One of our enterprise clients within the consumer staples sector hired two Fintalents to conduct market research as well as to evaluate various strategic scenarios (incl. M&A options) in collaboration with the in-house Corporate Finance and Strategy Team. Furthermore, an expansion of the product portfolio was assessed in light of findings from research about consumer demographics and spending habits.
The overall goal was to assess the portfolio strategy of the company and evaluate potential organic and inorganic growth opportunities including a diligent analysis of the various industries and subsegments. The deliverables were presented to the management board.
To crystallize their deliverables our Fintalents focused on these key questions throughout the project:
- What is the real problem or opportunity we’re trying to solve , and for whom?
- Why do we think this problem or opportunity is important to the business and to the user?
- What would success look like? Which KPIs do we want to impact?
- What are we not trying to solve in this project?
- What’s the size of the audience for whom this is relevant? What market share do we expect to get?
- What are key business risks and constraints?
- Preliminary Project Plan
Industry market research and commercial due diligence
Our M&A advisors looked at the Industry volume evolution (actuals and projections) by key markets, broken down by: brands and types; price class (premium, mid, low); sales channel (online vs offline); and major financial drivers by key markets, such as Retail Selling Price, local tax structures and Trade margins.
Consumer profile, segmentation and commercialization strategy
This dossier provided our client a customer demographic overview and insight into consumer habits. Information included key metrics about both the target consumers and products. Demographic data was broken down into profiles of the target-buyers (by gender, age, financial situation, urban/rural). It looked at when and how they will use the product (e.g. exclusive vs. dual usage, average daily consumption, etc.).
This data then fed into insights about products and the key targeted markets as well as those areas with geo-expansion potential within these markets. This included insights into consumer reach and product awareness within established and emerging markets, which fed into a route to market strategy.
Research was also conducted into new product lines. Key questions that needed answering were “What “pain point(s)” is the product addressing?” and “How will the new product(s) impact our existing product portfolio (cannibalization, communication, pricing, etc.).
As a result of the changing nature of our client’s product area, our Fintalents also looked at how to build a potential new brand around existing ones.
Create Financials to estimate CAPEX, understand acquisition and retention costs per user over time and create value creation models: IRR, DCF, EVA – In short: “How much will it cost and what’s the return?”
As our client operates worldwide it was necessary to assess the risk of regulatory changes in both established and emerging markets. In this case it was most prescient to focus on developing a strategy to mitigate possible medium-term changes in EU regulation within our client’s product category.
It was also necessary to evaluate how new and existing product lines could be most effectively manufactured. Our Fintalents looked into options for manufacture: did the client need to set up a new manufacturing facility, or could they use free space in existing factories? Does our client have the knowledge internally to manufacture the product?