Investor Support

In China

Today, global investors are facing challenges not only from the investment life cycle, namely origination, acquisition, value creation, and exit, but also from the strategic and practical selection of industries and target companies. Since emerging markets such as China are not as transparent as mature markets, investors must possess both strategic insights and operational capabilities to reap sustainable success. On the other hand, investment targets are looking for the "smarter" investors who can bring experience to help upgrade the company. In such an investment environment, it has become even more critical to tackle these challenges. Roland Berger's close relationships with both investors and industrial players enable us to:

• Bridge the professional and personal trust between two parties
• Prioritize the strategic entries of investments, based on global trends and intimate understanding of local dynamics
• Verify the investment opportunities efficiently, by leveraging strategic insights and industrial knowledge
• Ensure the success of investments through performance improvement
• Facilitate further M&A and industrial consolidation
• Plan for and implement the optimal exit

For private equity firms and other investors, Roland Berger offers a wide range of services covering all topics throughout an investment cycle:

Our project examples:

Client Issues

The client is a leading Chinese manufacturer of sporting goods, invested in by a global private equity company. The manufacturer has become fairly successful over the past several years by expanding its share of wallet and establishing a recognizable brand in the market. However, the company has recently been receiving more and more complaints from its customers about poor delivery times and product quality; at the same time, direct competitors are taking market share from them.

The client hired Roland Berger to perform a Fitness Program (a proprietary performance diagnostic tool that leads to the identification of quick improvements) after an unsuccessful pitch from another firm using a traditional consulting approach. The company's expectation for the project was for Roland Berger to identify quick-win areas for improvement to ensure long-term sales and profitability growth.

Since the client had never hired strategy consultants, the Roland Berger team conducted extensive communication with its management team upfront to ensure that both the company and its private equity investor felt comfortable about the project's methodology and its potential impact.

Project Approach

The team kicked off the project by interviewing the client's major global customers to gain first-hand information on changing market dynamics and feedback on the company's performance. The overall market environment, the company's business model and its organizational structure were also examined. Performance on various operational issues were then quantified, compared and prioritized using an activity-based costing approach.

Impact

A list of quick-win and high-impact improvement levers were identified, with cumulative profitability impact of 40-50%. Roland Berger was subsequently retained to implement a series of programs to realize the targeted financial returns. The end result has been that all three parties – the portfolio company, its private equity investor and Roland Berger – have jointly delivered value to the company and its shareholders.

Client Issues

The client is the Asian subsidiary of a leading international private equity investor. It was seeking to hire an independent consulting firm to conduct strategic due diligence on a leading hot-pot restaurant chain in China to validate its proposed acquisition. With rich experience in supporting investors and knowledge of China's retail sector, Roland Berger was selected to carry out this assignment.

Project Approach

The project's objectives were to:
1)understand the restaurant industry's potential and competitive landscape
2)identify store formats that allow the company to differentiate from competitors
3)assess the effectiveness of its outlet management system
4)validate growth objectives
5)identify any inefficiency in its operations

Various methodologies and tools were employed, including market analyses, store performance analyses, store visits, financial modeling and interviews with the company's top management.

Impact

With great success, Roland Berger produced a thorough analysis of the Chinese hot-pot market. We also investigated the different aspects of the organization and recommended various action items to ensure sustainable growth. The target’s 5-year strategy was validated, and the acquisition has since become one of the most successful examples of private equity investment in China.