Introductory Information: The client was a division of a multinational Tier 1
supplier to the automotive manufacturers, supplying computerized diagnostic equipment into the service garages. Profits
were declining, existing products were increasingly becoming commoditized, and there were no new viable products on the horizon.
The top-line revenue from the division's North American business alone had dropped more than 70% over the previous 5 years.
The Challenge: While the company's existing equipment was widely
recognized as "best-in-class," smaller start-up companies were entering the market with lower end tools and capturing
an increasingly significant share of the market. The company needed a new product that could provide it with a
competitive advantage...enough to justify a healthy margin in order to restore the division to profitability. And with
the increasing commoditization of its core business, it needed to find a new niche to dominate.
Recommendations: After performing a detailed market study, including customer visits,
round-table discussions with industry leaders, and detailed data analysis, we discovered that one of the leading
causes of customer dissatisfaction and warranty expense for automobile manufacturers was related to noise and vibration problems
with new vehicles. Customers would return to the dealerships, complaining about a noise or vibration, but the technicians
either could not identify the source of the vibration, or the technicians could not isolate and fix the root cause to
the customer's satisfaction. However, years earlier, at the request of a single automobile manufacturer, this company
had custom designed and built a computerized tool to accurately identify the specific vehicle component causing the vibration.
With only a moderate amount of engineering effort, this custom tool could be made to address a much wider market, thus providing
a solution where none existed previously.
Results: The tool was
rolled out at several automobile manufacturers to their engineering departments, manufacturing plants, regional service advisors,
franchised service garages, and others. Data from one pilot study showed a complete Return on Investment within 7 months.
The tool captured many international awards for innovation, design, value, and functionality. To date, the tool
has been deployed in North America, Europe and Asia, and dominates the market for noise and vibration analyzers, thus accomplishing
the objective of providing a new high-margin revenue stream for the division.
