ENABLING INVESTMENT DECISIONS IN FAST GROWING ECONOMIES

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Investments , Industrial Goods ,

CASE STUDIES

West Africa is on a fast growth track with import substitution in the minerals & metals and industrial goods sectors emerging as a common investment theme. Our client was excited by the opportunity but we knew several players who were pursuing similar opportunities, and hence wanted to make sure that our client was not following the bandwagon and had a bullet proof business case before proceeding further. Some of the key questions we wanted to answer included:

  1. Is there opportunity for a new player in this market?
  2. What is our client’s unique value proposition to the customers?
  3. How can our client compete effectively without triggering a price war?

Our goal therefore was to validate the business potential, stress test the key assumptions, assess the risks and challenges and assess internal capabilities. Breaking these questions down in to a detailed business case enabled us to determine the size of the opportunity as well as take the client through a logical path to arrive at an investment decision.

We validated the business opportunity by looking at three angles:

  1. Analyse the value chain and determine where and how to play
  2. Assess potential in the domestic markets considering competition from imports and other domestic players
  3. Assess potential in export markets, within West Africa and beyond.

This approach allowed us to identify additional revenue streams and target markets which the client could easily tap into and faster market entry options which were not in the original scope of the business plan. At the end of this 3-month exercise, the client was able to take an informed investment decision looking at the comprehensive landscape we developed as well as from a group portfolio view. Furthermore, we identified the gaps that the client needed to close to be successful, which paved the path to implementation of the client’s future plans.

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