Go To Market Strategy Case Interview Questions - Market Strategy for Two-wheeler Automobile Manufacturer

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Go To Market Strategy Case Interview

Market Strategy for Two-wheeler Automobile Manufacturer.

Interviewer: Our client is a two-wheeler automobile manufacturer. It wants to enter the EV industry. Please help them identify whether they should enter the market. If yes, help them with a strategy to do so. 

 

Priyanka: To get a better understanding of the problem, I would like to understand the business context better. 
Interviewer: Yes, please go ahead. 
 

Priyanka:  I would like to understand, what is the client’s motive behind entering into this industry. Are we looking at capturing the market share, earning profit or something else?  
Interviewer:  The client wants to understand if the market is attractive or not. Basis that it will decide its next step. 

 
Priyanka:  Which geography does our client manufacture and sell in? 

Interviewer:  The client is an Indian player and manufactures the two-wheelers only. It has several manufacturing plants in India. 

 

Priyanka:  Also, is it fair to assume that the client wants to enter the EV industry in the two-wheeler segment itself? Also, does it plan to expand globally or focus on the Indian market? 

Interviewer:  Yes, the client wants to enter the EV space in the two-wheeler segment in the Indian market itself. 

 

Market Attractiveness 

 

Priyanka: I would like to explore the following: 

  • Current scenario of the EV two-wheeler market in India 

  • Expected CAGR of the next 5 years 

  • Market penetration of two-wheeler EVs  

Interviewer: Ok please start with the analysis of the current scenario of the EV two-wheeler market. 

Priyanka:  There is an increase in environmental awareness which is boosting EV adoption.  

But there is a lack of charging infrastructure in India as compared to other countries like China, Europe, etc. However, there is huge support from the government for EVs as there is a plan to move to 30% electrification of vehicles by 2030. There are several tax exemptions as well.  

India does not manufacture Li-ion batteries which is one of the most important components for EVs, so we have to import all of them. This adds to the high costs of EV batteries. 

 

 

Market Sizing 

Priyanka: Let us also do a market sizing here to access if the market is attractive. 

Interviewer: Ok you can tell me the approach, no need for numerical calculations. 
 

Priyanka: I will assume India’s population to be 1.3 crore and assume the average household size to be 4. I will remove the rural segment as they will not be able to be adopting EVs due to high pricing and lack of infrastructure. I will look at the urban segment and divide it further into Upper Class, Middle Class, and Lower Class. 

Again, the lower s will not be able to afford EVs as it is charged at a premium price. We will look at Upper Middle and Upper Class to adopt EVs. Upper Middle will also prefer EVs as there are several tax exemptions and even companies are encouraging EVs as part of CSR initiatives. From the upper middle and upper class, we will assume a certain percentage who will adopt EVs. Then we will assume the average life of an EV to be 5 years. 

 
Interviewer:  The sizing approach looks good. Now let’s look into the firm capabilities to analyse whether we should enter or not. 

 

Priyanka: The primary capabilities required by the firm would be: 

  • R&D: The firm will invest some resources for proper R&D to gain long-term benefits. 

  • Manufacturing capabilities: Here we need to analyse if we need to set up new plants to manufacture EVs or if we will update the existing ones. 

  • Supplier relationship: The firm can utilise the existing supplier relationship to procure components for EV manufacturing like batteries at competitive prices. 

  • Marketing & distribution: The marketing team will have to pivot itself to EV while also ensuring it is not cannibalizing the sales of existing automobiles sold by the firm. The existing brand equity can also be leveraged to sell EVs to existing/new customers. 

 
Interviewer: Ok that would be all. It was a great discussion. Thank you.  

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