Growth-Strategy-for-an-Auto-Major-Case-Study Automotive-Sector

Topics: Marketing, Strategic management, Price Pages: 15 (1968 words) Published: June 23, 2013
AVALON
Consulting

Case Study

CONFIDENTIAL
2010 © Avalon Consulting. All Rights Reserved

A large CV manufacturer in India wanted Avalon Consulting to conceptualize and facilitate implementation of strategies to improve market share in their OEM branded spare parts business Situation Approach Solution

 Client

Our client is a large Commercial Vehicles manufacturer in India and had a OEM branded spare parts business with a turnover of about USD 50 million before the engagement



Our client had focused on spare parts as an important business and developed it over the last three decades



Over the past few years, there was a downturn in this market resulting in falling prices and margins for most manufacturers. Our client also had to resort to price cutting resulting in reduced margins. The turnover had also fallen in the last year

Situation



Any fall in price will require more than proportionate increase in volumes to protect absolute profits



Our client approached Avalon Consulting to help turn around their spare parts business by formulating a suitable strategy. At the end of this exercise, we were retained to help the client in the implementation exercise as well as build a win-win relationships with distribution partners, customers and influencers in the spare parts aftermarket

AVALON
2 Strategy formulation and implementation support for a CV major in the replacement parts market

Consulting

The broad framework for our engagement – from strategy right through implementation across India Situation Approach Solution Example

Framework for Engagement Market Potential for Key Part Lines and Share of client Perception about client in Market Place - Building Brand Equity

Workshop with client Managers Phase I Developing the Marketing Strategy

Sales Promotion Effectiveness

Opportunity to Improve Reach

Phase II

Implementation across 5 Pilot Locations
Channel Management Analysis

Phase III

Scale up on All-India Basis

Competition Analysis

AVALON
3 Strategy formulation and implementation support for a CV major in the replacement parts market

Consulting

The strategy was developed separately for the two key sub-segments of the business - captive usage by their dealerships and a retail distribution business Situation Approach Solution Example

Strategy to Increase Sales

Service / Captive Business

Retail Distribution Business

Target Setting

Prudent Pricing & Service Packages

Performance Improvement

Improve Efficiency

Dealer Portfolio Management

Focus on 4 Ps

These were two distinct elements of the engagement - this case focuses on the distribution side of the business 4 Strategy formulation and implementation support for a CV major in the replacement parts market

AVALON
Consulting

We segmented the client brand range into a few targeted product groups based on inputs from the workshop and market characteristics Situation Approach Solution Example

Segmentation of client Range

Status in the market

Leadership
 Critical parts  Significant in house value addition

Achieve Leadership / High Market Share
 Critical parts  High consumption

Focus will be required
 Low value parts  High consumption

Characteristics

Examples

 Crankshaft  CWP

 Pistons and Liners  Clutch plates  Thin wall bearings

 Brake Linings  Fillers

 

Possibly plagued by high inventory Focus on sales increase of distributor to reduce inventory

 

Will be the driver for sales of client (in the short term) Focus on range enhancement of distributor to increase sale

AVALON
5 Strategy formulation and implementation support for a CV major in the replacement parts market

Consulting

We also mapped the price-value perception of client across product groups to identify the value gap to be bridged Situation Approach Solution Example

Product 1 - Price Value Perception
80000 70000 60000...
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