Identifying New Business Opportunities to Accelerate Growth

distribution

Client Challenge

The client was a conglomerate having a presence in welding products and accessories, power plant solutions, production of cosmetics and personal care products. The client group had a strong investment backing and had cash reserves. It wished to invest in new business opportunities to accelerate its turnover and hence requested UC Strategy to identify blue-chip opportunities in the Indian market for this growth trajectory

 

Our Approach

In order to identify suitable business opportunities, UC Strategy used the following approach:

  • As a part of the assignment conducted detailed primary research and in-person interviews with more than 150 industry respondents
  • Understood the strategic intent, assessing the current internal capabilities and management outlook on new opportunities:
  • Gained perspective on current business presence in each of the Group companies
    • Industry verticals, segments and products/ services being offered
    • Key customers
    • Business model
    • Historical performance
    • Value proposition
    • Differentiators
    • Domestic Vs Exports
    • Alliances/ tie-ups
    • Future plans, etc.
  • Conducted assessment of internal capabilities:
    • Technology
    • R&D Capability
    • Manufacturing process capabilities
    • Pricing and cost structure
    • Distribution network
    • Logistics Capabilities
    • Alliances
    • Brand Strength
    • Group companies
    • Relationships with key customers
  • Create a long list of opportunities within the value chain of each space being evaluated through discussions with Top management
  • Identify themes/ sub-segments based on:
    • Internally defined criteria by the management. E.g. Extent of fragmentation in the industry
    • Growth engines, business patterns and potential changes in industry structure
  • Long list of opportunities was created through themes shaping each space across the value chain
  • Defined preliminary screening criteria (e.g.)
    • Investment
    • Profitability
    • Technology requirements/ complexity
    • Value/ brand creating opportunities
    • Nature and type of equipment as per management’s requirements. E.g. Assembly/ capital equipment in B2B space
  • Conducted a quick profile of the long list of opportunities and prioritize opportunities for detailed evaluation
  • Conducted in-depth domestic market analysis for the shortlisted opportunities, this included:
    • Overall industry structure
    • Market size and forecasts for the next 5 years
    • Key demand rivers, substitution trends and growth inhibitors
    • Key customer segments
    • Competitive analysis
      • Share of organized vs. unorganized, level of fragmentation (H-index), presence of MNC players
      • Existing production and built up capacities
      • Overall competitive intensity and market share of key players
  • Overall demand-supply situation
  • Profit pool
  • Pricing trends and average realizations
  • Relevant regulatory issues, etc.
  • Technology play
  • Duty structure. Trends in protection for domestic industry
  • Analysed operating margins for the products
  • Determined scale of investments required, return on investment and payback period
  • Value chain analysis
  • Customers Key Purchasing Criteria
  • Defined business model for the selected opportunities:
    • Product offerings
    • Identify key customers
    • Marketing strategy
    • Pricing stance
    • Capability requirements and ways to develop the capability
    • Mode of entry
    • Acquisition vs. Joint Venture vs. Greenfield
    • If acquisition or joint venture type of company to partner with
    • Distribution strategy
  • Developed financials and an implementation plan to pressure test the strategy in light of the revenue and PBT (Profit before tax) objectives

 

Our Impact

Building on the megatrends, a total of 116 business opportunities were identified. Applying 4 levels of filtration criteria’s, a total of 13 opportunities were finalised and presented to the client top management. Out of the final list of opportunities, the client selected 3 opportunities for initial investment and engaged UC Strategy for starting on the filed implementation of those opportunities.

 

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