Case Study - Retail Practice
International expansion assessment for an e-commerce marketplace
The Situation
An $80MM e-commerce marketplace based in the U.S. was looking to identify new sources of growth for their business. The Company has seen a slow down in its US business and was looking for alternative avenues to drive top-line growth and EBITDA. Management wanted to better understand the strategic and financial viability of expanding into selected countries in Latin America
Our Approach
We conducted a 6-week engagement that included a market assessment of the selected countries to understand the level of attractiveness, and an internal assessment of the Company’s capabilities to determine its ability to compete in these markets
Specifically, our approach included:
-
Estimation of the size of the addressable market in Mexico, Colombia, Peru and Brazil
-
For each country, analysis of the consumer and competitive landscape, as well as market attractiveness
-
Definition of the basis of competition and identification of any performance gaps
-
Development of specific recommendations as to whether the Company should enter any of of the markets
The Results
Based on our assessment and recommendations, management decided not to embark on an international expansion into Latin America. The Company was able to recognize that the strategy would likely yield a low return on investment, increase complexity and risk. As a result, the Company re-directed investment and efforts into other, more attractive, opportunities with a more appropriate risk profile.