Services for Manufacturing Clients

Our deliverables are at times reports, presentations, and/or negotiation assistance; and at other times training programs.  Examples of some of the topics we have addressed are provided below.  In some cases these efforts are conducted entirely by STG professionals; in other cases, we utilize the skills of individuals drawn from our extensive database of industry-specialized consultants. 


Businesses retain STG to obtain one or more advantages.  Their reasons typically include:  


·  to obtain knowledge and skills not possessed in-house. 

·  to focus resources on a particular problem to resolve it in a timely manner. 

·  to take advantage of an independent viewpoint . 

·  to obtain market intelligence while preserving anonymity.

EXAMPLES OF SERVICES PROVIDED TO MANUFACTURING CLIENTS

Heating and Air-Conditioning Markets

This STG study used a combination of reported data and interviews to provide quantitative and qualitative understandings of the US market for heating and air-conditioning products, and changing direction and influences that are causing the changes.  


Findings were provided for each of eight market segments including gas furnace, boiler and other heating systems; and Unitary Air Conditioners (both Single Package and Split Systems), Room Air Conditioners, Heat Pumps, Large Tommage Liquid Chillers and Other Cooling Systems.  Our approach to the analyses reflected the amount and quality of data available for each segment.  

To supplement published data and reports, we conducted a series of telephone interviews with 35 HVAC contractors in 16 states where air conditioning and heat pump systems are commonly used to obtain local perceptions of issues affecting the market for these types of products, and attitudes toward a possible gas-powered heat pump.  Major issues addressed in these interviews include identification of typical system sizes, preferences for a single heat pump system versus a combined air-conditioner & furnace system, brand preferences, reactions to the idea of a gas-fired heat pump, and historical observations. 

Competitive Assessment of Solar Panel Technology

From about 2008, a large number of new panel suppliers entered the solar panel market.  The market rapidly swung from a supply shortage at the start of that period to a surplus due to the combination of reduced demand (customers waiting for Congress to decide about tax credits), falling energy prices and the slowing economy of the Recession.  Implications for the post-2010 period remained uncertain as the effect of these many influences was not well understood. 


Our client sought to understand the possible positioning of their PV technololgy in this emerging market. STG provided an explanation of the market (including competitive positioning and distribution practices of current and emerging competitors) utilizing both published sources and interviews to obtain the required information.  We were able to identify shortfalls in the client’s product that would have reduced its competitive postioning.  They decided not to procede which turned out to be a wise decision in light of the panel glut and prices drops that developed within a few years following our study.

Microturbine Market Assessment

In the late 1990’s, a number of manufacturers (led by Honeywell and Capstone) began to anticipate a major market growth in microturbines.  These are electrical-generating units with outputs in the low 10s of Kilowatts to a megawatt or more typically fueled by natural gas or a variety of other liquid or gaseous fuels (including landfill gas). Microturbines are essentially like a small jet engine connected to an alternator or generator; as such, they provide both an electrical output and heat discharge.  Depending on how the heat is used, thermal efficiencies of over 80% are achievable.  


But by the target year 2000,  the market simply wasn’t ready to buy microturbines in anything near volume sales. While Capstone and Honeywell began delivering production quantities of microturbines to energy service distributors at that time, few went directly to end users.  Additionally, other microturbine makers experienced a variety of technical and financial problems that prevented them from becoming  commercial realities.  A joint venture to develop a turbine for the auto market collapsed. 


To better understand the dynamics of this cycle and whether the future was more promising, a manufacturing client commissioned STG to study the factors that led to the rise and decline in this earlier cycle, the participants, and to identify what market (and competitive) drivers to watch for as it monitored developments. 

Review of the Power Mobility Aids Industry

“Powered Mobility Aids” refers to electrically-powered wheelchairs and mobility scooters.  As with most consumer goods, the market for powered mobility aids is driven by a combination of economics, demand, technology, and creativity; unlike many consumer markets, it is also driven by health care funding policies, product (design) regulations and regulations surrounding possible uses (e.g., bus accessibility and latching standards). The community of mobility aid users is larger, active, and vocal—and growing.

  

In order to better understand the drivers and competition in this business, a manufacturer assessing opportunities for its own products retained STG to provide a review of the market. Our study provided user demographics, a history and expected outlook of regulatory changes, a summary of technological developments (existing and forecast), competitive positioning of existing suppliers, and a market outlook.  

The Future of Aviation Gasoline (Avgas) in the United States

Avgas is the last transportation fuel to contain lead.  It remains such as there is no alternative product that can provide a “drop in” replacement for this fuel for all 150,000 piston-engined aircraft in the United States. To better understand this market and its implication for a possible piston-engine development program it was considering, this manufacturing client requested STG to provide a review of the Avgas market, including both user segments and supplier industry.


The first portion of our report described the size of the market, the variation in fuel requirements for different engine (and aircraft) sizes, and the petroleum companies that compete in it. In the second part, we provide information on the various grades of avgas that exist and that are under development, as well as summary information on sulphur content and other physical properties, as well as industry specifications.  We were able to direct the client’s study team to both published and on-line reports with extensive technical details on the fuel’s properties. In the final part of our analysis, we described key issues that had arisen as the aircraft and petroleum industry had sought (and were seeking) alternatives and the reasons why uncertainties continued to dominate any consideration of the future characteristic of general aviation (GA) fuel.  

The Outlook For Two-Cycle, Air-Cooled Engines In Selected Recreational Vehicle Markets

This study examined the outlook in North America for two-cycle, air-cooled engines in selected recreational vehicle markets.  The project team identified and projected markets for such vehicles, determined functional requirements of the engines, and recommended a business strategy for North American markets.

Markets for Residential Gas Leak and Carbon Monoxide Detectors

This study was undertaken to address four major client concerns:

· The adoption rates of gas leak and carbon monoxide (CO) detectors in residences and the reason rates may be low

· The reliability of existing gas leak and CO detectors for the residential market

· The reasons that gas leak detectors are only “recommended”

· Statistics on US domestic accidents / incidents related to fires/explosions caused by gas leaks and CO poisoning.


We confirmed that the two products (residential gas leak detectors and CO detectors) were at very different levels of market acceptance. Gas leak detectors were not widely installed and awareness of these products is very low.  Conversely, CO detectors had been mandated in residential dwellings and consumer awareness of their need was growing.


Our research identified the public perception that gas leak detectors were not needed for several reasons.  First, gas utilities scent natural gas so gas leaks could be quickly detected by consumers.  Second, in case of a leak, public safety programs have for decades educated consumers about what to do in the event of a (detected or smelled) gas leak. Third, building codes have been developed requiring extensive ventilation in areas where gas appliances are located to avoid gas build-up.  Fourth, and as a result of these other reasons, the number of deaths and injuries due to natural gas leaks in residential environments was relatively low and therefore the perceived need for gas leak detectors remained low.   In addition, on the supply side, there do not appear to be many gas leak detection products for consumers, and those that exist reportedly are hard to locate.  Therefore, consumer awareness of gas leak detector availability is very low. 


Interest in CO detectors was very different.  Carbon monoxide detectors were introduced in the late 1980s and were initially well received because of the significant number of deaths and injuries attributed to CO poisoning. CO alarm sales grew until the late 1990s when product failures and the lack of product improvements eroded consumer confidence in these alarms.  Consumer frustration led many consumers to disconnect their existing CO detectors and avoid replacement of defective or old CO alarms.  Nonetheless, high profile CO poisonings and deaths have led to a renewed interest in (and requirements for) CO detectors;  numerous states passed legislation mandating CO detectors in residential dwellings.  At the time of our study, enforcement of the new laws had been lax in the 10 states that had mandated CO detectors and consumer awareness and compliance were reportedly below acceptable levels.  Based on our analysis, we identify five drivers for adoption of these devices.

US Market for Small Generators

Small generators are a combination of a small (typically) gasoline engine coupled to an electrical generator with a ability to output (commonly) between 2 and 8 kilowatts of electrical power on a continuous basis.  These units have a wide variety of industrial, commerical and consumer applications.  In two interrelated studies, we developed an overview of the market as a whole, and undertook an in-depth competitive assessment of a key competitor.  


The first study provided a market overview, identifying manufacturers and products, product and customer segments, sales (by market share and segment), individual competitor strenghts and weaknesses, and a sales and market forecast (again, by segment). The second study focused on a competitor which was rumored to be a possible spin-off candidate from its then owner.  Our research into their history, internal structure, product lines, and our interviews with dealers throughout the U.S and investment bankers revealed certain strengths and weaknesses associated with the company and its major product line. Those included such factors as:


Strengths

· Powerful multi-disciplinary engineering

· Innovative product designs

· Custom design capability

· Broad production capabilities

· Modern facilities 

· Diversified product lines

· Reputation and established market position

· Parts support

· Aggressive marketing and sales support.


Weaknesses:

· Age of the senior management group

· Rapid, perhaps mismanaged growth

· Decline in factory support

· Fragmented marketing systems for the consumer genset line

· Overproduction of some models.


Our client used these results to select which of its own product lines to priortize for further investment.