Identifying Acquisition Opportunities For Growth In China
The Challenge: Our client had a limited footprint in China and was looking to expand its presence there, with an ultimate goal of developing a billion dollar China business through targeted acquisitions. The client is a supplier of construction tools and materials that a type of residential construction that is largely absent in China. Acquisitions needed to involve products relevant to the local market but that still fit with the company’s existing portfolio.
Assessment: In order to create a high-level picture of potential opportunities across market segments relevant to construction, Blue Canyon developed an opportunity-fit methodology for understanding the construction bill of materials and product content for projects of various types. We determined our client’s opportunity by sizing the market segments, and projecting their future growth and profit potential. We identified construction materials appropriate for the Chinese market and determined which market segment in China would fit best with these products and with our client’s strategy.
Strategic Solution: Our work highlighted an array of industry sectors from those that were highly attractive to our client including solar power, nuclear energy, and high speed rail. In China, all of the sectors are large and growing, so the “fit” influences the attractiveness of the opportunity. Blue Canyon concluded that the solar power market in China offered the most exciting growth opportunities.
Results: Our client acquired a company in the energy industry with an existing presence in China and has aggressively grown its business there by 10 share points within the first 24 months post-acquisition.