Case Structure

Question 1

The US Postal Service has been losing money and market share over the past several years. Can you tell me why and what they can do about it?

Answer 1

Industry / Market Overview of the market – Growing? Shrinking? Static? Changes in the market – mergers? acquisitions? Major players and their market share How has that changed over the last five years? How do their products or services differ? Technological advancement? What advantages and disadvantages does each player have?

USPS
Revenue streams: Have they increased or declined? Have the streams shifted in importance?
Pricing: How are we compared to competitors? Costs: Have our costs been increasing? Is there a way to decrease or stabilize the costs? Are there new cost-saving technologies we should be employing? Recommendations: Marketing and image Technology advancements

Question 2

Framework for introducing new product

Answer 2

1) Market Attractiveness- size, growth, competitors; product differentiations; barriers to entry/exit
2) Economics of the Opportunity- costs and profits
3) Strategy for Entering the Market- substitutes, product line, customer and how to reach them

Question 3

Framework for introducing re-release of new Porsche (things I forgot)

Answer 3

• Verify the objectives and ask if there are any other objectives
• Ask specific questions about competitors: How many cars do they sell? What are their price?

Question 4

A high-end Italian boot maker has seen their revenues flatten out. We need to figure out why sales have been flat and develop a strategy to increase sales.

Answer 4

• External factors: worldwide unemployment, shipping costs, and interest rates
• Market: Has it changed? Are there new players? What are the fastest-growing markets? China is big on luxury goods. Who else?
• Why sales have been flat while other luxury good sales have been climbing: illegal knock-offs – maybe the Italian manufacturer started having the boots made in China, which reduced the quality
• Strategy to increase sales: expanding our distribution channels, changing the price, increasing the product line, as well as a major marketing campaign.

Question 5

The online brokerage division of a huge financial services firm is losing clients and market share. They want us to help them win back the market share that they lost, and then some.

Answer 5

(1) Why are we losing customers?
- price? quality of product? lack of support?
(2) How can we get them back?
- make appeals through contacts
- discounts or free trades
- personal phone calls for big clients
(3) How do we make sure that we don’t lose any more?
- customer survey
- Industry analysis to make our prices and services are very competitive
(4) Form a strategy to go after new clients.
- Develop a major marketing campaign
- Cross-sell services to our customers in other divisions.

Question 6

Profits have decreased– why? (what are things I forgot)

Answer 6

• What are the revenue STREAMS i.e. how do they get their money
• What is the conclusion? i.e. costs have risen, and distribution channel mix has not adjusted to customer shopping patterns

Question 7

Profits have decreased– why? (what are things I forgot)

Answer 7

• What are the revenue STREAMS i.e. how do they get their money
• What is the conclusion? i.e. costs have risen, and distribution channel mix has not adjusted to customer shopping patterns

Question 8

How to enter market with new tech product?

Answer 8

alone, joint venture, license tech

Question 9

How to calculate break-even?

Answer 9

investment cost / annual profit = years to break even

Question 10

How to calculate ROI?

Answer 10

(revenue - investment) / investment

Question 11

What to think about when companies are deciding to enter a market?

Answer 11

1. Financial - Cost of Investment vs. expected return; ROI, Breakeven, Opportunity Cost
2. Company - internal capability, biz alignment; cannibilization (will this steal revenue from existing products); synergies (will this make current biz components less costly; competitive adv. (what allows you to achieve beyond the competition)
3. Competition - Barriers to entry, market structure
   Competitive dynamics: growth rate, fragmentation, market share
   Barriers to entry: regulations, economies of scale (are there high fixed costs), access to dist. channels, product differentiation, switching cost

Question 12

What are the factors affecting World’s Finest Cognac Company in next five years?

Answer 12

Consumers:

• Who drinks Cognac?
• Have there been any trends towards or away from the drink in recent years?
• How can WFC market its product to gain sales? Regulatory barriers?

Competition:

• competitors?
• how large and profitable are they?