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Introduction
The need for innovation and
progress does not come without a price. That price
sometimes can be millions of dollars spent or countless
man hours wasted on attacking a market without
developing the proper strategy. The need to identify all
the positives and possible pitfalls prior to execution
is essential in determining whether a chosen strategic
direction may live up to expected financial and
operating results. Detailed and fact-based financial
modeling tools are typically used to evaluate the
expected performance of a given direction.
Situation
A technology client of The
Shpigler Group had discovered that defense-related sales
were projected to increase over the coming years, and a
decision was made to develop a plan to attract a portion
of this growing market. Within the competitive landscape
existed a number of very well-heeled competitors. However, given the strong
product set that our client offered, they had reason to
believe that they would be able to withstand much of the
competitive effect.
Complication
One of the key trends that had to
be accounted for involved the increasing desire among
buyers to purchase fully integrated systems or bundled
products. Our client was very specialized and did not
offer any additional products that could be integrated
into one package. Also, to gain new revenue sources, our
client needed to address previously ignored
opportunities in civil aviation, maritime, and
international markets.
Research
During the engagement, analysis was done on
manufacturers of competitive products; key market trends
for our client’s current technology and future needs
were identified. The Shpigler Group determined that
other product standards were being developed rapidly and
needed to be addressed with newer product features.
Additional research was completed on possible complementary product
lines that could augment our client’s product portfolio
either through acquisition, development, or a
partnership with another manufacturer.
Analysis
In order to utilize the results of the research effort,
The Shpigler Group developed a market analysis tool that
quantified the specific sales impact that could be
expected given the industry dynamic. Competitive
effects, buyer behavior, and pricing and bundling trends
were evaluated and quantified to illustrate the market
potential given different strategies.
Problem Solved
After conducting the research, it was clear that the
best strategy for our client was to develop a series of
strategic partnerships to round out their in-house
product portfolio. By combining forces with developers
of complementary product lines like cockpit display
systems, our client was able to compete effectively with
larger competitors that were able to deliver on the
entire value chain to customers. In addition, an
acquisition target was identified and a successful
purchase of a division of another company was completed.
The client was also advised that they should look at
expanding their product set to upcoming requirements and
newer standards.
Result
The client has followed the strategic plan that The
Shpigler Group developed and was able to increase their
annual sales by over 70% within two years. Sales to new, previously
untapped international markets have been realized, and a series of large
military contracts have been awarded.
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Benchmarking
Economic Development
Feasibility Studies
Financial Analysis
Market Analysis
New Product Strategy
Pricing Analysis
Strategy Development
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