Frameworks

Question 1

How to grow the Business framework (2 Layers)

Answer 1

1. Grow the core Business
   - Growth with current segments
   - Focus on the fastest growing segment
2. Grow outside of the core business
   - sell new products to existing clients
   - use capabilities to get into new businesses

Question 2

How to reduce costs (2 layers)

Answer 2

1. Reduce the need
   - eliminate the need entirely (self service)
   - reduce the service level (no more free snacks)
2. Meet the need with less resources
   - eliminate waste
   - improve productivity
3. Reduce the cost of resources
   - find cheaper alternatives
   - renegotiate costs

Question 3

Enter a new market (2 layers)

Answer 3

1. Market opportunity
   - market size
   - market growth
2. Potential share
   - competitors
   - customer needs
   - our offering
3. Potential Profit
   - Investment
   - Running costs
   - revenue
4. Capabilities & risks

Question 4

How to launch a new product (2 layers)

Answer 4

1. Choose a target segment
   -size and growth
   -competition
   -customer needs
2. Define our strategy
   - Product
   - Price
   - Promotion
   - Distribution

3 Implementation

Question 5

How to price a new product (2 layers)

Answer 5

1. Costs
   - Variable
   - Fixed
   - Investment costs
2. Clients willingness to pay
3. Competitors or substitutes (should we price under competition)

Question 6

Whether to acquire a new business (2 layers)

Answer 6

1. Stand alone value
   -future revenue
   - future costs
   - valuation multiples
2. Synergies
   - revenue growth
   - cost reduction
3. Capabilities and risks

Question 7

Whether to make an investment

Answer 7

1. Impact on costs
2. Impact on revenue (Breakeven?)
3. Implementation

Question 8

How to respond to a competitive threat

Answer 8

1. Potential impact on our business
   - segment affected
   - estimated loss (how much are we likely to lose)
2. Opportunity pursued by competitor
   - size
   -profitability (are they after an opportunity)
3. Possible responses
   - do nothing
   - mitigate (retain our clients- loyalty scheme)
   - align (lower prices)
   - replicate (release competing offer)
   - collaborate

Question 9

How to optimise a process (2 layers)

Answer 9

1. Map out our current process (Capacity utilisation? Bottleneck?)
2. Look into each step of the process
   -eliminate
   - reduce costs
   - increase speed
   - increase quality
   - anticipate
3. Estimate gains