New Business Opportunity Assessment
Project: Rapid economic growth in China, India, and S.E. Asia had been pulling a great deal of the labor traditionally engaged in agriculture into other, often more urban, opportunities. Because of this, in many geographies, the labor to perform manual field preparation, planting/transplanting and harvesting was no longer economically viable or available. However, the average plot size was often too small to support individual mechanization, even walk-behind solutions. To fill this void, there was rapid development of an emerging contractor segment where individuals would either specialize on one process step (e.g., mechanical harvesting) or offer a full suite of services necessary for a given crop. The SGE Immersion team evaluated the opportunity for the company to leverage its dealer organization, financial services capabilities, and infrastructure to address the contractor segment’s growth. The team examined the mechanization of agriculture in India to understand the underlying economics and drivers of the sector; evaluated the economic impediments in relation to the growth in contractor services to understand the current market, profit opportunities, and changes in demand with the goal of conceptualizing an improved business model for the region related to mechanization; and reviewed the equity and financing necessary to start, the bookings required to maintain, and the risks associated with such a business.