Background and Challenge

A global general aviation (GA) aircraft manufacturer had been experiencing significant declines in its annual deliveries for several years. Recent entrants had gained share during this time and continued to aggressively target the client’s core markets. Growth of the overall GA market had slowed and the market could only support a limited number of new product opportunities. The company had limited resources to respond to competitive threats across its diverse set of market segments. To solve this challenge, L.E.K. Consulting was asked by the company’s private equity owners to assist in developing the company’s first real growth strategy in more than 10 years.

Approach and Recommendations

Our team completed primary and secondary research, and then analyzed findings using its own extensive experience and expertise in the general aviation industry. We also worked closely with the client’s senior management to develop the following key outputs:

  • Market Forecast – Our team developed a comprehensive market segmentation and produced segment forecasts by volume and dollar value to prioritize the most attractive segments  
  • Customer Proposition – Our survey of nearly 1,000 recent aircraft purchasers developed an extremely rich data set of customer opinions by segment
  • Product Positioning – The team conducted conjoint analysis of the two attractive market segments and determined the specifications of maximum utility for aircraft by segment
  • Competitive Landscape – We conducted numerous interviews with competitors, competitor dealers, and customers to develop a clear picture of the client’s position
  • Strategic Options – We compiled the rich data set developed in the preceding modules and used this in a collaborative fashion with company management to develop:
    • An agreed growth strategy by market segment
    • A roadmap to execute the strategy

We presented a coordinated strategy for the client that focused on new product development but also included short-term revenue enhancement tactics. Based on three multi-scenario pro-formas, Our team ultimately recommended a complete overhaul of the client’s entire product line and strategic re-alignment. Our team recommended that the client seize an opportunity to strategically reposition itself competitively by focusing on the high-value, high-margin segments where it could effectively establish a beachhead and develop a platform for growth.

Results

The company moved forward with the strategy, part of which was the launching of new products. The first product launched was the company’s most successful product launch ever, selling out its full production capability in the launch year and helping to save the company financially. Our contribution is best summed up in a quote from the company’s CEO: “… continuing with the status quo was not an option. We had lost significant share to competitors and customers did not want to buy our aircraft. We brought in to analyze the market and recommended a new product strategy. Since then, we have re-entered the market with the products we suggested and reinvigorated our brand name. We have grown our sales and taken share from our competitors. Basically, over the course of two years, we went from dead last to leading the industry in growth."