$450M division of a $2B publicly traded company and manufacturer of commercial and consumer durable products strives to double the size of its addressable market.
Challenge: Company had spent the majority of its 30+ years serving a segment of the available market, mostly the result of distribution decisions but also product decisions. New leadership had a strong inclination that their products would be a good fit for an adjacent segment, which would effectively double the size of their overall addressable market. The company’s sales force and current intermediaries were incapable of “reaching” into the target segment and the company needed a way in. They lacked skills and resources to develop data needed to make decisions and quantify the strategic and economic value available, the operational model required to succeed and the products, pricing and market-shaping it would take to win in the new segment.
Double the size of the addressable market by strategically and successfully entering a new market.
Agreed Upon Solution: Move forward based on our findings, recommendations, and financial forecast that achieved the company’s goal for economic value creation. We supported execution in these critical areas:
Developed perspective on target market including competitive positions, product requirements, pricing and other determinants of profitability, and how to get in.
Entered with a key partner: Identified a target segment strategic partner and negotiated terms resulting in instant access to their established reseller network, critical insights to segment product design requirements, and a lower cost to enter.
Harmonized pricing across both segments overcoming significant differences in structures/rules, with the additional benefit of uncapping reseller margins in their traditional segment.
Harmonized product strategy across both segments to include products that can easily cross-over between segments, cross-over base platforms and unique products by segment as required
Conducted regular learning sessions and maintained operatonal continuity with internal leaders, market-facing employees, intermediaries and major customers during implementation.
For the most part, the names of our consulting clients and their financial results are confidential. We are happy to provide references upon serious inquiries.
Objective: Define and Capture More Addressable Market
Industry: Manufacturing, B2B and B2C Industrial and Durable Consumer Products
Current G-T-M Model: Direct, 1-Step (from Value-Add Distributors to Transactional Resellers including Big Box), and 2-Step Distribution
Company: Public Company, Middle Market Division
Executive Sponsor: Division CEO