Case Study | 10 October 2024
How a Top Chemical Manufacturer Emerged a Winner by Analyzing its Competitive Landscape and Restructuring its Benchmarking Exercise?
Posted by : Preeti Wani
A top German chemical company with a wide range of products across multiple subsectors, expanded its operations to tap the Indian market. However, the competition from local market players was resisting its growth in the country. The company authorities turned to Research Nester Private Ltd to facilitate a strong foothold in the Indian Market.
An overview:
- A chemical company based in Germany, having a strong global presence encompassing various subsectors such as petrochemicals, specialty chemicals, agrochemicals, and nutrition and care, opened its operations in India in May 2018. It intended to target the new market and diversify its customer base.
- However, the immensely competitive local market, high-cost structure, and lack of demand for its products were challenging its operability.
- By September 2020, the German leadership had significantly failed to incorporate a winning strategy for the company. It then sought out Research Nester to facilitate an analysis of market dynamics for long and sustainable growth and profitability.
- Research Nester offered to analyze its product portfolio as per the demand and preferences of the Indian market. Apart from that, it also speculated the pricing and distribution network as incorporated by the company in the region.
The Story
The German company dealing in chemicals started operations in 2018 in three different districts of Maharashtra consecutively in the months of May, June, and July of the same year. The company was finding it difficult to sell its products in the foreign market. The brand was a big name in its home territory and even known globally, but tapping the Indian market seemed difficult. Understanding the dynamics of market penetration as per the Indian regional landscape was getting increasingly difficult. The initial growth didn’t look bleak, but gradually as the momentum got slower and slower the company authorities faced two options- either to shut down the business and return or to try an absolutely different business model. What strategy worked in Germany would not work in India. The company leaders reached out for outside help. This was when Research Nester came into the picture.
Our Solution:
The major pain point of the company was the lack of in-depth research related to the supply and demand scenario of the Ceramics Composite Matrix Market. Research Nester offered a customized Advanced Ceramics Market Analysis solution to enable the organization to understand the market logistics and focus on mitigating supply and demand risks. RNPL consultants suggested the following road map for a better future.
- Analyzing the external business environment.
- Determining the targeted applications and preferences of industries and accordingly prioritizing the production.
- Having scope for scalability.
- Assessing the strengths and weaknesses of the finished products.
- Brainstorming the forces that affect the supply and demand patterns in the market.
- Many Innovations that could positively impact society.
By utilizing these analytical tools, the company could optimize its inventory, manage its suppliers, and figure out the current market trends to strategize its production.
Results
The Company was facing severe supply-demand fluctuations and very low return on investment. The Y-o-Y growth was challenged. The percentage growth of the company in the firstyear end (2019) was 30%, which went down to 15% by the end of 2020. After the end of the first quarter of 2021, Research Nester was brought into the picture to help the business stay afloat and manage sustainable growth. The analysts created a comprehensive action plan for the company’s supply and demand business model considering its offer to suppliers, the market price of its products, the margins, and the supply chain mechanism. The prevailing demand in the market, the end-use industries with high product requirements, and the current competitive landscape were also analyzed. The top sources for supplying superior quality raw materials such as composite fiber and matrix materials that could be silicon carbide or carbon were included in the analysis. Furthermore, the ratio-based requirement for each depending on the finished product was also studied for better quality purposes. The percentage growth reached 20% by the end of 2021 and it gained momentum to reach 45% by the end of 2022. With a better understanding of the market mechanisms and crucial analysis of the current and future trends, the company was able to build a better market position and subsequently, profitable growth. All of it contributed to the maximization of its revenue.
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