Developing strategic direction for an incumbent – to continue or exit the business?

Developing strategic direction for an incumbent – to continue or exit the business?

Ma Foi’s structured assessment to reflect and convince the senior management on the opportunity in AAC Blocks segment, and develop consensus to continue in the business

Situation

The company is a part of large infrastructure group with rich history of over 50 years in Tamil Nadu. Being an early entrant in an industry under evolution, significant capital investments of over INR 40 crores and mounting quarter on quarter operational losses had compelled the management to re-think on their business decision . Lack of awareness,  market alignment towards traditional products, dynamics of economies of scales was affecting the business and restricting it from achieving the break-even.

Ma Foi’s mandate was to provide a strategic clarity to the management on continuing/exiting the operations.

Corrective Action

Ma Foi adopted a multidimensional  hypothesis driven approach across all business functions and  validated  each through rigorous assessment at primary and secondary level. A detailed assessment at the industry level, international trend analysis, organization capabilities across various functions and identification of the key enablers and retarders was done to derive the key success parameters for the company. Ma Foi also brought to light the current gaps and strength areas of the company with reference to the existing strategy that was being executed.

Ma Foi identified and outlined the key action areas for the business for execution implementation that would add significant value to the business and improve the operational performance. These were identified across all business functions of Production, Marketing, Strategy, Competition, Operations and Customer Segments. A fact based assessment of the market size and potential in terms of quantity and value was reflected to the management to present the business case.

Result

Ma Foi’s recommendation to the client was to Continue in the business operations with a keen focus towards taking corrective measures on execution implementation areas, few of which are listed below –

• The company is in the process of developing a strong management team separating the ownership from business operations. A full time CMO has been hired to lead the operations
• Shortlist and identify key markets for product placement and penetration
• Investments in developing a strong sales team and distributor/dealer network in key markets
• Investment towards developing a strong CRM system for higher operation efficiency
• Adopt a multi – brand product portfolio based on market needs and preferences

Ma Foi is currently hand holding the client with execution implementation of future strategy proposed.