Case Studies

Featured Case

Market Strategy & Competitive Research

Key Takeaway:
Western client needed critical competitive data on the China market in order to evaluate multiple Market Entry Strategies. East West Associates (EWA) conducted the Market Research on-the-ground in China and evaluated the data with the Company to determine which strategy best met its Financial, Strategic and Operational objectives.

Background:
Western Company designed, manufactured and distributed filtration products for the China/Asia Pacific energy sector.

The Company has manufacturing operations in the U.S. and Europe and a China-based Procurement and After-Market repair center. The Company sells through distributors in China/Asia Pacific and thus, does not have clear visibility on the Chinese market, competitors, and other critical data. Company's China/Asia Pacific customers are primarily China-based operations of Western customers.

The Company's sales have increased during the past 6 years but not at their projected rate. Since China's projected growth in the filtration business is very significant, the company decided to explore several Market Entry Strategies, including:
  • Acquiring a Chinese manufacturer or distributor
  • Partnering with a Chinese manufacturer or distributor
  • Subcontracting their manufacturing and developing an improved Sales & Marketing strategy, including hiring China-based Sales & Marketing personnel
Challenge:
The Company had no objective China market data to evaluate these scenarios and determine which Market Entry Strategy best meet their Sales and Operational goals in China.

Solution:
The Company and EWA developed a comprehensive list of information, which needed to be gathered in China. The Company and EWA evaluated this data to determine its effect on the Company's strategic plans and develop solutions to grow their China market. The Market Research was broken into 2 research phases: (1) China Market and Competitors and (2) Chinese Distributors. The data gathered was extensive and answered a number of questions, including:

China Market & Competitors
  • Identification of China-based competitors.
  • Procurement, Manufacturing, Sales & Distribution models of their competitors in China
  • Market size and growth projections for filtration products.
  • Chinese government's projected expenditures and policy directives regarding the Chinese natural gas industry and their impact on purchases of filtration products
  • Identification of each competitor's market percentage of the Chinese filtration market and product offerings
  • Market data on why the Western company's bid were accepted on some projects but rejected on other projects
  • Ownership, organizational structure and procurement personnel of potential China-based customers not currently supplied by the Western company
  • Whether their current China-based customers were buying from other suppliers, products purchased, and impact on the Company's current and future sales
  • Identification of prominent suppliers and subcontractors to the China filtration market
Chinese Distributors
  • Identification of other Chinese distributors, their client base, products distributed and Cost Model
  • Ownership and organizational structure of their current distributors.
  • Whether the owners of their current distribution firms have equity ownership in other competing distribution firms
  • Whether existing three distributors where implementing a strategic plan to manufacture and compete with the Western company
  • List of current customers for these three distributors and whether these customers competed with the products of our Western client
Result:
Based on the Market Research and Competitive information, EWA evaluated the data with the U.S. executive team to determine the business implications for the Western Company and the data's affect on their China strategic and execution plans as well as decide the Company's best Market Entry Strategy. As a result, the Company made the decision to acquire a China-based manufacturer.


Servicing China/Asia from Multiple Manufacturing Sites

Attempting to utilize a single facility in Asia to supply multiple countries can prove problematic due to non-tariffs barriers such as lead times to markets, tax rebates, and access to both domestic and international markets.

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