Case Scenarios

Question 1

Case Scenarios:

What are the four key case scenarios?

Answer 1

1. Profit and loss
2. Entering a new market
3. Pricing
4. Growth and increasing sales

Question 2

Case Scenarios:

What is the high-level structure of a profit and loss case?

Answer 2

E (P = R - C) M

• Start by asking questions and analyzing the economy (E) and the market (M) to determine whether the issue being addressed is a compan problem or an industry-wide problem.
• After assessing external factors, move inside the parentheses to assess the company (i.e., internal factors). This is where the core company questions come into play.
• Two types of strategies for raising profits:
  
  • Revenue-based strategies
  • Cost-based strategies
• Consider solution timelines (especially if the case objective is time-boxed):
  
  • Short-term strategies
  • Long-term strategies

Note: Review revenue streams first even if the hypothesis is that costs are the issue. This allows you to understand where the company makes its money (so you can differentiate between costs that can be cut and those that can’t)

Question 3

Case Scenarios:

In a profit and loss case, what are some relevant questions to ask regarding costs?

Answer 3

1. Have there been any major shifts in costs?
2. Do any costs seem out of line?
3. If we benchmarked our costs against our competitors’ costs, what would we find?

Question 4

Case Scenarios:

In a profit and loss case, what are some relevant questions to ask regarding revenues?

Answer 4

1. What are the major revenue streames and what percentage of the total revenue does each stream represent?
2. Does anything seem unusual in the balance of percentages?
3. Have the percentages changed lately? If yes, why?

Question 5

Case Scenarios:

What are the three primary components of costs?

Answer 5

1. Labor
2. Production
3. Finance

Note: costs within each bucket can be further broken down into variable costs and fixed costs (picture a grid showing all combinations)

Question 6

Case Scenarios:

What are some ways to increase revenues?

Answer 6

• Acquire more customers
  
  • Increase distribution channels
  • Increase marketing
  • Enter new markets
  • Develop new products
• Get customers to buy more often
  
  • Introduce new products
  • Loyalty programs
• Get customers to spend more money
  
  • Increase basket sizes
  • Offer bulk discounts
  • Increase prices