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A Lean Approach to the Connected Car Business

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Sprosty Network was asked to develop a business architecture that would help the largest automotive aftermarket parts provider in North America drive profitability and protect market position.

The Challenge
With the proliferation of the Internet of Things (IoT), vehicle telematics is a growing IoT vertical with the consumer market alone forecasted to exceed $7.5 billion in by 2019. Original equipment manufacturers and aftermarket telematics solutions allow for the creation of a variety of business models, including usage-based insurance, driver tracking and monitoring, and vehicle maintenance and diagnostics, the latter representing the greatest opportunity and threat to our client.

For several years, our client has been watching the telematics market with envy. But historically high costs of entry, protracted development times and an unproven business model prevented them from moving it out of the idea state. Additionally, our client was adamant in the need to maintain long-term commercial flexibility by leveraging their large size and market power to achieve owner economics.

The growth of the IoT markets has cultivated a myriad of enabling technology solutions, many of which are available “as-a-service.” The net effect of these new platform capabilities is the opportunity for companies to accelerate their time to market within a cost model that is fractional to what would have been required just years ago. These lower barriers to entry also allow companies to test customer acceptance of a given value proposition prior to full commercialization (a.k.a. the “Lean Startup”).

The Approach
Considering the importance of our client’s brand and their ecosystem of commercial customers in the auto repair business, it was important to identify the value proposition to the customer, the appropriate channel for distribution, and the business architecture that would allow them to scale into other segments over time. Sprosty Network helped identify the total addressable market for business and consumer market opportunities, vet alternative technology solutions through an agile RFP process, and ultimately an execution blueprint that maximized their short- and long-term commercial interests.

The Result
Sprosty Network’s ability to quickly dissect the competitive landscape and to identify an end-to-end business architecture supported by a profitable business model allowed our client to accelerate its path to market. Our client began initial field tests within only a few months of deciding to move forward.

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