Fire Extinguisher Manufacturer

I: The client is a fire extinguisher manufacturer. You are hired to help them grow their revenues from x to 3x in 3 years.

C: Can I know more about the value chain of the client, their market share, and their area of operations?

I: The client is a legacy fire extinguisher manufacturer and they specifically produce red fire extinguishers. They have pan-India operations. They are involved in the procurement of raw materials, manufacturing and distribution.

C: Can I know who are their customers?

I: Why don’t you tell me who could be their customers?

C: I would like to break down their customers into two segments – one with inherent fire risk and others. I would further break it down as industrial and non-industrial customers. So it could be industries with inherent fire hazard such as oil and gas companies, and non-industrial with fire hazard could be fire brigades. Cinema halls and entertainment parks could be other industries with no inherent fire hazard.

I: That sounds good. Let’s continue.

C: May I know more about the product?

I: It is a common carbon dioxide fire extinguisher. Let’s proceed with the case analysis.

C: Sure. So growth can be achieved by expanding operations in the same industry or a new industry.  Does the client have a preference on this?

I: Let’s look at same industry first.

C: In the same industry, the client can choose to grow either organically or inorganically. Would you like me to elaborate on either of these or both?

I: Can you tell me some ways to achieve inorganic growth.

C: Inorganic growth could be achieved by entering into a joint venture, by acquiring a competitor, or by entering into a merger. 

I: What about ways to achieve organic growth?

C: For organic growth, I would like to consider two factors through which it can be achieved – market share and market size. An increase in either would lead to organic growth. There are several ways to assess and achieve growth in these areas. Should I suggest some ways for either or both of the areas?

I: How do you suggest increasing market size?

C: Market size could be increased by continuing in the same market or entering a new market. The client could manufacture and sell new products which could be complementary or have some common synergies in the manufacturing process. They could also look at increasing their revenue per customer through cross-selling or upselling.

I: What do you mean by new markets?

C: By new markets, I mean that the client could enter new geographies or new customer segments. Would you like me to share some ways to increase the market share?

I: No. Why don't you tell me how would you choose between organic and inorganic growth?

C: I would recommend organic growth when there is potential in the market, that is one either has the capacity to increase the market size or increase their market share. Basically, when the market is not saturated, I would suggest organic growth and when the market is saturated, inorganic growth would be better.