Polaris or arctic cat ATV
Another chapter of rich business history will close when Arctic Cat, Inc., one of the original Minnesota Twins of the Minnesota-born snowmobile industry, completes its just announced sale to the conglomerate Textron.
Maybe it’s been a long time since anyone’s called Arctic Cat and Polaris Industries the Minnesota Twins, but it’s not just a clichéd way to describe two local rivals. These two share an awful lot of DNA, brought into existence by some of the same people and in the same rural part of the state. They built largely the same products.
They are two of just a few snowmobile makers that survived a brutal slump that just about killed them both. They have since prospered, but not in the same way. Over the last 25 years, Polaris has grown its sales at an average annual growth rate of nearly twice the rate of Arctic Cat. And on the day Arctic Cat announced its sale at a value of $247 million, the stock market valued Polaris at about $5.7 billion.
With the notable exception of a late entry of Arctic Cat into the all-terrain vehicle market, trailing Polaris by roughly a decade, you can’t easily put your finger on a strategic mistake or a stroke of luck that could explain how their fortunes diverged.
One key could be the way they recovered from near-death experiences in the early 1980s. Polaris emerged first and was sooner to the market with improved products, meaning it grew a little bigger, a little faster. That momentum led to more dollars going to marketing and product development and let it launch even more fresh designs. It’s a lead it never gave up.
Maybe that’s the lesson here, that once again in business it’s not one hot product or key acquisition or single brilliant strategic decision that makes all the difference.
Both Arctic Cat and Polaris are now based here in the Twin Cities, but they got their starts way Up North, as very early pioneers in the snowmobile industry. The corporate ancestor of the current Polaris really invented the snowmobile, in Roseau, less than a dozen miles from the Canadian border. This machine was so odd in the 1950s that trade-show visitors crowded the booth to see just how it could make snow.
The company that became Arctic Cat got formed by former Polaris principal owner Edgar Hetteen in Thief River Falls, about an hour’s drive from Roseau, and not long after the Polaris snowmobile business got rolling. The industry was still in its infancy with a scattershot dealer network, but Arctic Cat quickly became established as an innovator.