PP&A Case Study
Automotive OEM Expands into Industrial Motor Market: A Strategic Analysis Case Study
How PP&A Helped a Leading Automotive Manufacturer Evaluate Cross-Industry Growth Opportunities
Approach

PP&A implemented a three-pillar analysis framework to thoroughly evaluate the expansion opportunity: 

Market Landscape Analysis 

  1. Conducted detailed segmentation based on motor speed and operating capacity ranges 
  2. Mapped market applications to identify specific opportunities 
  3. Quantified market size in terms of revenue and unit volumes 
  4. Analyzed competitive landscape and market share distribution 

Pricing and Cost Analysis 

  1. Developed comprehensive unit cost profiles for different segments 
  2. Established price target benchmarks for competitive positioning 
  3. Created detailed lifecycle cost analysis for various applications 
  4. Compared cost structures between automotive and industrial applications 

Technical Requirements Assessment 

  1. Documented detailed performance specifications for industrial applications 
  2. Analyzed design life requirements across different use cases 
  3. Mapped speed range requirements for target applications 
  4. Identified application-specific technical requirements and challenges
Client Situation

A prominent automotive Original Equipment Manufacturer (OEM) specializing in high-speed motors and drives identified potential opportunities to expand its product portfolio into industrial applications. The client's initial analysis suggested that its automotive motors might offer superior cost-performance ratios compared to existing industrial solutions. However, as an automotive-focused manufacturer, it lacked comprehensive knowledge of industrial motor requirements and market dynamics. 

The client faced three primary challenges: 

  1. Understanding the specific operational requirements and performance standards of industrial motors 
  2. Evaluating the true market opportunity across various industrial segments 
  3. Determining the feasibility of translating their automotive expertise into industrial applications 

To move forward confidently, they needed detailed insights into the market size, growth potential, competitive landscape, and technical requirements specific to industrial motor applications.

Results

Our analysis revealed several key findings that helped the client make informed decisions about their market expansion strategy: 

Market Opportunity Assessment 

  1. Identified significant differences between automotive and industrial motor requirements 
  2. Discovered that expected cost benefits from economies of scale were less substantial than initially hypothesized 
  3. Located specific niche segments where automotive technology could be successfully adapted 

Strategic Recommendations 

  1. Provided detailed evaluation of investment requirements for market entry 
  2. Outlined potential risks and mitigation strategies 
  3. Identified specific performance modifications needed for industrial applications 
  4. Created a prioritized list of target market segments based on potential return on investment 

Implementation Roadmap 

  1. Developed a clear framework for evaluating market entry decisions 
  2. Established performance benchmarks for product development 
  3. Created risk-adjusted financial projections for identified opportunities 

While the broad-scale market entry opportunity proved more challenging than initially anticipated, our analysis helped the client identify several profitable niche segments where their automotive expertise could be successfully leveraged. This enabled the client to make data-driven decisions about resource allocation and market entry strategy, focusing their efforts on the most promising opportunities while avoiding potentially costly missteps in less suitable segments.

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About PP&A

At PP&A, we are dedicated to empowering businesses to excel through strategic innovation. We integrate deep industry insights with comprehensive analytics to develop bespoke solutions that propel growth and enhance performance. Our services encompass a broad spectrum, including:

  • Strategic Research
  • Business Strategy
  • Mergers and Acquisitions
  • Technology Solutions
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