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Anticipating economic recovery, a leading industrial automation company wanted to seize the opportunity to gain market share. The Client believed that competitors were demoralized from significant layoffs, and therefore, were not aggressively pursuing the market. There were rumors that sales among some competitors were down as much as 40 percent from the pre-recession peak.

With order growth accelerating, the Client set a goal to gain significant market share and perhaps even change the structure of the market. The Client sought to identify competitive weakness in particular market segments and/or key accounts. It was also considering the potential benefits of acquiring one or more of its struggling competitors. Before investing in such business development initiatives, the Client engaged RSR to conduct a thorough assessment of the market landscape, to understand changes in the size, segmentation, and competitive environment.

Overview of RSR Engagement – Growth Blitz

Approach

Objectives

  1. Quantify the current market size and provide 5-year forecast by segment, by technology, geography and vertical market.
  2. Reassess growth drivers by segment, to identify opportunities in underserved markets and/or vulnerable competitive accounts.
  3. Identify potential acquisition candidates among struggling competitors.

Methodology

  1. Interview leading market participants to understand recent shifts in competitor’s market share, organization, or growth initiatives.
  2. Interview key customers to assess changes in buying behavior.
  3. Project weighted average unit and dollar growth, using secondary and primary research, to feed quantitative models.
  4. Screen potential acquisition candidates to determine, who if anyone, possesses valuable assets that can aid in the Client in future growth initiatives.

Results

Key Study Findings

  1. Market-growth is stabilizing, but changes in input costs and government regulations will lead to uneven growth by market segment.
  2. Two competitors have declined faster than the overall market, and their long-term viability in the market is questionable.
  3. Concerns were raised regarding the staying power of key suppliers due to their weakened financial condition and reduced field support services.
  4. Service is becoming more important as customers cope with their own staff reductions.

RSR Recommendations

  1. Target two specific segments, which are expected to account for the majority of incremental market in the foreseeable future.
  2. Rather than acquire a weakened competitor, pursue specific key accounts based unmet needs identified in the study.
  3. Emphasize financial resources, ease of maintenance, and service capabilities in future marketing materials, while de-emphasizing technological differentiation.

 

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