New China sales strategy boosts market share for intelligent battery charger company
A global battery charger company reorganized its sales divisions globally to be more efficient across its 4 business units and needed to reflect the changes in the China organization. The 4 business units were Consumer, Professional, Integrated Solutions, and Client Brand.
After the global reorganization, the China management team asked ARC Consulting to support with a review of the China business and current market conditions and make recommendations to develop a sales strategy for each business unit.
As the global organization was reorganized to bring more focus to the 4 business units, the China team saw the opportunity to review its current business and prepare to grasp the opportunity to become the national leader in battery management solutions by developing and selling innovative battery management solutions that are easy and safe to use. The targets that were set for the country were to grow market share to 20% with sales of 136,000 units by 2020, to achieve sales of $1MM per salesperson and to contribute at least 10% of the global revenue.
The basis for the project was to help the client answer the following questions:
- What? – What are the existing and future market potential?
- When? – How to prioritize and sequence activities?
- Where? – Which provinces or regions held the highest potential?
- How? – Sales strategy that will lead to the desired outcomes
To answer these questions, ARC Consulting performed internal and external research projects to gather qualitative and quantitative data to support the analysis. Internally, in-depth interviews with key staff members were conducted, and externally, data was gathered by researching published reports, doing field interviews with academics, government departments and organizations, studying competitors, and in general utilizing the wealth of experience and networks of ARC Consulting in the China retail and franchise markets.
The final report prepared by ARC Consulting was divided into several sections that helped our client have a clear picture of their business, potential and actions needed to maximize its market share. Key sections of the report are:
In this section, a general overview of the China’s economy was given, followed by detailed information and statistics about the automotive industry, broken into its key segments of passenger cars, engineering vehicles, trucks, motorcycles, and after-sales market. Based on this data, ARC Consulting consultants were able to estimate the market potential for each of the 4 business units and used this data to set the objectives for the organization.
A strategic marketing analysis was also performed for the overall business with a PEST (Political, Economic, Social, and Technological factors) and a SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis.
Identifying targets: City level analysis
It was important to define which cities were most attractive for our customer to focus on due to the significant differences between regions and cities. For this, 20 cities were evaluated based on their climate conditions, economic development prospects and availability of distributors to identify the key areas to be focused on. The analysis concluded that Tianjin, Beijing, Shanghai and Suzhou were the highest potential cities in China for our customer.
Channel to market analysis
After developing a good understanding of the market characteristics of the 4 business units, a study to examine the advantages of using Online vs. Offline and Direct vs. Indirect channels were explored. As a deliverable, a list of possible candidates for online platforms and distributors across the country was provided to the customer as a reference.
Competitive Benchmarking analysis
ARC Consulting identified 11 key competitors in the market and studied each one to provide key information about them, and their products and prices have been compared with our customer’s.
ARC Consulting recommended an implementation of sales plan to deliver on the key 2020 objectives for the China team:
- Grow market share to 20% with sales of 136,000 units by 2020
- Achieve sales of $1MM per salesperson
- Contribute at least 10% of the global revenue.
The key elements of the implementation plan were:
- Capture markets from linear chargers
- Educate first-time consumers to start using chargers
- Convince existing consumers and professional users
- Target key cities and large franchises
- Develop online store concept
- Increase marketing and PR activities
- Grow the organization
- Expand facilities
To make sure that the differences across the business units were addressed, a further analysis was done based on pricing strategies, economic rationale and market entry tactics.
For the financial analysis, the costs of the implementation of the plan were estimated in detail together with the sales revenue forecast until 2020. Based on this data, the project has the potential to deliver a 77.2% ROI by 2020 for our customer and enable them to deliver on their targets as agreed with the headquarters.
The recommendation by ARC Consulting was well received by the customer and the decision was made to move forward with its implementation.
The project was completed successfully with the following deliverables:
- A thorough market analysis by product line and by target city.
- A benchmark project of the competitors and a recommendation on the best sales strategy which included the organization to support it, costs estimations and revenue forecasts.
- The costs of the implementation of the plan were estimated in detail together with the sales revenue forecast until 2020. Based on this data, the project has the potential to deliver a 77.2% ROI by 2020 for our customer and enable them to deliver on their targets as agreed with the headquarters.