Client Global Advertising Tech Business
Service Business Review, Product Review & Diagnostic
Location Mumbai, India 2014
Result Reset Strategy Delivering 20% Growth
Background
Our client was a technology business that supports the advertising industry with advertising distribution and asset management services. Its Indian operation was a start-up, completing its first year of operations focusing on TV commercial distribution and managing clients from media agencies and post-production companies. The business was failing to achieve its targets; it was third to market with two strong competitors;
one local and one, a long established international business. Lack of active customers and low price yield
meant that the operation had yet to break even and was becoming a critical drain
on our client's global resources.
Challenge
The Indian business was trading at 25%
of the monthly revenue budget and was being supported by head office at $250k per quarter. We were appointed to to provide a diagnostic on why the business was failing to win customers and why the price had been driven to levels 80% below our client's global average. We were further asked to make recommendations on either the
closure of the operation or to continue trading at a loss for strategic
reasons.
Approach
Our approach was to base ourselves on site to develop an intimate understanding of the local business and its potential. We spent time reviewing
daily operations and interviewing customers, broadcasters and staff. We knew there was a strong and highly qualified management team so our job was to close the knowledge-gap between the international strategic plan and the operational reality.
The key problem we found was with the practical usability of the product unique to the Indian market. Our analysis revealed that our client's inability to provide bespoke systems for broadcasters had led to TV stations becoming advocates for the competition. Our client then commissioned us prepare a gap analysis and business case to revise their product interface with changes specific to India. We cross-referenced our work and found relevance for our changes in other operations in SE Asia and the Middle East. This further supported our business case and product development was commissioned for 2015.
The key problem we found was with the practical usability of the product unique to the Indian market. Our analysis revealed that our client's inability to provide bespoke systems for broadcasters had led to TV stations becoming advocates for the competition. Our client then commissioned us prepare a gap analysis and business case to revise their product interface with changes specific to India. We cross-referenced our work and found relevance for our changes in other operations in SE Asia and the Middle East. This further supported our business case and product development was commissioned for 2015.
Results
Our work revealed that the client's business plan
had not adequately considered operational processes unique to India and that
they had underestimated their competition. Our
competitive review revealed a bias towards local businesses so we recommended
that they partner with their local Indian competitor to provide the best blend of local insights with their international experience in the sector. This recommendation effectively removes a competitor, reduces price pressure and provides a real benefit to the Indian customer with a system adapted to their specific requirements. Following our briefing the client has decided to retain a strategic investment in their India.
Once the product changes are implemented, it is expected that their Indian market share will rise from 20 to 40% and through partnership they intend to they will be able to fund a broader range of services to the Indian advertising community.
Our success was to provide the client with market knowledge that they did not previously have, giving them a detailed understanding of their Indian operation and enabling them to make more informed decisions in future.
The Advisory Partnership assists its clients with operational strategy and structural change, delivering outputs that are scaleable to meet the challenges of technological change and international growth.
Post by James Douglas
What we have learned in India, SE Asia and Latin American are captured in more detail the following articles:
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