Business strategy case

Client situation

• Leading European automotive aftermarket supplier
• Active as private label manufacturer generating high margins
• Experienced extensive growth through insourcing of third party production, which led to sales being doubled in recent years
• Shareholders focused on value creation

Important issues

• Due to the rapid revenues growth in recent years, our client was at a crossroad of further expansion versus sale of the business
• The client asked Solving IMCG to support its investigation through valuation of several strategic options, including production reallocation, further growth through means of geographical expansion and/or product portfolio expansion or divestments

Activities

• Market structure analysis of the automotive aftermarket
• Analysis of the main players’ strategies within the market
• Research of production reallocation and geographical expansion possibilities
• Development of several business scenarios, displaying the strategy’s midterm financial effects

Benefits delivered

• Valuation of each scenario
• Hypothesis confirmed that most value is created by further expansion
• Scenario analysis showed that production reallocation did not create value, unless if it is being sponsored