Should Saffron Retail Enter Nigeria?
Consulting
medium50 min0 submissionsMcKinsey
Scenario
Saffron Retail is a apparel retail company with ₹1046 Cr of revenue in its home market of India. Growth at home has slowed to low single digits and the board is looking abroad.
Nigeria has been identified as the priority candidate. Early desk research suggests:
- Addressable market of roughly ₹1454 Cr, growing 17% a year
- The largest incumbent holds about 60% share, with a long tail of local players
- Entry would require an estimated ₹218 Cr over three years
- Regulatory approval takes 9-18 months, and local partnership requirements apply to foreign entrants
The strategy team's paper projects 5% market share within five years. The CFO has asked whether that projection is credible and whether this is the best use of ₹218 Cr.
Supporting data
entry
- estimated investment cr
- 218
- local partnership required
- true
- projected share year 5 pct
- 5
- regulatory timeline months
- 9-18
home market
- growth pct
- 2
- revenue cr
- 1046
target market
- geography
- Nigeria
- market growth pct
- 17
- addressable market cr
- 1454
- largest incumbent share pct
- 60
Your task
Advise the board. Provide:
- Analysis — size the opportunity yourself, assess the competitive landscape, and evaluate entry modes.
- Risks — what would make this fail, and what you would monitor.
- Recommendation — enter or don't. If entering, specify the mode and sequence.
Challenge the 5% share assumption explicitly.
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How you'll be graded
100 points, 60% to pass.
- entry mode20
- market sizing25
- recommendation20
- risk assessment15
- competitive analysis20
Hint
Reveal suggested structure
- Size it independently — bottom-up: population → addressable segment → penetration → frequency → price. Compare against the ₹1454 Cr figure.
- Attractiveness — growth, fragmentation, margin structure.
- Right to win — what does Saffron Retail have that local players don't?
- Entry mode — organic, acquisition, joint venture, licensing, against the barriers found.
- Economics — revenue at 5% share vs the ₹218 Cr investment, with a payback period.
- Decide with staged commitments and kill criteria.