Challenges in the automotive industry – marketing and business strategy for a software company

Project context:

How to do business in a competitive environment with high product risk? It was a key question for us when we began working on a marketing and business strategy for a software company in the automotive industry. As we faced this challenge, we recognized that we were dealing with an extremely dynamic environment. Why? The sector is subject to continuous funding (€60.9 billion per year), and there is a growing need for green solutions and a drive to reduce CO2 emissions. All these factors are making the electric car segment grow stronger. If you are curious about how we reconcile the above knowledge with the latest trends, read the following case study.

Sprint 1: Kick-off workshop and automotive market data analysis

We started a collaboration with the client with a kick-off workshop to understand each other’s needs and expectations. While planning activities, we took into account all the client’s suggestions and the realities of the industry, such as the underlying production and constant changes. It allowed us to gain the necessary basis for creating a marketing and business strategy. The specificity of the domain in which we were to start our activities turned out exceptionally interesting.

The workshops became an opportunity to set realistic objectives for joint pursuit. One of the goals was to find a niche area for our activity. It was also important to point out any setbacks associated with, for example, the outbreak of the Coronavirus pandemic. According to data from LMC Automotive, in 2020, global demand for new light vehicles declined by 14%. Furthermore, out of the three largest automotive markets, the European market saw the steepest decline (20%).

Sprint 2: Research process – design of research workshops, conducting in-depth interviews and exploratory surveys

At this stage, we prepared the research workshop design. Following the strategy, we decided to conduct in-depth interviews and exploratory surveys with the target group. During the research, we tried to get to know the automotive industry and the problems experienced by people who work in this sector. This is what we accomplished:

• interviews with buyer personas,
• interviews with buyer personas
• in-depth interviews with the client team

We concluded that one of the primary needs in the Automotive industry is to modernize the support of company systems. It was also important to find suitable tools for data analysis and management and to optimize production costs, for instance.

Additionally, we determined that many areas lacked the automation that would make many processes much more efficient and streamline managing individual departments. 

Sprint 3: Analysis – interpretation, and validation of data collected during the process

Analysis of the data collected during the process was a decisive moment in creating the strategy for our client. The most important activities in this area were:

• market analysis,
• persona analysis,
• Unique Value Proposition analysis.

Based on the market and trend analysis, we learned that the growing automotive industry needs solutions offered by IT vendors, especially those with domain knowledge. It is primarily due to the need to streamline and manage the supply chain between manufacturers and customers (e.g., workshops). Therefore, the automotive market requires automation, especially in production and logistics management) and more efficient communication.

WIt is worth mentioning that according to the Deloitte report he electric car market in European Union, North America, and China is growing due to CO2 emission reduction policy and numerous development financing programs (reduced VAT rate, various subsidies). Observing this kind of dynamics allowed us to better match potential solutions that could successfully work in our client’s industry. As a result, we managed to validate certain hypotheses and prepare an effective tactical plan.

Sprint 4: Sprint 4: Identifying Competitive Solutions – competitor and benchmark analysis to determine problem-solution fit

Competitive analysis and benchmarking are some of the most essential tools that help prepare marketing and business strategy. We started with the identification of competitive solutions. We took into account the existing and proven solutions and the ones that have not been introduced in the market yet but could prove to be successful.  

At this stage, the tasks included:

• Analysis of the business model – what is already done and works well, and what needs improvement,
• Identification of Problem-Solution Fit,
• Competitive analysis and benchmarking.

The above-mentioned activities allowed us to understand that our client’s strengths are great knowledge of the industry, long-term experience, and world-class domain knowledge. We learned there are several niche areas in the Automotive sector worth exploring.

Apart from the analysis of the current situation in the automotive market, we did internal research and investigated, among other things, what it is like to work in the client’s team, taking into account the technological and business solutions used and the relations between co-workers. We wanted to correlate the target group’s needs and industry trends with the team’s capabilities. Comparing the client’s competencies with what competitors offer was an opportunity to draw interesting conclusions and find a direction worth pursuing.

Sprint 5: Validation workshop, mapping of business goals and KPIs with the client team

We know from experience that every strategy requires validation, i.e., checking whether particular actions actually lead to planned results. It is impossible to validate assumptions without testing them. We decided to map out the business objectives based on the research findings. We knew there would be both opportunities and threats, so we embarked on several activities that helped us better plan the next steps:

• SWOT
• a Validation workshop with the team,
• setting business goals and KPIs setting business goals and KPIs.

We performed the above tasks to see what obstacles we might face in moving forward. We determined, among other things, that in the absence of automation, the problem of employees being overloaded with too many tasks could arise. We also reckoned that scaling up could result in a decrease in the current quality of services offered.

Given the dynamic development of the automotive market in recent years, we decided that finding a niche for our client’s activity is the key to success. With this in mind, we moved on with the formulation of the strategy. Sometimes identifying market needs that can be satisfied is equally effective as an innovation.

Sprint 6: Defining a business model and marketing strategy direction

The final stage of creating the marketing and business strategy was extracting key findings from the 5 weeks of market and target group research and workshops conducted with the client’s team. 

Below are the elements that were imperative in the strategy for our client:

• Unique Value Proposition 
• Mission and Vision of the organization based on the Golden Circle,
• Key Selling Points
• market, target group, persona, and market positioning,
• sales and distribution channels, 
• brand communication strategy: messaging, communication channels, and activities, 
• homepage mockup,
• a business model based on Business Model Canvas,
• Roadmap and Balanced scorecard. 

With the tactical plan in place, we began preparing the implementation plan. We defined the tasks and assembled a team of specialists.

Carrying out the entire process allowed us to find the area where the client’s team should focus their efforts. The future of the automotive industry is happening right now, and now is the time to propose innovative IT solutions.

Outcomes and summary

The final stage of the collaboration was defining the Unique Value Proposition, which consisted of several elements:

• competitive analysis,
• interviews with buyer personas,
• Desk research.

The synthesis of these elements enabled us to propose an area where our client could be most successful. Given the demand in the automotive market and the target groups, we decided on a specific niche of electric vehicles and accompanying infrastructure.

Working with our client taught us a lot about the automotive industry. The project demonstrated how identifying the needs of a specific target group helps find a niche for the business. The bidirectional knowledge transfer with the client was also a valuable experience for us. Undoubtedly, we will remember this project as demanding yet highly rewarding. 

Project team, i.e. who was responsible for what

Author of the Case Study

Lidia Brzyska