Management3 Automotive Aftermarket Business Partners

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  • 1. Introduction to:Management Three Results & Execution OrientedBusiness Strategy Consultants July, 2011

2. M3s strategy is to focus on customers, channels and market strategies in theAutomotive Aftermarket space, working for global or globalising clients Management Three at a glance Equity Partners Strategy Consulting Automotive Aftermarket Automotive Industry Wide IAM Innovation OES Emerging Markets& VM (Fiat Vice President) Marketing DeepMarco Neil Information TechnologyManagement3 Srl I.D. Results & Execution Oriented Business Strategy ConsultingIndustry Focus: AutomotiveSpecialty: AftermarketGeographic Focus: GlobalLaunched: March 2009Growth 2010/2009: + 180%Automotive AM Customers 2009-2011: 11Countries in scope of projects: Europe (>10); India; Middle East 3. Marco and Neil founded M3 based on a strong automotive aftermarket competence and started developing the firm as a global born start up Founders Professional ProfileMarco Bicocchi PichiNeil Fryer Languages Languages Italian EnglishStarted his management career in the InformationAutomotive industry career holding senior positions inTechnology and Services Industry with international ExperienceLucas, TRW, Bosal and Fiat Group Automobiles.business roles up to Marketing Director in EDSElectronic Data Systems, and VP Etnoteam where he20+ years experience in delivery of results inlead the start-up of Internet Consulting.Competence extremely competitive markets, often in adverseconditions, culminated in involvement in the turn-Management consultant with Ernst & Young workingaround of Fiat with Sergio Marchionne between 2004on Global Automotive programs, Principal with BoozFlexibility and 2008.Allen Hamilton Automotive and InformationTechnology practice recipient of the ProfessionalExcellence Award , Chief Marketing Officer with Speed Board member experience in large IAM distributor.Unicoop, Associate Director with AT Kearney.Held international and pan-European organizationMarketing, Strategy, Organization and InformationIndependentresponsibilities; strong capabilities of acting acrossdifferent cultures and in HQ to subsidiary dynamics;Technology; held senior management marketingpositions in business to business and business toJudgmentexcellent people skills; ability to develop the strongworking relationships needed to work successfully inconsumer. Active Business Angel board member ofstressful situations.different start-ups.AddedM.Sc. in Economics & Commerce, University of TurinValue B.A. in English, University of London (UK);MBA, Warwick Business School (UK)(ITA); MBA, Nyenrode Business School (NL) 4. M3 solid foundations are based on work done for automotive companies inthe past, adding significant value in different aspects of their business Founders Experience in the Automotive IndustryAutomotive Companies where Management3 Founders have project and management experienceExperience includes working and living in Europe, North America and Emerging Markets 5. We believe in using a combination of quantitative and qualitative analysistechniques and that go and see is a must do to define market strategiesPROJECT EXAMPLE: INDIAENGAGEMENT ACTIVITIESAPPROACHPrimary and secondary data collection data analysis and Data collection and analysis Primary Data Collectionreporting to address quantitative and qualitative dataneeds to satisfy engagement objectives. Extensive Secondary Data Collectionlibrary and web research has been performed including Data analysis and reportinglast 15 years issues of auto magazines published inIndia. In depth interviewsM3 Managing Partners personally performed a number of Top Management relevant interviews with Top Management representatives Associations Leaders of Vehicle and Components Manufacturers, Large Management along Value Chain Dealers, Independent Repair Workshops, Associations,complemented by local partners activities.Direct observationM3 Managing Partners visited relevant sites to gain a first Car repair workshopshand view of different representative situations in term of Parts logistic centersquality, approach and behaviors as far as the Parts and VM AftermarketServices value chain in India is concerned. A total ofabout 100 interviews, visits and observations wascompleted. 6. We work with a view on the big picture that influences the business ofautomotive aftermarket, but Automotive Aftermarket Economic Environment REGULATORY ENVIRONMENT DRIVERSTRADE COMPETITION EMISSION SAFETYINSURANCE LABOUR RESTRICTIONSLAW REGULATIONSREGULATIONS REGULATIONSREGULATIONS MACRO GEOGRAPHICOEM PARTS TECHNOLOGYREGIONAL LEGACY ANDVEHICLESQUALITYASSEMBLY FOCUSPLATFORMS / MODULES PART MODULESDECISIONS ASSEMBLYENGINEERING CHANGES PARTS MANUFACTURING LIFE CYCLEUSAVEHICLE MANUFACTURERS VEHICLESPARTSPARTSMANUFACTURERS NORTH AMERICA MANUFACTURING WARRANTYEUROPE and EU FOOT PRINTVEHICLES BADGES& BRANDS MAINTENANCEREPAIRPARTSand CAPACITYMANUFACTURING CRASH JAPAN and KOREA DRIVEN KMS SERVICE INTERVALSVEHICLESSALESAUTHORIZEDVEHICLESREPAIRS PARTS CHINADISTRIBUTIONOWNERS DEALERS WORKSHOPSDISTRIBUTORSIAM & USERS PARTS PARTS SALES FOOT PRINTBRASIL BANKS &CAR INSURANCEFINANCIAL COMPANIES INDIA and ROWCOMPANIES OES PARTS ECONOMIC AND FINANCIAL DRIVERS MARKETSFINANCIALCOST OFCOMMODITIES CAPITAL CURRENCY GROWTHMARKETSLABOURCOSTCOST EXCHANGESRATES SITUATION 7. ... we have also a pragmatic deep understanding of the complex aftermarketvalue chain and the multiple variables influencing one the otherAutomotive Aftermarket Services Demand and Supply Variables Influencing Costs and Market Share along the value chain INFRASTRUCTURE SPARE PARTS COSTS COST DRIVERSREPAIR BAYTECHNICIANPARTS STOCKDELIVERY WORKSHOP INVESTMENTS AVAILABILITY of(CAPEX) VOLUME (Economies of Scale)SPARE PARTS High(er)Vehicle BrandVehicle AgeSTOCKParts Brand(WORKING CAPITAL)RESOURCES COST to Perceived Quality of PartsSERVECustomer Service Experience Perceived Quality of Labor SATURATION PriceTimingLABOR COSTCompetition (OPEX Semi-Fixed)SERVICE MIX Low(er)PARTS COSTFast(er)Slow(er)(OPEX Variable)Time to delivery 8. Since M3 was founded several international clients have already engaged ourcompany to deal with complex strategic issues We deal with complex strategic issues . with a pragmatic yet rigorous fact based approachMarket Entry Managers experience Valuation New Geography Consulting approachPan EuropeanMarket Entry CommercialValuationStrategy OE to IAM Primary Search AUTOMOTIVE AFTERMARKET Field InterviewsSTRATEGIES Partners Delivered Price PositioningOES MarketData CollectionStrategy Multifunctional view Internationalisation Strategy Execution oriented 9. GLOBAL COMPONENT MANUFACTUREREuropean Commercial Policy SITUATIONThe client is a global component manufacturer and a Fortune 500 company with a leading position in the European IAMmarket willing to improve its commercial strategies, with particular reference to trade spending and pricing policies, for theEuropean market. M3 has been engaged thanks to its distinctive combination of automotive aftermarket industry and strategicbusiness consulting expertise to identify issues and propose solutions in a high-complexity and challenging environment. KEY ISSUESMANAGEMENT THREE CONTRIBUTIONS The client has undergone significant internal M3 conducted an extensive assessment of clients marketchanges in the last 15 years and has gained a practices and internal processes, through desk researchleading position in the European market that has to and field interviews, in order to highlight and prioritizebe further developed and protectedneeds for intervention. Intra-channel relationships within the distribution For this purpose M3 investigated:chain have been reshaped by the rise of largePricing strategies and differentials across 32 nationaldistributors and international buying groupsmarkets and branches; Pricing model is perceived to be a key issue but has Trade Marketing Promotion current practices,discounts, bonuses and incentive programsto be investigated in its fundamental drivers and Relationships within distribution chain, interviewingdynamics in order to understand how to balanceclients managers and customersdecision making between HQ and branches Clients competitive position in the European marketRESULTS Client have been provided with a fact based quantitative and qualitative comprehensive cross view of current situationgained also trough field research in the eight major European markets visiting clients and client organization A fact based recommendation to implement a business transformation aimed at addressing the challenges of Pan-European and International clients while managing a still relevant local domestic market of small players 10. LEADING BRAKE FRICTION MANUFACTUREROES Strategy and Account Management SITUATIONThe client is a leading friction materials manufacturer with a strong position in both OEM and OES markets but changes inmarket practices are impacting its market position and needed to be understood and addressed with a conscious structuredstrategic approach. The decoupling of OEM/OES sourcing was the main issue on the spot but other changes taking place inthe business model called to action. M3 has been engaged to support the client in the identification of key strategic dynamicsand success factors in order to align enterprise strategy to the on going changes and exploit areas of opportunities.KEY ISSUESMANAGEMENT THREE CONTRIBUTIONS Changes in the OEM/OES paradigm M3 has helped the customer in identifying and understanding impact of changes in business model and Architectural best practices: modularity and VM customer relationshipscommonalities vs. proliferation of variants As such M3s role was to: Service strategy models in the service business Prepare and lead meetings with VM clients to discuss(OES and IAM) and competition with VMs and othermarket view and supplier role;actors to capture market share in the AM services Highlig