Senior executives for a hi-tech equipment manufacturing company faced a major challenge. Their company is a leading provider of innovative machinery and expertise in advanced materials used within the LED (Light-Emitting Diode), solar energy and consumer electronics industries. Now the Board of Directors wanted to create new markets for a unique, alternative material that their machinery and intellectual property helps manufacture – which could spur demand for more of their systems from leading-edge component suppliers to the rapidly expanding mobile device market.
However, the executive team's knowledge of those dynamic new markets, and the supply chain for display and touch systems to the mobile devices market was limited. Millions of dollars of potential investment and opportunity cost depended upon their ability to determine whether this new market space was a viable opportunity for the company and, if so, validate their go-to-market strategy.
Broad Perspective, Specialized Expertise
In December 2012, the VP of Business Development and her research team turned to IHS Markit. They had previously used syndicated IHS Markit reports and now they wanted to tap into world-class IHS Markit content, tools and expertise to understand not only the smart mobile device markets – for smartphones, ruggedized tablets, televisions, computers, etc. – but also the materials and sub-assembly supply chain for related areas such as semiconductors, component technologies and mobile service providers.
Looking Inside the Supply Chain
The company enlisted the Technology group to achieve several objectives. Its business developers asked IHS Markit experts to find supply chain entry points and potential partners for introducing their new technology into the smart mobile device supply chain. IHS Markit was enlisted to analyze how this new material would compare to existing solutions in the market. They also asked IHS Markit to identify suppliers who might be interested in working with the equipment manufacturer to test their new materials capabilities. In addition, the company's researchers teamed up with IHS Markit experts to develop forecasting models to predict how quickly the new material might be adopted in various markets, based on comparative cost and performance analysis.
IHS Markit experts looked inside the $55+ billion global market for mobile device displays and touch systems to provide insights into production details and projected revenue/unit growth of key modules and systemcomponents used in advanced LCD and OLED displays as well as touch-panel modules
Two-Step Approach to Validation
Collaboration between the company's researchers and IHS Markit proceeded in two complementary phases:
- Education – high-level assessment of the market opportunities with Total Available Market analysis of specific display and touch-panel applications
- Exploration – research into "most likely to adopt" applications, including primary research conducted by first-hand interviews and surveys with major industry suppliers and distributors.
The company's researchers worked closely with IHS Markit experts to leverage existing research across a host of equipment markets and end-applications, from mobile phones and tablets to automotive displays and "point-of-sale" touchpads. IHS Markit experts looked inside the $55+ billion global market for mobile device displays and touch systems to provide insights into production details and projected revenue/unit growth of key modules and system components used in advanced LCD and OLED (Organic Light-Emitting Diode) displays as well as touch-panel modules.
The company obtained in-depth knowledge of supply chains for displays and touch-panel assemblies, as well as introductions to the global ecosystem of vendors who produce mobile devices and their component suppliers – all from IHS Markit.
Focus on Competitive Cost Analysis
The company's equipment manufacturing team was especially concerned over cost requirements in consumer applications, worried that ongoing price erosion and competitor's ability to continually cost reduce alternative materials might impede their market entry efforts. IHS Markit experts examined those costs and developed authoritative new estimates through equipment teardown analyses and industry benchmark data from around the world. IHS Markit performed a cost sensitivity analysis to generate forecasts that helped the manufacturer's team estimate overall system and component-level cost trends for the next five years in specific consumer and commercial mobile device markets. As a result, the company's decision makers could now evaluate cost sensitivity per component relative to competitors.
The equipment manufacturer also engaged IHS Markit to use its existing cost models and market research to build a customized cost-benchmarking tool. IHS Markit experts then helped the company's researchers learn to use it to estimate costs under multiple scenarios.
Validating, Refining, Advancing
By June 2013, the VP of Business Development had reported to the Board of Directors with the project team's findings. The Board asked questions, which the executive team answered (with help from IHS), and incorporated the analysis into a revised business development plan.
IHS Markit industry experts supported the marketing campaign's launch by arranging introductions and meetings with both potential partners and customers.
Today, the equipment manufacturing company is engaging industry partners with compatible manufacturing process capabilities and performing initial production trials. In 2014, the company's Board of Directors is looking forward to continued progress and the executive team is planning to continue relying on information and expertise from IHS Markit.