Growth Strategy for a Leading Mechanical Power Transmission Equipment (Couplings) Manufacturer
A leading manufacturer of couplings in India was losing market share over the years. The company had a patent on its key product – jaw couplings. While the company was enjoying the patented regime, other companies started manufacturing other types of couplings (disc, tyre, gear etc.) and became specialists in them. The company entered the non-jaw couplings market but met little success. Many unorganised players have come up, providing the couplings at prices much lower than that of organised players. Today the couplings market is growing at 25 per cent p.a. but the company is just managing to sustain a 15 per cent growth.
UC conducted primary research with different target groups to validate the various growth avenues for the firm. The focus of the primary research, apart from understanding industry size and trends, was to identify growth cycles, target markets, distribution channels and future strategies of key competitors. Strategies were defined for:
- Prevention of loss of market share in key product – jaw couplings
- Gaining market share in non-jaw couplings
- Contract manufacturing for foreign companies
- Outsourcing of processes which have low strategic importance, in order to reduce cost and be able to compete more profitably
- Evaluation of acquisition as a growth option to beat eventual consolidation in the industry
The client received strategy definitions for a number of areas.