Identifying New Business Opportunities for a Leading Business Group

Client Challenge

The client is part of a leading Indian business group having business operations in IT software and hardware. The top management is considering unrelated diversification, with the following criteria:

  • Investment outlay of about 500 crore in the new ventures
  • Investment horizon of about 5 years
  • Returns on Investment (ROI) of about 15%

The top management therefore wants to identify attractive business opportunities in the shortlisted industry segment.

Our Approach

UC Identified 197 Industry segments (Manufacturing, Services and Trading) as a starting point to begin the process of short-listing. UC understood the clients’ needs for unrelated diversification and defined a five level filtration criteria to arrive at the attractive segment:

  • Level I – Management Constraints
  • Level II – Future Outlook

    Key parameters were Projected Industry Size, Projected Growth, Fragmentation, Operating Margins, Capacity Utilisation

  • Level III – Risk-Return Profile

    Mapped 43 industry segments on a Risk (China Threat, Intensity in Innovation, Branding and Distribution) – Return (Global demand, India Advantage and ROCE) prioritisation matrix

  • Level IV – Attractiveness of Industry sub-segments and Ease of acquiring/ building capability

    Mapped 18 sub-segments on portfolio selection matrix; sub-segment attractiveness (P/E, Size, Growth, Competitive intensity, competitive capacity and Acquisitive opportunity) and Ease of acquiring/ building capabilities (People, R&D, Sourcing, S&D and Technology)

  • Level V – Portfolio decision

    Defined industry sub-segments as stars, pearls, oysters and elephants based on ease of building/acquiring capability and segment attractiveness

Our Impact

UC delivered the criteria by which the client can choose their business opportunitie and made recommendations for eight opportunities in new lines of business.

/** * Created by aashay on 18/7/17. */