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Unlocking growth in a stagnant B2B distribution company
Our client, a B2B distribution company, experienced a five-year period of stagnant growth. While seeking a deep understanding of its markets and a new growth strategy, the company’s leadership had the feeling that a competitor – boosted by a private equity investment – was gaining market share, yet this wasn’t obvious based on public information.
Challenge
Our client navigated in a consolidated competitive landscape with a fragmented customer base. The leadership wanted to identify which positioning they should pursue, and how they could compete with the market leader who was vertically integrating. For this reason, our client required an accurate, data-driven competitive and customer analysis, before defining its strategy.
Our client shifted its perspective from focusing solely on revenue to understanding that the competitor strategically placed cheaper, higher-margin products, impacting volume share rather than market share (turnover).
Approach
The market research involved three distinct phases:
Market size and trend analysis: the main goal of this phase was to get a clear picture of what was happening in the market. We examined the market size and its trends. Simultaneously the risks and opportunities were studied.
Competitive landscape assessment: this phase looked at how our client and key competitors differentiated themselves. We compared them by looking at their organizational structure, logistics model and offering.
Customer insights and segmentation: in this phase, we deployed analytics to map customers geographically. We also examined customer expectations and needs and the factors influencing loyalty.
To execute these three phases, a dual approach of quantitative and qualitative analyses was adopted. Ten distinct quantitative analyses were conducted across eleven databases (financial, geographic, customer preference, etc.), containing information spanning across the entire value chain. Simultaneously, a series of in-depth interviews and focused group discussions were conducted. These interactions engaged employees, customers, potential customers, and former competitors.
Finally, we leveraged our AskAldo solution “Voice of the potential customer” to survey hundreds of potential customers. Insights generated included delivery frequency, choice of supplier and competitive perception.
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Impact
Our client shifted its perspective from focusing solely on revenue to understanding that the competitor strategically placed cheaper, higher-margin products, impacting volume share rather than market share (turnover).
The revelation that the customer base primarily comprised smaller, declining clients, while competitors were attracting increasing market segments highlighted a risk that needed immediate attention.
An additional key insight surfaced regarding the operational and logistic model, where the competitor's different approach provided a competitive advantage: through the right combination of rapid availability of goods and an extensive range of SKUs, competitors were able to successfully capture specific market segments.
