Business Strategy for Cold Chain Logistics Vertical for a Leading Infrastructure Conglomerate in Philippines

Client

A major infrastructure and real estate player in the Philippines with business interests spanning Property, Energy and Infrastructure verticals.

Issue

The client leadership was inclined towards sustainable economic growth led by innovative and technology-driven projects and ventures. As part of the business growth strategy, the client had identified cold chain logistics as the target industry vertical to drive growth. It had set an aspiration of establishing 150,000 pallets of cold storage capacity across the country over 3-5 years.

The client engaged us to develop the overall business strategy for a successful market entry and growth to meet the aspiration through a comprehensive market research, analysis and financial modelling.

Approach

At the core of our approach, we leveraged our proven decision analysis frameworks and methodologies involving creating and evaluating strategic alternatives.

In alignment with the business aspiration set by the client we identified the key policy variables and strategic choices that need to be made across – market entry, business model, and warehouse management & operations. A combination of these choices and market positioning resulted into five viable strategic alternatives as potential directions for the business.

Next, we conducted a comprehensive market study encompassing the supply and demand of cold chain logistics for different product categories, growth drivers and outlook and pricing. Capacity split between regions was assessed and the most and least lucrative regions were identified. Final capacity in each region was split in product categories and distributed among different temperature zones.

The strategic alternatives identified as different growth journeys were evaluated based on financial returns. Key assessments were modelled with a bottom-up valuation model to identify the strategy with highest returns, along with a sensitivity analysis to recommend the strategic alternative to proceed with. This culminated in a clear strategic roadmap for the client to enter and grow in the cold chain logistics industry in the country.

Engagement ROI

A comprehensive GTM strategy was defined and CXO agenda was charted spanning organizational structure, financing, securing incentives and development and strategy roll-out plan.

The client successfully entered the cold chain logistics industry and made presence in two regions with a combined capacity of over 35,000 pallets.