Growth Strategy for the Conductor Division of a Top Conglomerate in India
The company was in its fourth year of operations. Though it witnessed tremendous growth during the previous three years, profitability was declining. Demand was declining due to a lack of funding to the power sector. Bankrupt state electricity boards (SEBs) did not have the funds, and the foreign investors and the multilateral funding agencies such as the World Bank and the Asian Development Bank put SEB reforms as a precondition to funding future power projects. As a result, the industry was going through a recession with several players suffering heavy losses and on the verge of closing down. In light of the above, the management wanted to examine other business areas to diversify based on the future scenario of the power industry.
UC researched and examined other business areas that would be viable for the client to diversify into:
- Conducted extensive primary research and met people from various organisations such as the Ministry of Power, Power Grid Corporation of India, SEBs, World Bank, National Grid, Essar Power, SBI Caps, ASCI, Tata Projects and other industry associations
- Conducted secondary research and studied the process of power sector reforms and its impact in other countries such as UK, Australia, Argentina and Chile
- Projected the pace of reforms in India and its impact on various segments in the power sector
- Defined the market size, profitability and growth for each segment
- Assessed the competition intensity for each segment that involved profiling, studying of business models and the strategy of major players
- Evaluated and selected the segment (products and services) based on evaluation parameters such as growth, profitability and synergy with existing businesses
- Defined an entry strategy for each selected segment (Acquisitions, Strategic Alliances, Greenfield)
- Evaluated 123 countries of which 10 countries were short listed for exports potential of existing and new products and services
- Identified strategic initiatives and prepared a detailed implementation plan
The client received a comprehensive list of business areas they could enter into, in order to expand their businesses.