Market Due Diligence | Competitive Landscape Analysis | Target Identification

Business need

  • A UK-based mid-market private equity investor was conducting its preliminary diligence on the furniture market in major markets in Europe and the US.
  • The PE firm wanted to gain an in-depth understanding of the key players across all the segments of the market and their competitive dynamics.
  • The firm also sought a detailed market map of the sector to identify investment-worthy platform opportunities.

To understand the value chain, disruptors, and competition in the global furniture industry across luxury, premium, and mass market segments.

The client outlined three key reasons for selecting RocSearch:

  • Our proven investment research and advisory capabilities.
  • Our wide exposure and understanding of various niche segments of the consumer goods industry across Europe and the US.
  • Our track record of conducting primary research-based detailed market due diligence work.

Approach and Methodology

  • A dedicated team was set up for the client which started off by preparing a detailed list of scope questions that had to be answered across each section. This was followed by identifying furniture industry experts specializing in specific parts of the furniture manufacturing and retail value chain.
  • Based on extensive consultations with these domain experts the team was able to gather insights into the market structure, growth outlook, prevailing business models, disruptions, and competitive dynamics.

In addition to forecasting the market based on quantitative and qualitative data, the study also captured the market concentration across luxury, premium, and mass market segments. The study also looked at the synergies achieved by some players through strategic acquisitions.

  • Expert consultations with CXOs of the market leaders helped assess the demand sustainability and market penetration.
  • We also analyzed the correlation of furniture demand with macroeconomic factors like per capita GDP and inflation.
  • We specifically looked for the impact of adverse events like the subprime crisis of 2008, the financial crisis of 2013, and the pandemic of 2020.
  • In addition to the market analysis, we screened c. 900 small, medium, and large businesses to shortlist and profile 25 investment-worthy opportunities.

Business Outcomes

  • Our research provided the client with detailed insight into the global furniture industry, the growth potential of various segments, and some of the downside risks involved.
  • Detailed consultations with CXOs of market-leading furniture manufacturers and retailers also helped the client identify post-acquisition value creation levers.
  • An exhaustive map of the market with few high potential opportunities helped the client quickly initiate its target due diligence.

The study helped the PE firm choose the right market segment, understand its growth potential and risks, and select relevant targets for acquisition.

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