BCG develops growth strategy for Indian utilities firm

13 August 2014

Indian power company CESC has hired Boston Consulting Group to develop a new growth strategy. The consultants have been given roughly six months to draft and finalise the strategic plan.

CESC is one of the few privately-owned power utility firms in India. The company belongs to the Indian conglomerate RP-Sanjiv Goenka Group – other ventures under its umbrella include among others Phillips Carbon Black (the world’s eighth largest carbon black manufacturer), Saregama India (entertainment firm) and Spencer (retail chain). CESC currently supplies electricity to over 2.7 million customers.

For the coming years, CESC has the ambition to substantially expand its footprint and capacity. To support the strategy development process, the firm has hired The Boston Consulting Group, one of the top five global strategy consulting firms. The consultants will provide advice on a number of fundamental strategic questions, such as how to strike the right balance between traditional and renewable energy, and setting the ideal business mix between generation and distribution. “We can't grow in all the segments simultaneously, so we have appointed Boston Consulting Group to suggest segments we should focus on to achieve growth in the next five to seven years,” explains CESC Chairman Sanjiv Goenka.

Power lines - CESC and BCG

Asked for why the firm decided to bring in the expertise of external consultants, Goenka said. "Though we have our own vision about what we want to be… we can’t afford to make any mistake at this crucial juncture by having only a subjective view."

Expansion strategy
BCG’s mandate primarily focuses on developing a new expansion strategy. Key elements include identifying the key areas for growth, geographic focus (key cities that will drive growth), expansion model (e.g. acquisition of franchisees) and looking at the alignment with (changing) government energy policy. In addition, BCG will provide recommendations on how CESC can further enhance its customer centricity. The consulting firm is expected to deliver its final report in six months.

Strategy consulting in India
Recently another Indian company, car manufacturer Rane, hired BCG’s counterpart and rival McKinsey & Company to support it with the development of a new corporate strategy.