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A leading aerospace equipment and system supplier is trying to increase the control content it manufactures on commercial aircraft. One option for achieving this is to develop a critical aircraft control product line that it currently sources from another supplier. Before proceeding further with its product development efforts, the Client needed to assess the economic viability of investing in the new product line. Developing the product would require an investment of millions of dollars in non-recurring costs associated with research and development, prototype design, certification, and acceptance testing. The cost side of the business proposition was fairly well known. The revenue side of the equation was the great unknown. The Client needed to assess whether there was enough business potential to support the investment.

Problem

  • The Client needed to assess OEM customers’ interest in purchasing the proposed aircraft control product on new and existing aircraft.
  • The Client needed this assessment to be conducted “blindly” without revealing its identity as the Client presently has a sourcing arrangement for the product.
  • Customer purchasing behavior was inconsistent, with some purchasing control components directly and others preferring to purchase integrated control systems.

RSR Approach and Methodology:

  1. Market Assessment – RSR contacted industry insiders familiar with production rates and product pricing for all production and development aircraft, including large commercial, regional and business, and military fixed wing aircraft. RSR then identified which programs would be available to the Client if it introduced the product. RSR made this determination by assessing which new programs offered realistic opportunities to new suppliers and which existing programs might consider retrofitting the product. From this assessment we determined the potential available market for the Client.
  2. Customer Analysis – A critical part of the analysis was an assessment of customers’ satisfaction levels with their current supplier base. RSR identified several customers who were dissatisfied with their current suppliers, and provided specific details on the sources of their dissatisfaction. In addition, RSR generated detailed insights explaining why some aircraft OEMs preferred to purchase integrated control systems while others did not, and how this issue affected the market opportunity available to the Client.

RSR Marketing Solutions conducted in-depth interviews with key purchasing, engineering, and support contacts at each customer. RSR is exceptionally capable of engaging industry experts in candid conversation, learning the inside story behind markets, customers and competitors.

Results

  • RSR quantified the market opportunity and determined potential revenues available to the Client by market segment and individual program.
  • RSR assessed customers’ satisfaction levels with existing aircraft control suppliers and their interest in seriously considering new products and/or new suppliers.
  • RSR assessed customers’ interest in purchasing from an integrated system supplier.

From this analysis, the Client determined the market was too small to pursue. Specifically, RSR determined that it would take a minimum of three to five years to receive a significant order. RSR also determined that although several customers were indeed dissatisfied with the overall support provided by existing suppliers, that the support was improving and suppliers were increasingly getting long term product and support contracts. Thus, based on the intelligence and insights provided by the study, the Client decided to halt its efforts to develop this product line and shift its product development focus elsewhere.

 

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