Over a one year effort, Sathguru supported the agri-input retail division of a leading South India based conglomerate to re-prioritize its product and service portfolio and emerge as market leader in providing total agri solutions.
Context: Re-prioritizing product and service offerings for optimized operations and enhanced profitability
Our client was a leading fertilizer and agro-chemical entity in South India. The competition in this segment was driving business to evolve and develop new business models offering comprehensive one stop solutions to farmer family needs.
Our client was no exception and ventured into several possible avenues in agri-retail and farm services realm. However, not all these ventures were profitable and client faced significant operational issues. Additionally, human resource competency mismatch between existing and new businesses posed significant challenge in realizing the growth opportunity.
The client approached Sathguru to re-prioritize their product and service offerings, optimize operations, enhance profitability and build capacity to effectively handle these new businesses.
Scope
The scope of Sathguru’s engagement included:
- Critically analyzing strategy and operations of the new retail and farm service business verticals to assess their relative performance and synergy with the existing business verticals and propose re-prioritization
- Mapping human resource and knowledge requirements of the new business verticals and suggesting effective competency building process to bridge the gaps
- Exploring potential for leveraging new advancements in Information Technology for knowledge dissemination and improving service quality
Approach
Sathguru followed a dual approach of evaluating each of the new business verticals for standalone business merit and synergy with existing business. We developed a proprietary framework to evaluate strategic attractiveness of each of these new verticals and potential for operational optimization:
- Carried extensive primary research: Covered diverse stakeholders such as dealers, farmers, extension specialists and staff & management of the client across different geographies to ascertain expectations of various stakeholders including the customers
- Conducted due diligence and comprehensive operations review of all new business verticals: Comprehensively reviewed operational details and business model including analysis of profitability, product categories, value chain, infrastructure, human resource capabilities. Finally, assessed attractiveness of each of these business verticals.
- Analyzed synergy of each of the new business verticals with existing business to ascertain fit with overall growth strategy of the client.
- Based on the above analysis and using a proprietary business mapping framework, identified verticals that should be continued and verticals that should be discontinued within the overall realm of rural retail and farm services
- For verticals that were recommended to be continued: Performed a detailed evaluation including operational benchmarking, human capacity and infrastructure need assessment. Recommended best practices and operations re-engineering to revitalize the verticals.
Recommendations
Sathguru made the following specific recommendations to strengthen the client’s position as comprehensive agri-solutions provider.
- Prioritization of business verticals: Sathguru identified and recommended closure of retail verticals that were not synergistic with client’s overall business presence. Also identified opportunities within farm services with potential for higher profitability and synergy and developed growth strategy to enhance level of market penetration
- Operations optimization: Sathguru recommended a new organization structure and helped prioritize service offering that emphasized role of farm advisory and effective farm service in delivering value to famers
- Human capacity development: Sathguru recommended an HR policy that aimed at systematic assessment and capacity building of existing staff and a mechanism to recruit, and retain talent to ensure service level sustainability and high motivation in service delivery.
- Research linkages: Sathguru recommended specific research linkages with research and academic institutes of repute that forms the backbone of farm advisory services
- IT solutions for farmer services: Sathguru identified suitable IT platforms with optimal human intervention for service delivery so that enhanced IT solutions can be designed for development and integration within the overall framework of product and service delivery
Impact: Enhanced profitability, operational efficiency and competitive positioning
The closure of non-synergistic business verticals in the retail division led to surge in profitability. The introduction of effective IT platforms, linkages with research and academic partners and prudent HR policies enhanced knowledge and delivery capabilities resulting in a holistic leadership in farm advisory services and agri-input for the client.