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A leading process control manufacturer had established a dominant position in the alternative energy market. Approximately 70% of its products were sold in developing countries, such as India, Pakistan, Brazil, etc. With the rapidly growing and evolving market, the company started to see new competitors and changing customer preferences. The company got concerned that its position might erode as competitors entered the market, standards changed, and the customer base evolved.

As such, the Client wanted to refine its strategy for this market. It had begun to develop a new product with improved features (e.g. safety, speed, etc.). However, given the differences in regional demand, the company was not sure whether this was the best way to invest its marketing resources. The Client, therefore, wanted to suspend its product development efforts and first study the market to understand the opportunity and customer demand.

Project Objectives

  1. Quantify and segment this alternative energy market to determine the potential in each geographic region and major country for the products of interest. This analysis included a detailed assessment of growth rates, trends, and drivers.
  2. Understand customer preferences relating to specific product functionality and identify barriers and switching costs relating to the products of interest.
  3. Recommend strategies to pursue the market and the products of interest.

RSR Approach and Methodology

In order to assist the Client in making an informed, unbiased and confident decision, RSR approached the situation as follows:

  1. Quantify and evaluate the markets in each geographic region. RSR conducted in-depth interviews with approximately 50 different component suppliers to size and segment the market. We then tied this information to reports and analysis provided by various local trade organizations. In addition, we gathered qualitative information regarding the market structure (e.g. who are the market leaders), drivers and trends, and also assessed the technical requirements in each segment.
  2. Competitive analysis. RSR assessed the market position of each of the major component and system suppliers. In particular, we assessed each company’s regional and market strengths.
  3. Customer Analysis: We interviewed the key buying contacts for customers that are using the products and components as part of their alternative energy solution. We identified switching barriers, current and potential sources of customer dissatisfaction, and projected future product/service needs.

Research Findings and Recommendations

  • RSR determined that a portion of the supply chain was in the early stages of vertical integration.
  • Given this situation, RSR warned the Client about the danger of its current market position as a component supplier. We recommended an alternative strategy in which the Client bundles its products with the offerings of its parent company and reorganizes its sales force to offer this broader solution to the OEM customer.
  • RSR also suggested the Client introduce a new product to increase value to the OEM. Given the nature of the market, RSR emphasized a low-cost design with more standard features.

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