Assessing Cost Competitiveness
Our client, a global consulting firm, was tasked by an international autoparts maker to analyze its rival’s cost structure in eight manufacturing centers around the world. Americas Market Intelligence (AMI) was entrusted with the work in Mexico, the target company’s third-largest manufacturing center.
The cost analysis was needed by the client so it could recalibrate its own pricing and win back lost customers.
With the support of the global consultancy, AMI applied a costing template to the task; researching about 40 different cost inputs together could estimate the cost structure of the rival manufacturer.
Some of the cost inputs came from secondary sources (e.g. electricity) but most required human intelligence, gathered from former and existing employees, suppliers and customers.
AMI was able to provide an estimated cost breakdown of three different products made at the plant. Furthermore, intelligence revealed previously unknown facts about the type of products and assembly methods used in the Mexico plant, which in turn shed much needed light on the output potential (i.e. future threat) of the Mexican plant.
The client was able to understand the cost structure of its chief rival and adjust its own pricing in order to win back lost customers.