The client, a leading automotive technical textile manufacturer, wanted to assess the opportunity for 3 product categories, including automotive soft trims, and understand how they should go about it. The project entailed developing an action plan for market entry for each of the products. Firstly, the target customer base was to be determined. Next step was to identify how the client’s product would be differentiated from existing products in the market, to establish a clear value proposition. Following which a new pricing strategy was to be devised. And lastly, to identify the marketing and distribution channels which the client can use.
The analysis started by looking at each of the three categories our client wanted to enter in and identify the customers and key players in each. We established a competitive landscape and timeline for companies entering into the categories to get an idea of the number of competitors, the structural and institutional factors prevailing in the market and supply-side gaps in the industry. Then, we looked at the supply of each product in the market. For example, we found that for one of the products, a majority of the demand was satisfied by 2-3 key players. Others were used as secondary suppliers to reduce the supply chain risk in case the major players fail to cater to the demand.
Next, we estimated the addressable market size for each of the product categories based on the firms’ production capabilities, and the industry’s growth rate. We also looked at other important factors such as financial capabilities and Market infrastructure to determine the beneficial opportunities which would serve as growth drivers for the business. We judged each of the products (including automotive soft trims) on threat of competition, entry barriers and financial factors such as capital expenditure required, additional capabilities to be built and joint venture requirements. Our analysis revealed one of the product markets to be a highly risky, while the other two were profitable, one in the short term, other in the long term. Further, we also presented to the client the market sizes of other products in the category with their addressable market sizes.
The client was able to use our recommendations and findings to decide which market category to enter. We also generated a comprehensive market entry plan for the third product category.