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Insights uncover untapped markets for handset manufacturer

Mobile-phone-manufacturing OEM increases market share by 20 percent in one year.

Challenge

Facing slower growth in maturing markets and increasing challenges from competitors, a major mobile-phone-manufacturing OEM asked McKinsey to help it develop a strategy to enter an underserved geographic market that the company targeted. The client’s objectives were clear and aggressive: Capture significant market share within four years.

Discovery

The McKinsey team set out to develop a complete picture of the new market with the intent on discovering ‘white space’—an untapped market opportunity—that the company could exploit. Team members analyzed buyer trends and identified implications for product development and the client’s competitive position.

Conducting a number of interviews with operators and prospective channel partners supplied insight into the consumer and distributor mind-set, which was augmented and confirmed by market-sizing and -segmentation analysis. Working from the other end of the value chain, the team performed an operational diagnostic in manufacturing and procurement to identify high-potential sourcing and production strategies to employ in the new market.

Synthesizing their comprehensive research, the McKinsey team developed a market analysis and business plan that could meet the client’s aggressive goals. The analysis highlighted a number of unmet needs in the targeted market, such as the potential to serve the higher-value segment of smartphones or enhanced features phones. Focusing on this area of the product portfolio would become the core of the client’s go-to-market strategy.

In addition, the team unearthed a number of insights that indicated the OEM’s brand was not viewed as particularly distinctive. This finding argued in favor of adopting a new brand strategy and messaging tactics to achieve quick market uptake and differentiation in the eyes of consumers.

To control costs, the team also developed procurement and manufacturing models that reduced costs and improved product reliability and availability on the intended launch date.

Impact

Less than a year into the plan execution, the OEM had increased its market share 20 percent, from roughly 21 percent to 25 percent. The OEM’s aggressive actions brought it within striking distance of both the market leader and its midterm market share goal.

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