Corporate strategy development for aftermarket auto parts supplier looking to address adjacent markets
We helped a client identify and size adjacent market opportunities to prepare it for mass adoption of electric vehicles.
Results and Impact
Working alongside our client, we identified $60M in addressable growth opportunities in adjacent markets that prepared the client for a world shifting toward electric vehicles (EVs). Opportunities identified considered wide spectrum of filtering criteria, including expected impacts from nascent technologies, supply chain constraints, brand reputation and channel access. Our work also included detailed pro-forma financial projections and was used to inform acquisition activity that began within weeks of the engagement's conclusion.
Client operated in a narrow vertical of the automotive aftermarket, selling product direct-to-consumer and through 3rd party owned retail channels. Controlling large share of its core market, the management team desired to diversify the business and build a case the convince the board to pursue high potential M&A opportunities. While not directly impacted by migration away from internal combustion, secondary effects of vehicle electrification created urgency in examining new market opportunities.
Our team started with a series of management team interviews to establish clarity around the goals of the program and the current state of the business. Once this was established, our team used its internal automotive expertise and the input from outside experts to create a list of high potential markets to be evaluated by the client team.
Once this list was prioritized, we sized and segmented the markets in both retail and wholesale dollars. We then developed data-backed assumptions around addressability of these markets, resulting in detailed 5-year pro-forma financial projections. We left our model "behind" with the client so they could adjust input assumptions as information became available so they could refine projections.