Segmentation Resulting in a New Business Model
A leading industrial equipment manufacturer
RSG’s client faced a declining market position in a mature industry due to considerable competition from both a dominant industry leader and emerging challengers. Over the course of several engagements the RSG team first identified a significant shift toward consolidation in the industry that had resulted in heavy concentration of purchasing among less than 10% of potential customers. In addition, it quickly became clear that there were significant gaps in our client’s distribution and after-sales support network that left it poorly positioned to meet the needs of this critical market segment.
The RSG team then led a follow-up engagement to understand in more depth how our client could better meet the needs and purchasing criteria of this particular segment. This work formed the basis of our recommendation to form a direct corporate sales group as our client’s traditional dealer network was poorly equipped to target these customers in the sales process or deliver the required level of after-sales support. The insight of the RSG team that led to the formation of the corporate sales group, along with improved strategies for after-sales support services, has enabled our client to achieve significant market share gains within this segment and turn a weakness into one of its greatest strengths.