Despite a growing market, a UAE based leading automotive company was facing diminishing sales in the domestic and international market for the last three years. The company was having a wide portfolio of auto parts - 43 brands and 10,000 plus SKUs - and selling it through 1200 plus distribution partners in 100 plus countries. The company engaged IKON to address the growth issue and recommend a turnaround strategy. Also the company was seeking help in strategy implementation and building organizational capabilities.
Approach & Recommendations
To identify the root causes of the issue, we started with the diagnostic study. We conducted a thorough analysis of the company’s current marketing & sales strategies, including analysis of sales data and relative performance of each brand and product categories across different geographies. Furthermore, few interviews of top management and key officials had been taken to gain their perspective on the issues. In addition, we performed a market assessment to identify growth opportunities in the international markets, to understand retailers perception about the brand and analyze the company’s competitive position.
We identified numerous issues, particularly in the current marketing strategy and the organizational capabilities. For instance, the company was having a weak positioning in few highly growing markets against competitors and that's what switched the key customers to competitors. Apart from improper allocation of resources for branding, distribution channel and promotional activities, we found that the sales force effectiveness was limited by sales support, decision power, and tools.
We then set out to fix the issues, beginning with redefining target markets and the brand positioning. Marketing mix models were optimized keeping more focus on pricing which was set for different brands and geographies, marketing communication strategies, adding digital channels to change the perception of customers about brand and generate business leads from targeted geographies. In addition, we had fine-tuned the sales process and tools to improve effectiveness of the sales force. Moreover, the marketing organization structure was redesigned with defined roles & responsibilities of the team.
For effective execution of turnaround strategy, we developed an implementation plan and supported our client for more than 100 initiatives over 6 years. Our support included:
Within one year of strategy implementation, the company regained a few lost customers and export sales increased by 17% recovering the losses of the last three years. The growth continued consecutive years with increasing market share and opening new markets. The company realized an improved market position over the period of time and the transformation from a traditional organization to a professionally managed organization over a period of time.
Note: We are committed to clients' confidentiality. So their names have not been disclosed, but the results are real.