The Client’s Challenge
The Board of a Global 20 Firm approached The Cohen Group (TCG) to prepare an independent, outside business case assessment of whether they should proceed with an internal recommendation to make a significant investment to penetrate the US market for military vehicles.
TCG Strategy
TCG provided the client’s management with a detailed quantitative and qualitative assessment of the military market (DOD), the non-tactical vehicle market (Defense and Homeland Security), and the export market to foreign governments (border guards, internal police, and militaries). The TCG team also modeled current and projected required numbers of vehicles and the capabilities sought by these target customers, as well as projected requirements in a post-Iraq environment. The assessment included the dynamics of the market, competitors, decision makers, and potential timing of a large procurement. Once the management had the assessment, TCG helped to prepare the presentation to the Board, which detailed the market analysis and outlined a strategy for market entry should the Board decide to proceed.
Execution
In order to complete the assessment, TCG gathered information from government and commercial sources. The TCG team made several trips with, and on behalf of, the client to meet with Army, Marine, and National Guard officials. TCG also suggested that the client form a partnership to pursue this opportunity, and thus provided advice on the benefits and detriments of teaming with various companies, met some potential partners, and incorporated the potential aspects of a joint venture into the market scenarios.
Result
Once the assessment was complete and the data analyzed, TCG found that the client’s internal product development group had drastically overestimated the size of the market and had misestimated the timing. As a result, TCG recommended that the Board not develop the new vehicle. The Board accepted the recommendation and credited TCG with saving the firm at least $25 million in development costs plus the unnecessary diversion of significant management attention.