Designing a Performance Appraisal and Compensation System for an Investment Company

Bfs Consulting

Client Challenge

The client, based in the Middle East, was into diversified businesses such as Steel, Oil & Gas, Retail, Real Estate and Investments. The client turned to UC STRATEGY to review its current performance appraisal system and compensation system for its Investment and Holding company. The investment company was primarily involved in Real Estate (develop, lease/ rent, sell) business and managed investments (stocks, private equity etc.) for the promoters. The holding company had support functions like Audit, Legal, PR, Finance etc. providing guidance and support to the entire group.

 

Our Approach

To develop the performance appraisal and compensation system of the company, UC STRATEGY adopted the following approach:

  • Built context on existing system, compensation philosophy, individual roles and responsibilities through one on one discussion with the client team
  • Conducted primary and secondary research to benchmark competition practices by speaking to individuals in similar positions in likewise companies and also interacted with recruitment consulting firms
  • Researched job portals and daily appointment newsletters
  • Redesigned the performance appraisal system
    • Defined Key Performance Indicators (KPI) and Personality Traits (PT) for each position
    • Allocated weight to each parameter based on importance
  • Key recommendations to the client included a framework to link the performance appraisal to annual increments and performance bonus

 

Our Impact

The client received a complete understanding of the compensation benchmarking of the industry. A newly designed performance appraisal and compensation system, along with the incremental outflow for the client was given. UC STRATEGY also recommended re-assessing of the basic remuneration for certain positions.

Shaping up the Inorganic Growth Strategy in Indian of a Leading Global Logistics Service Provider

supply chain

Client Challenge

The client was a global market leader in international express, overland transport, air freight, and ocean freight and contract logistics. It is a well know End-to-End logistics service provider having operations in more than 60 countries

The client offered a full range of customised solutions – from express document shipping to supply chain management. It is evaluating an acquisitive/ inorganic growth approach for its global forwarding division with focus being on ocean freight

The client approached UC STRATEGY to assist it in the endeavor of shaping its inorganic growth strategy and identify potential acquisition targets.

Our Approach

In order to shape the inorganic growth strategy, UC STRATEGY used the following approach:

  • Differentiated potential acquisition targets by an initial segmentation of MTO (Multimodal Transport Operators) and Non – MTO players in the Indian market
  • Shortlisted close to 2000 companies for evaluation and using various parameters to elimination, arrived at a final shortlist of 60 companies
  • Made a framework based on internal management discussion to rank the final shortlist companies and assign weights
  • Also adopted an alternate approach to rank top companies in each strategic category & map them against their accessibility, this was done considering:
    • Accessibility of these top companies in each strategic category was determined by their willingness to partner
      • Accessibility was determined on basis of respondents’ willingness to the following three options
        • Independent JV: Company is willing to consider a new joint venture with client, without diluting stake in their existing business
        • Equity participation: Company is open to selling off part of their equity
        • 100% sell-out: Company is willing to sell 100% stake
  • Using a combination of primary research, interviews and secondary desk search, prepared detailed profiles of the 60 odd companies, along with their financials and past five years performance
  • Based on the rankings and weights, selected final list of 25 companies and passed it over to the client for final partner selection.

 

Our Impact

The client received a detailed partner selection strategy.

Strategic Diligence of Potential Acquisition of Bakery and Speciality Fats Company

Routes-To-Market Strategy

Client Challenge

The client was a leading agribusiness and food company with operations across the globe. It sold products and services at numerous points along the value chain. It was a market leader in the bakery and specialty fats segment in the country. It was willing to sell its specialty fats business and move out of the product segment, however, it wasn’t willing to sell its manufacturing facility.

 

Our Approach

 UC STRATEGY followed the following approach in order to complete the project in a span of ten weeks:

  • Context building
    • Understand business
      • Understand product segment
      • Market size, growth and share of business by product and customer segment
      • Understand pricing and margins.
    • Preliminary customer analysis
      • Initial feedback on brands in specialty fats segment.
    • Target and customer analysis
      • Obtain targets perspective
        • Sales performance
        • Customer relationships
        • Acquisition scenarios
        • Business plan.
      • Detailed customer analysis
        • Trends in customer segment
        • Customer purchase criteria
        • Switching behavior and implications
        • Feedback on target brand.
      • Strategic fit and synergy evaluation
        • Assess strategic fit
          • Develop strategic scenarios
          • Evaluate implications of each scenarios
          • Develop framework to evaluate the impact of implications.
        • Evaluate synergies
          • Determine various operational synergies
          • Revenue synergies
          • Cost synergies
          • Evaluate probability and pay off for client in each scenario
          • Conclude on strategic fit
          • Comment on risks/upsides.
        • Valuations
          • Detailed valuations
            • Detailed financials forecast
            • Valuation of target on a stand-alone basis
            • Valuation on a combined basis
            • Overall project evaluation.

 

Our Impact

The client received an in-depth due diligence on the potential target and was given a decision whether to acquire/target the company.

Feasibility Study for Entering Port Based Palm Oil Refining Business

Routes-To-Market Strategy

Client Challenge

The client, a leading global agribusiness company, wanted to evaluate entry into port based refining for palm oil in India.

Our Approach

To evaluate the market for palm oil business in India and develop an entry strategy for the client, UC STRATEGY adopted the following approach:

  • Developed a spreadsheet model based on the framework capturing the impact and inter-linkages of the regulatory framework of the industry, excise and other benefits available at specific ports, capital expenditure and prices of major products and by-products
  • Conducted a detailed study of the application industries for by-products and analysed the key trends
  • Conducted a statistical analysis of the historical data for different ports and built scenarios
  • Analysed sensitivities of key input parameters on the EBITDA margins and IRR
  • Determined the conditions under which the venture becomes profitable

 

Our Impact

The client was able to build a detailed understanding of the economics of palm oil refining business and also received an entry strategy for the market.

 

 

Defining Franchisee Organization Structure and Operations Blueprint for a Tyre Company

Automotive Consulting

Client Challenge

The client, a tyre company focused on selling tyres and tyre related services such as wheel balancing, wheel alignment, tyre fitting, tyre rotation etc. They provided their products and services to both institutional and retail customers. The client had adopted a franchise business model for expanding its presence and aims to offer its franchise business in other countries in the Middle East.

The client requested UC STRATEGY to assist in defining an operations manual for the franchisee businesses and also recommend a suitable organisation structure for the franchise partner.

 

Our Approach

UC STRATEGY followed the following approach in order to complete the project in a span of ten weeks:

  • Reviewed franchisee operations
    • Build context
    • Review current franchisee operations
    • Study industry best practices.
  • Defined process framework
    • Define process framework
    • Define process details
  • Defined franchisee organisation structure
    • Define organisation operation options
    • Benchmark industry practices
    • Evaluate and finalise organisation structure
    • Define job descriptions and Key process indicators
  • Defined standard operating procedures
    • Define workflow
    • Define checklists and templates
    • Define information system

 

Our Impact

The client received a detailed operations manual and organisation structure for the franchise partner.

Developing a Growth Strategy for a Farm Products Company

Routes-To-Market Strategy

Client Challenge

The client was in the farm products segment. Biotech inputs and crop protection contributes to a significant amount of the business turnover. Several initiatives have helped the top management jumpstart growth. In 2006-2007 their turnover grew by 46%. The top management wanted to develop an overall growth strategy that is not dependent on monsoons. Currently, crop protection and biotech inputs are dependent on timely and good monsoons.

The top management asked UC STRATEGY to develop a growth strategy across business divisions and the overall portfolio is a synergistic mix meeting the return expectations of the management.

Our Approach

UC STRATEGY followed the following approach in order to complete the project in a span of ten weeks:

  • Examined current situation
    • Built context
      • Gained insights into the company’s strategic intent
      • Understood internal capabilities.
    • Analysed industry
      • Understood industry trends
      • Analysed customer needs
      • Analysed channels
      • Analysed competition
      • Reviewed findings to shortlist business divisions to take forward.
    • Built future roadmap
      • Identified opportunities
        • Analysed customer/product/value chain opportunities
        • Examined current strategy in light of emerging opportunities.
      • Developed strategy
        • Defined strategy
          • Product
          • Market/consumer
          • Channel
          • Pricing
        • Assessed capabilities required
        • Evaluated options for organic/inorganic growth.
      • Evaluated and revise overall portfolio
        • Evaluated the portfolio in light of new strategy
        • Revised portfolio and build broad financials.
      • Plan action
        • Defined implementation plan.

 

 Our Impact

 The client was given an in-depth deliverable after speaking to ~360 individuals along the value chain triangulated with secondary research.

Identifying a Suitable Location for Setting up Multi–Modal Logistics Park and Dedicated Freight Corridor for a Logistics Service Provider

supply chain

Client Challenge

The client was a logistics service provider in India. It intended to use the information to finalize selection of locations, carry out detailed feasibility studies and initiate development of the MMLPs in partnership with the concerned State Governments, and the interested respondents. The client being one of the interested respondents asked UC STRATEGY to undertaken the assignment on its behalf

Our Approach

In order to identify a suitable location, UC STRATEGY used the following approach:

  • Defined an approach map to undertake the engagement which included examining, estimating and highlighting strategies for EXIM traffic, Domestic traffic, Connectivity and Competitive Intensity
  • Conducted a detailed secondary desk research for the same and also conducted dipstick primary research
  • Identified locations for setting up of MMPL
  • The locations were grouped into three categories viz.
    • Preferred locations – Most favourable locations
    • Fallback locations – Feasible locations
    • Last potential locations – Not favourable locations, but last resort option
  • For each of the identified locations from each category the following aspects were considered and examined in detail:
    • Overview
    • Existing cargo capacity & Future cargo handling capacities
    • EXIM traffic
    • Domestic traffic
    • Connectivity
    • Major regions or cities catered to from each base locations
    • Competitive intensity
    • Present major commodities handled by each location
    • SEZs planned in and around or at each location and benefits of the same
    • Proximity and advent of other competitor Logistic service providers
    • Key industrial areas and nearby industrial belts – geographically
    • Existing ICDs and probable new upcoming ICDs near each of the locations identified
  • Identified and shortlisted the final set of locations based on each category.

 

Our Impact

The client received a suitable list of shortlisted locations for setting up of MMLP and DFC.

 

 

 

 

 

 

 

Defining a Growth Strategy for the Distributor of a Leading International Luxury Eyewear Brand in India

manufacturing company

Client Challenge

The client, predominantly into the distribution of leading international eyewear brands was looking to venture into the retail business. The client turned to UC STRATEGY to provide a growth strategy and to identify other product categories in the premium/luxury market to target. The client also requested UC STRATEGY to assist them in providing insights on the process and structural issues that would impede growth opportunities for the organization.

Our Approach

To develop a growth strategy for the client, UC STRATEGY adopted the following approach:

  • Analyzed the existing processes, and organization structure with respect to existing roles and responsibilities, reporting relationships etc.
  • Highlighted key issues and defined standard operating procedures (SOPs), organization structure and detailed processes, job descriptions and incentive structure in consultation/coordination with the management
  • Identified business opportunities, assessed value chain opportunities for existing products, consumer preferences for eyewear and business model of competitors
  • Defined strategy for the eyewear business in terms of final eyewear offering, viability of different retail formats and an overall business model in context of its growth strategy

Our Impact

The client received a roadmap for change in its process and structural issues. An incentive structure including sales, growth and performance-based incentives and a robust procurement and inventory management process was introduced. UC STRATEGY also delivered a summary of the key market, systemic and business operational issues that could hamper the client’s growth. UC STRATEGY also provided different business models and strategies to cater to different market segments.

 

 

 

Defining Business Model and Assessing Financial Feasibility of a Race Track Project for a PE Investor

Bfs Consulting

Client Challenge

The client, a PE investor wished to invest in racing tracks in India. The client approached UC STRATEGY to assess the financial feasibility of a race track and define a business model for the same

 Our Approach

In order to assess the feasibility and define a business model, UC STRATEGY used the following approach:

  • Interviewed more than 20 industry respondents across segments as a part of the primary research
  • Assessed the race tracks present in India and their dynamics
  • Examined the performance and track record of the tracks present in India
  • Assessed the revenues and utilisation of those tracks
  • Assessed the level of interest of race cars and car racing in India in the present scenario and examined the key reasons for its growth
  • Assessed the global model used by more than 6 track owners worldwide and examined the business model and operational strategies used by them
  • Examined the revenue streams that can be generated by racing tracks in India
  • Assessed the feasibility of setting up a race track in Western region
  • Highlighted the potential and key success factors
  • Prepared prospective business models
  • Highlighted the financial with returns on investment with various assumptions.

Our Impact

The client received a detailed business model and assessment of the financial feasibility of a race track venture in India.

 

Organisation Structure and Process Review for an Aerosol Producer Based in India

Client Challenge

The client, an INR 100 Cr company in the business of aerosol, liquid formulation and filling, production of aerosol valves and tin-plate aerosol containers. It planned to achieve a turnover of INR 150 Cr in the next three years. The company wanted to institute professionalism in the management.

Given this, the client appointed UC STRATEGY to assist in reviewing and redesigning its organisational structure and processes.

 

Our Approach

In order to conduct a review, UC STRATEGY used the following approach:

  • Conducted an internal analysis of the organisation along with interviewing of key management people across broad spectrum of employees
  • Conducted a detailed diagnostic review, which included:
    • Developing strategic intent
    • Developing an operational level perspective
    • Analysing present organisation structure
    • Analysed current processes in use
    • Drew out a strategy map and mapped all existing processes, formulate a fish bone analysis to highlight GAPS and issues
  • Defined changes, which included:
    • Redesigning of processes, and formulating of new SOPs
    • Addressed all GAPS and shortcoming of processes
    • Redesigned the organisation structure
    • Created new job descriptions and personal information sheet
    • Overhauled and redesigned the performance evaluation systems
    • Reworked on the KPI’s and KRA’s of each position within the organisation
    • Looked at the IT requirements and recommended changes on the same to the client.

Our Impact

The client not only received a review but also action point and recovery strategies to improve the overall performance. UC STRATEGY also detailed out an implementation support plan to bring about the necessary changes.