Our assessment revealed the initial market area that the client had in mind was too limited and filled with pitfalls, leading to a second phase of work developing M&A strategy.
The Challenge
A conglomerate deeply involved in both the upstream and downstream value chains around the paint and coatings industry — from raw materials to end-market customers/industries — needed assistance developing their expansion strategy.
Already involved in oil & gas, chemicals, infrastructure, and other industries, the company felt they were in a unique position to connect end users and suppliers and to serve the paint and coatings industry from a global position of strength. They sought our guidance to understand the market landscape in Europe and North America.
Customized Market Assessment to Establish Potential Playing Field
Our team conducted a thorough market assessment, including trends, drivers, and unmet needs. Steps in the process included:
- Explored the size and dynamics of incumbents, along with typical profit profile (EBITDA)
- Determined the potential size of addressable market revenue
- Identified general market growth rates, historical and future (CAGR %)
- Defined growth drivers and key trends impacting the market (headwinds or tailwinds), along with rationale
- Identified regulatory trends and their potential impact
- Defined any major developments (i.e., black swans/discontinuities) that could impact future growth
- Determined the threat of product and/or application substitution impact and potential displacement technology
- Profiled major players, including SWOT analysis
- Identified the competitive dynamics associated with Michael Porter’s Five Forces analysis
The Results
ChemQuest gathered a global team of industry experts to explore the regions and analyze dynamics. Our assessment revealed the initial market area that the client had in mind was too limited and filled with pitfalls that would make expansion challenging.
Based on this assessment, our team recommended — and the client accepted — a second phase to explore an inorganic growth strategy in a single region that the company’s current infrastructure could support and nourish for future growth.