakemont's dealer territories, Lakemont's internal capabilities and financial position, the marketing and dealer plan, the production and supply plan, the organizational changes and the financial projections for model years 2030 to 2034. It covers the five-year window because battery prices and lake regulations are too uncertain to project further with any honesty.
Three things are deliberately excluded. The project does not consider an acquisition of an existing electric boat company, because the owners have said they will not borrow for one and the question is whether Lakemont itself should build. It does not consider changes to the gasoline product line except where the electric line would take production space or dealer attention from it. And it does not attempt to forecast the whole national market for electric boats, only the demand Lakemont's own dealers could plausibly reach. Each exclusion narrows the work so that the sections that remain can be done properly.
Method and Sources
Hambrick and Fredrickson (2005) argued that a strategy is an integrated set of choices about arenas, vehicles, differentiators, staging and economic logic, and that the choices must reinforce one another. The capstone follows that structure. Module 2 will analyze the external environment, with market data that later modules will reuse rather than re-estimate. Module 3 will assess Lakemont's internal position and build the financial baseline from the same figures. Module 4 will set out the marketing, dealer and operations plan. Module 5 will reconcile the sections and correct the places where they disagree, and Module 6 will assemble the full plan and its defense.
Evidence will come from four kinds of source: Lakemont's own sales, cost and dealer records, which the owners have agreed to share in summary form; a survey of Lakemont's dealers on customer requests, restricted lakes and service capacity; published regulatory lists of lakes with engine or horsepower restrictions in the dealers' states; and peer-reviewed research on strategy, innovation and finance. Where a figure is estimated rather than recorded, it will be labeled as an estimate with its basis.
Governing Assumptions Register, Version 1
Because each section of the capstone will be written while earlier sections are already fixed, every figure the plan depends on is recorded here once. Later sections must use these figures, and any change must be made in this register, dated and explained, rather than in the section where it happens to become inconvenient. The initial figures are as follows.
A1, launch timing: first electric boats ship for model year 2030. A2, volume: 160 units in the first year, 380 in the second and 620 in the third, then growth of 15 percent a year. A3, average wholesale price: $76,000 per boat, including the electric outboard and battery system. A4, variable cost per boat: $61,500, of which the propulsion and battery package is about $27,000. A5, participating dealers: 30 of the 118, selected for restricted-lake territories and service capacity. A6, capital investment: $6.4 million for a dedicated assembly bay, battery handling and testing equipment and tooling. A7, added fixed costs: $2.1 million a year for engineering, dealer training, warranty reserves and product management. A8, cost of capital: 11 percent. A9, battery package cost falls 5 percent a year. A10, gasoline line volume is unaffected in the first two years and loses no more than 2 percent a year afterward to the electric line.
These are starting points, not conclusions. Several will change as the analysis proceeds, and the register is designed so that when they do, every section changes with them.
References
Hambrick, D. C., & Fredrickson, J. W. (2005). Are you sure you have a strategy? Academy of Management Executive, 19(4), 51-62. https://doi.org/10.5465/ame.2005.19417907
McGrath, R. G. (1999). Falling forward: Real options reasoning and entrepreneurial failure. Academy of Management Review, 24(1), 13-30. https://doi.org/10.2307/259034
Rumelt, R. P. (2011). Good strategy bad strategy: The difference and why it matters. Crown Business.
How this MGMT 5091 Module 1 example is structured
MGMT 5091 Module 1 often fixes the firm, the scope and the question the project answers; your classroom's instructions decide whether a real company, a client or a simulation supplies the material. This example describes the firm briefly, frames the question as a decision rather than a topic, sets boundaries with reasons, explains the method each later module will follow and ends with a numbered assumptions register, the device that keeps a cumulative document consistent.
MGMT5091 Module 1 questions, answered
What does MGMT5091 Module 1 usually ask for?
MGMT5091 Module 1 often asks students to choose the firm, define the scope and state the question the capstone project will answer. Many sections also expect a plan for the sources and methods each later part will use. Your classroom's instructions decide whether a real company, a client or a simulation is used.
How narrow should a capstone question be?
Narrow enough to answer with a decision someone could fund or refuse. A question about one move, with its scale, timing and funding, gives every later section something specific to support.
Why keep a governing assumptions register?
A capstone is written in pieces, and figures drift between sections. Keeping every figure the plan rests on in one numbered list, changed only there, keeps the finished document consistent with itself.
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