Retail venture for a leading Industrial goods manufacturer

Indian retail space was exploding with opportunities. One of the largest consumer markets in the world was seeing new players and chains evolving. The Indian consumer was suddenly experiencing a new shopping experience moving from conventional mom and pop stores to organized retail. Domestic retailers like shopper stop, future group were expanding into newer product lines, formats and markets. One of countries top industrial goods manufacturer was eyeing the retail opportunity keenly and decided to explore the space, We were brought in identify the business the company should invest in. It was exciting no bars project. We started with classic blue sky approach studying the retail sector in India and worldwide. Our first recommendations were to invest in life style consumer retail, which was an exploding opportunity. However the chairman of the board wanted a business with synergy with their current business and operations.

A industrial goods company wants a retail business having synergy with their operations. A quick look at product line we realized that most retail products were not the domain of the company. There were no synergies in supply chain, brand association or product portfolio. Then where should we look to find synergy. We shifted gears and scrambled back to the drawing board to study the company in greater detail. What was this company, what was their core competency, and what does the brand stand for. A closer look gave us some pointers. It is industrial goods company, with brand association of quality, credibility and honesty. Our focus started shifting from consumer to industry. And it was eureka moment when we realized why are we looking at consumer retail, why not industrial goods retail. That’s also retail. Eureka a B2B retail business for fast moving industrial goods was the answer we were looking for. Suddenly we saw multi-billion dollar opportunity and space that was largely unorganized and having immense synergy with the principal company.

Over the next few weeks we built business model and went back to board. We got go ahead for to pilot the project. Sometimes we tend to overlook the most obvious opportunity that we should be chasing by following the herd.