This is a structured growth strategy case with three distinct parts: brainstorming growth avenues, calculating market share potential for DIFM expansion, and recommending validation activities. The case tests creativity in identifying opportunities while remaining grounded in market analysis and testing methodology.
Our client, KLE Capital, is evaluating the acquisition of company ABC, a leading branded manufacturer of high-performance automotive aftermarket engine air filters, which prevent abrasive particulate matter from entering an engine’s cylinders. All internal combustion engines require some form of an air filter. ABC’s product improves a vehicle’s performance from baseline and lasts upwards of 5 times longer than standard air filters.
ABC’s primary sales channels include large retail auto parts stores (e.g., AutoZone, Napa, etc.) warehouse/club stores (e.g., Walmart, Costco), auto repair shops, and e-commerce (e.g., Amazon).
While ABC primarily serves the do-it-yourself (DIY) channel, it also has a small presence in the do-it-for-me (DIFM) channel (where auto repair shops installs the product for the consumer).
KLE Capital is interested in assessing opportunities to grow ABC post-acquisition.