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Consulting > Industry > Flashcards

Industry Flashcards

1
Q

What are oil and gas customer segments?

A
  • Petroleum refiners
  • Domestic and commercial users
  • Electricity generators
  • Governments
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2
Q

What is OPEC?

A

Organization of the Petroleum Exporting Countries

Controls oil prices

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3
Q

What is PV-10?

A

Estimated future earnings based on reserves with 10% discount rate

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4
Q

What are upstream, midstream, and downstream?

A
  • Upstream: Drilling and extracting raw oil (usually contracted out)
  • Midstream: Transporting the raw oil
  • Downstream: Refining and selling the finished petroleum products
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5
Q

What is fracking?

A

Injecting liquids into rocks to extract oil and gas

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6
Q

What are renewables?

A

Solar, wind, hydropower, biomass, geothermal

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7
Q

What are oil and gas revenue streams?

A
  • Upstream: Crude oil price
  • Midstream: Transportation fees
  • Downstream: Sale of gasoline, oils, fuel, refining products like lubricant, gas stations (and associated sales)
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8
Q

What are oil and gas cost drivers?

A

Upstream
• Exploration (e.g., land leases)
• Rig rates (usually daily) & rig utilization
• Drilling and extraction equipment & labor

Midstream
• Crude oil
• Storage
• Transportation
• Pipeline construction

Downstream
• Crude oil
• Refinery equipment & labor

Overall
• High investment costs
• Sales and marketing

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9
Q

What are oil and gas risks?

A
  • Access to reserves
  • Energy policies
  • OPEC decisions
  • Political pressures
  • Substitutions/ renewables
  • Spills
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10
Q

What are oil and gas channels?

A
  • Retail
  • Wholesale
  • Commercial
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11
Q

What are key economic drivers of oil and gas?

A

Government regulation

International oil product demand

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12
Q

What are key energy cost drivers?

A
  • Transportation / Distribution costs
  • Storage Costs
  • Production Costs: Labor + Materials
  • Plant Development Costs
  • Depreciation & Taxes
  • Overhead
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13
Q

What are key trends in oil and gas?

A
  • Price volatility
  • Technological innovation to unlock shale gas
  • New market entry
  • New sources of supply
  • Heightened focus on sustainability
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14
Q

What is consolidation in airline industry?

A

Bringing the weaker airline’s assets and infrastructure into the stronger airline then consolidates and enhances the stronger airline’s market position

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15
Q

What are key ideas in the airline industry?

A

• Consolidation in industry
• Low cost carriers and fare competition on
competitive routes
• Online booking and check-in
• Expansion of domestic and international routes
• Capacity optimization (Load Factor)

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16
Q

What is capacity optimization and load factor in the airline industry?

A

An airline’s capacity utilization measures how efficiently an airline fills seats on its planes. We use airline’s load factor (passenger-miles as a proportion of available seat-miles) to proxy for capacity utilization.

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17
Q

What are revenue streams in the airline industry?

A

• Ticket sales to economy and business
passengers
• Charges for baggage and on-board services (upselling)
• Cargo transportation and fees
• Credit cards
• Value-added services (food & drinks, WiFi, extra legroom, etc.)
• In flight purchases (e.g., food and beverages,
entertainment)
• Tiered amenities (e.g., extra leg room seats)
• Ancillary revenue (e.g., reservation changes)

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18
Q

What are key cost drivers in the airline industry?

A 
• Gate leases
• Fuel
• Aircraft leases
• Insurance & Legal fees
• Maintenance / equipment
• Crew & ground staff salaries
• In flight consumables (e.g., food and beverages,
entertainment)
• Marketing
• Technology (e.g., booking system)
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19
Q

What are customer segments in the airline industry?

A
  • Leisure travelers – (generally price sensitive)
  • Business travelers – (very important to airlines due to margins and services purchased)
  • Freight/Cargo transportation
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20
Q

What are channels in the airline industry?

A

Mobile apps
Airline websites
3rd party travel sites
Airline sales team: call centers, online, or kiosk
Travel management companies (TMCs) serving corporate clients, travel agents

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21
Q

What are risks in the airline industry?

A
  • Changes in fuel prices
  • Macroeconomic conditions impact leisure travelers
  • Competition, particularly from highly government-• subsidized foreign airlines
  • Government regulation and equipment failure
  • Labor unrest/strikes
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22
Q

What are key economic drivers in the airline industry?

A
  • World price of crude oil
  • Trips by US residents
  • Optimization of capacity
  • Per capita disposable income
  • COVID- 19
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23
Q

What are key trends in the airline industry?

A
  • Major consolidation within industry due to high fixed costs
  • Rise in third party booking websites (e.g., Booking.com, Expedia)
  • Airlines use rewards programs (miles) and partnerships with hotels, car rentals, and credit card companies to increase loyalty/differentiate
  • Low-cost carriers ( e.g , Southwest, Spirit) creating price wars
  • Reduce costs by fuel efficiency opportunities and route optimization
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24
Q

What are key ideas in the automative industry?

A
  • Automakers, Original Equipment Manufacturers (OEMs), Replacement Parts Production, Rubber Fabrication
  • Highly capital and labor intensive
  • Competition due to foreign automakers
  • Unions
  • Technology innovations such as electric vehicle and autonomous driving
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25
Q

Who are key players in oil and gas?

A
  • BP
  • ExxonMobil
  • Marathon Petroleum
  • Royal Dutch Shell
  • Schlumberger
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26
Q

Who are the major players in the airline industry?

A
  1. American Airlines
  2. Delta Air Lines
  3. United Airlines
  4. Emirates
  5. Southwest Airlines
  6. China Southern Airlines
  7. Ryanair
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27
Q

What are the revenue streams in the automotive industry?

A
  • New car sales
  • Auto part sales
  • Services offered with vehicle purchase
  • Financing
  • Extended warranties
  • Leasing
  • Servicing
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28
Q

What are the cost drivers in the auto industry?

A
  • Labor
  • Materials
  • Advertising
  • Financing costs
  • Recall costs
  • Infrastructure costs
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29
Q

Who are the customer segments in the auto industry?

A
  • Cars, vans, pickup trucks, and SUVs
  • Personal car buyers
  • Rental car companies
  • Commercial purchasers
  • Government purchasers
  • Preferred employers
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30
Q

What are the channels in the auto industry?

A
  • Automobile dealers
  • Secondary automobile market
  • Automotive parts/services outlets
  • Direct to consumer
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31
Q

What are the risks in the auto industry?

A
  • Globalization of the industry enables more ease of foreign competition
  • Extensive competition impact on already low margins
  • Changes in consumer trends and tastes
  • Everchanging mobility industry
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32
Q

What are key economic drivers in the auto industry?

A
  • GDP growth
  • Disposable income growth
  • Price of crude oil
  • Steel prices
  • Consumer confidence index
  • Yield on Treasury note
  • Shift towards electrification
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33
Q

What are key ideas in customer products and retail?

A
  • Same store sales
  • Sales per square foot
  • Inventory management and turn-over
  • Seasonality/recessions
  • Digital marketing
  • Private label vs. wholesale
  • Direct-to-consumer vs. in-store/retail
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34
Q

What are key metrics in the retail industry?

A

• Sales per square foot
• Inventory turnover ratio: divide the cost of goods by average inventory for the same period
• Total revenue = traffic * conversion rate * basket
size * avg. price per item

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35
Q

What are revenue drivers for retail?

A
  • Product sales (brick & mortar, online)
  • Slotting fee
  • Advertising
  • Affiliate marketing / brand partnerships
  • Cross-selling additional products and services
  • Loyalty and rewards programs
  • Conversion rate (visits vs purchases)
  • Basket size (driven by consumer spending)
  • Avg. price per item
  • Margin retailer makes vs. distributor vs. manufacturer
  • Other revenue (e.g., after sales services)
  • Macro-economic health and disposable income
  • New customers; existing customers
  • Average spend per customer
  • New channels
  • Pricing power
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36
Q

What is a slotting fee?

A

A cost that manufacturers pay to place their products on retail shelves

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37
Q

What are cost drivers for retail?

A
  • Cost of goods sold
  • Returns
  • Inventory management (warehouse, storage, and stock)
  • Distribution
  • Delivery and Transportation
  • Labor (workforce, in-store employees)
  • Real estate
  • Online retail – technology cost
  • Rent and utilities
  • Marketing
  • Influencers / Brand Ambassadors
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38
Q

What is basket size?

A

Number of items getting sold in a single purchase

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39
Q

What are customer segments in customer products and retail?

A
  • Dependent on the type of product sold
  • Income
  • Socio-economic status
  • Age
  • Normal vs. inferior good
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40
Q

Who are the major players in CPG and retail?

A
  • Amazon
  • Coca-Cola
  • Nike
  • P&G
  • Unilever
  • Walmart
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41
Q

What are CPG and retail channels?

A
  • Department Stores/Big box retailers
  • Direct to Consumer
  • Discount retailers
  • Demographic retailers
  • Brand websites
  • 3rd party sellers (Amazon)
  • E-commerce resellers
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42
Q

What are risks in the CPG and retail industry?

A
  • Changes in disposable income
  • Demand and supply issues
  • Overstock
  • Easy entry invites competition
  • Change in consumer demand
  • Increases in input costs
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43
Q

What are key economic drivers in CPG and retail?

A
  • Consumer Confidence index
  • Per capita disposable income
  • International Export/Import
  • Gross Domestic product/inflation
  • Commodity prices (e.g. gold price for jewelry)
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44
Q

What are important trends and considerations in the retail industry?

A
  • Seasonality is a big factor in retail sales – large portion of sales occur in holiday season / end of year
  • Industry is very impacted by economic conditions
  • Social media presence has a large impact on brand strength and perceptions, especially with growth of influencers
  • Omnichannel retail is growing through e-commerce development or acquisition
  • More private label products (i.e. Walmart brand instead of manufacturer brand)
  • Use of big data to tailor the shopping experience – added focus on customer experience
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45
Q

What are key ideas in financial services industry?

A
  • Consolidation/acquisitions
  • Increased mobile banking and digitization
  • Physical and digital channel innovation
  • Customer attrition rate
  • Offshoring of call centers and back-office functions
  • Cross selling financial services
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46
Q

What are cost drivers for CPG?

A
  • Cost of goods sold (raw materials)
  • Manufacturing facilities (owned or leased)
  • Packaging
  • Distribution & inventory management
  • Marketing
  • R&D – new product innovation
  • Environmental and regulatory costs
  • Durables – spoilage
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47
Q

What are revenue drivers for CPG?

A
  • Sales direct to consumer (higher margins)
  • Sales to retailers (lower margins)
  • Shelf placement in stores
  • Packaging and price tiering
  • Product mix (cannibalization vs. complementary products)
  • Acquisitions
  • Product sales (brick & mortar, online)
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48
Q

What are important trends and considerations in CPG?

A
  • Discounts and price promotions have lowered margins
  • Cannibalization can be a concern when introducing new products, so firms regularly rationalize brands
  • Tariffs and regulations play a role in imports / exports and where the firm is manufacturing or sourcing
  • Small firms compete via specialization or local targeting
  • High buyer power for retailers (e.g., Walmart)
  • Demand has recently increased for organic / socially minded companies
  • In-store experiences are one way to increase direct to consumer sales
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49
Q

What are revenue drivers in financial services?

A

• Fixed or Variable Fees (trading commissions, M&A fees,
asset management fees, transaction fees, currency
exchange)
• Premiums – credit card APRs
• Locker rent
• Loan interest (Loan types: Real estate, Auto, Personal, Education)• Spread between interest rate charged and Fed rates
• Credit cards

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50
Q

What are cost drivers in financial services?

A
  • Interest rates on deposits
  • Branch and compliance costs
  • Overhead costs: paper fee, error rate costs for manual processing
  • IT (back-end processing, security, apps & websites)
  • Real estate costs (physical branches)
  • Labor (customer service commonly off-shored)
  • Marketing
  • Research (e.g., on securities)
  • Losses on investments (e.g., loan defaults)
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51
Q

Who are major players in financial services?

A
  • Bank of America
  • BlackRock
  • Citi
  • Fidelity
  • Goldman Sachs
  • J.P. Morgan
  • Wells Fargo
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52
Q

What are customer segments in financial services?

A
  • Wealth: deposit balances, income
  • By lifestyle: buying behavior
  • Size: small businesses and consumers
  • Age: under 35 adapt to technology better
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53
Q

What are channels for financial services?

A
  • Savings and loan
  • Credit union
  • Traditional checking
  • Online banking
  • Microfinance
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54
Q

What are risks for financial services?

A
  • Change in savings behavior
  • Loan default
  • Interest rate and federal funds rate changes
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55
Q

What are key economic drivers in the financial services industry?

A
  • Consumer confidence
  • Household debt
  • Employment statistics
  • Urbanization
  • Home and car buys
  • Disposable income
  • Interest rate
  • Government Regulation
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56
Q

What are key trends and considerations in the financial services industry?

A
  • Use of AI / Blockchain to verify transactions
  • Growth of mobile banking; disruption in the industry from Fintech and online banks
  • Changing customer acquisition model increased emphasis on relationship building with customers
  • Regulations within the industry e.g. Dodd Frank increased capital requirements for banks
  • Changes in customer demographics creating a larger market for retirement products
57
Q

What are key ideas in healthcare?

A
  • Affordable Care Act
  • Highly fragmented: Top 50 organizations account for 15% revenues
  • Employers pushing health care costs onto employees
  • Aging Baby Boomer population driving increased revenues
58
Q

What are revenue drivers in healthcare?

A 
• Hospital care
• Physician and clinical services
• Prescription drugs
• Dental services
• Risk stratification (insurance)
• Research, Technology, Equipment
• Collections from third-party payers (i.e. insurance
companies)
• Co-payments
• Government reimbursement (~50% of spend)
• Inpatient & outpatient treatment costs (without insurance)
• Insurance premiums
• Government subsidies
59
Q

What are cost drivers in healthcare?

A

• Clinical care (impatient and outpatient services)
• Dependent on segment
• Significant costs related to new technology implementation
• Often inefficient organizational structures
• High upfront investment in hospital facilities and
equipment
• R&D costs
• Physicians (i.e. doctors & nurses)
• Medical suppliers
• Insurance (malpractice liability)
• SG&A
• Payouts to healthcare providers – insurance companies
often negotiate directly with healthcare providers on
reimbursement rates; billed price is typically paid at a
discount
• Re-insurance
• Other labor

60
Q

What are customer segments in healthcare?

A
  • Patients/consumers
  • All generations and segments of the population require different products/services (age groups, geographic location, underlying health conditions)
61
Q

What are healthcare channels?

A
  • Hospitals
  • Doctors offices
  • Nursing homes
  • Outpatient surgery centers
  • Pharmacies
  • Medical equipment
  • Payer vs. Provider
62
Q

What are key metrics of the healthcare industry?

A

Providers
• Bed capacity utilization
• # of deaths in surgery
• # of patients seen

Insurance
• # of doctor visits
• # of people employed
• Population age
• Total health expenditures
63
Q

What are healthcare risks?

A
  • Affordable Care Act (ACA) – changes in payment models (from fee for service to value-based care)
  • Funding availability
  • Integrated health systems – consolidation horizontally and vertically
64
Q

What are key economic drivers in the healthcare space?

A
  • Regulation for health medical insurance
  • Federal funding for Medicare and Medicaid
  • Aging population
  • Advances in medical care and technology
65
Q

What are key trends and considerations in the healthcare space?

A

• Market is slowly consolidating (the top 4 payers are 35%), with the rest fairly fragmented.
• Industry has been affected by healthcare reform increases in bottom-line due to pressure to eliminate / lower coverage caps,
reduce denials based on pre-existing conditions, and increase in the insured population
• Firms differentiate based on broader network coverage, lower administration fees, steeper discounts on provider charges, and add ons (e.g., case management)
• Price comparisons occur on exchanges / online marketplaces
• Aging population
• Payer consolidation
• Influence of technology on personalized medicine and prevention
• New R&D technologies driving specialization

66
Q

Who are key players in the healthcare industry?

A
  • Aetna/CVS
  • CIGNA/ Express Scripts
  • Blue Cross Blue Shield
  • Kaiser Permanente
  • Johnson & Johnson
  • Pfizer
67
Q

What are key ideas in the manufacturing and production industry?

A
  • Direct-to-consumer
  • Data driven analytics
  • Sustainability
  • Just-in-time (JIT) inventory
  • Commodities
  • Bottleneck
  • Outsource
68
Q

What are revenue drivers in manufacturing and production?

A
  • Economies of scale
  • Ingredient sourcing (location, quality)
  • Contract production (loaning underutilized equipment)
69
Q

What are cost drivers in manufacturing and production?

A
  • Raw materials
  • Labor & wages
  • Capacity constraints
  • Overhead
  • Depreciation
70
Q

Who are customer segments in manufacturing and production?

A
  • Distributors
  • Retailers
  • Ancillary organizations in need of excess production capacity
71
Q

What are risks of manufacturing and production?

A

• Savings dependent upon economies of scale and vendor relationships
• Changes in disposable income and consumer tastes
• Accurately forecasting demand and supply
Globalization creates cheaper overseas production

72
Q

What are key economic drivers in manufacturing and production?

A
  • Trade-war & tariffs
  • GDP
  • Changes in the supply of domestic natural resources
  • COVID-19
73
Q

What are key ideas in media and entertainment?

A
  • Create, license and / or distribute content (TV shows, movies, music, news, video games, books, magazines, radio shows, advertising, etc.)
  • Developing/acquiring multiple brands and multiple distribution channels
  • Digitalization
  • Corporate consolidation
74
Q

What are revenue drivers in media and entertainment?

A
  • Advertising (largest revenue category, especially for media, offered free to customers)
  • Content sale/subscription
  • Subscription fees
  • Content licensing/distribution
  • Merchandising
  • IRL events/experiences (e.g., theme parks, concerts, etc.)
  • One-time purchases
75
Q

What are cost drivers in media and entertainment?

A

• Media production (e.g., studios, equipment, printing
presses)
• Marketing & distribution
• Investment in digital technologies
• IP/content acquisition/licensing
• Talent (e.g., actors, editors, writers)
• Other labor (e.g., sales staff)

76
Q

What are customer segments in media and entertainment

A 
Individual customers segmented by:
• Demographic
• Age
• Genre preferences
• Geography
• Traditional target TV demo: 18-49 year-olds
77
Q

What channels do media and entertainment use?

A
  • Cinema
  • Traditional TV (broadcast & cable) and home video
  • Internet advertising
  • Video games and e-sports
  • Book/magazine publishing
  • Music, radio, podcasts
  • Over-The-Top (OTT)
78
Q

What risks are present in the media and entertainment industry?

A
  • Tech companies pose competition for advertising
  • Competition for best content/artists/IP
  • Distribution of traditional distribution models
  • Evolving consumer habits/preferences
79
Q

What are key economic drivers in media and entertainment?

A
  • The growth of streaming and mobile video
  • Control/ownership of IP and artistic talent
  • Piracy and copyright enforcement
  • Platform-exclusive content
  • Multi-channel franchises
  • Royalties and monetization
80
Q

What are key industry trends and considerations in media and entertainment?

A
  • Most media has shifted to omnichannel presence
  • Digital media has low barriers to entry, creates downward pressure on ad prices, and increases piracy risks
  • Consumer and advertising spending is highly influenced by macroeconomic conditions
  • Augmented reality / virtual reality technology
81
Q

What are key ideas in the non-profit/social sector?

A
  • Central mission/purpose (impact metrics) is more important than traditional business metrics (i.e., revenue, EBITDA)
  • Target high-impact issues
  • Can focus on micro, local issues or global problems
  • Funding / scalability / sustainability
82
Q

What are revenue drivers in the social sector?

A
  • Grants
  • Private donations
  • Endowments
  • Corporate sponsorships
  • Services provided by organization to be reinvested in organization
  • Ticket sales (for charity events)
  • Memberships (for museums or other similar organizations)
  • Tuition (for educational institutions)
  • Government subsidies
83
Q

What are cost drivers in the social sector?

A
  • Labor (workforce, employees)
  • Real estate
  • Technology cost (website/app maintenance)
  • Materials
  • Administrative functions
84
Q

What are important trends and considerations in the social sector?

A
  • Growing emphasis on companies to incorporate more corporate social responsibility initiatives and non-profit arms into their organizations
  • Growing emphasis on environmentally-conscious initiatives and sustainability
85
Q

What are the key ideas for the pharma industry?

A
  • Affordable Care Act
  • Aging population
  • Patents and generics
  • Research & Development
  • Insurance
  • FDA
  • Contract vs in-house salesforce
86
Q

What are the revenue drivers for the pharma industry?

A

• Insurance payments
• Due to significant R&D lead times revenue is highly volatile
• Seasonality is high on certain products (vaccines and cold medicine) and low on other products (pain medicines)
• Drug sales – difference in price comes from OTC /
prescription drugs
• 3rd party payer reimbursement
• Government subsidies

87
Q

What are cost drivers for pharma?

A
  • Research & Development
  • Marketing costs
  • Wages
  • Liability insurance and legal fees
  • Regulatory and legal costs (e.g., patents, FDA)
  • Manufacturing and production costs
  • Distribution and sales
88
Q

Who are customer segments for pharma?

A
  • Medical patients
  • Prescribing doctors
  • Government insurance programs
  • Health insurance companies
89
Q

What are channels for pharma?

A
  • Over the counter (OTC)
  • Prescription drugs: Hospitals, pharmacies
  • Mail order pharmacy: Express Scripts, Walgreens
  • Provider offices/clinics
90
Q

What are the risks for pharma?

A
  • Generic manufacturers pose a major competitive threat following patent expiration
  • Tariff barriers are no longer a relevant form of protection
  • Unfavorable government healthcare regulations
91
Q

What are the key economic drivers for pharma?

A
  • Median age of population
  • Research and development expenditure
  • Insurance and regulatory landscape•
  • Patent protection
  • Innovation
92
Q

What are pharma metrics?

A

• # of patented drugs
• Market sizing: total population à % with illness à
% diagnosed à market share of drug à price of
one dose * # of doses per year

93
Q

What are key trends and considerations for pharma?

A
  • High growth in emerging markets
  • Patents protect drugs for up to 20 years
  • First mover advantage is real
  • FDA approvals last 5 years with a high failure rate of drugs – many drugs fail during three phases
  • Increasing demand for pricing transparency
94
Q

What are key ideas for PE and M&A?

A
  • Exit: strategic or IPO
  • Synergies
  • Stability of cash flows (IRR, NPV)
  • Strong management team
  • Targeted returns ~ 40%+
  • Un-invested capital vs. invested
94
Q

What are key ideas for PE and M&A?

A
  • Exit: strategic or IPO
  • Synergies
  • Stability of cash flows (IRR, NPV)
  • Strong management team
  • Targeted returns ~ 40%+
  • Un-invested capital vs. invested
95
Q

What are revenue drivers for PE and M&A?

A 
• Components of the revenue charge
- Invested capital
- Transaction and advisory fees
- Carried interest
• Value creation: selling underperforming assets, pricing optimization, diversifying customer base, operations efficiency
• Revenue from the acquired firm
• Other consulting/advisory services
96
Q

What are cost drivers for PE and M&A?

A
  • Wages and profit-sharing
  • Administrative costs (regulatory filings, record keeping, accounting and travel)
  • Outsourcing of capital-intensive IT functions for algorithmic trading
  • Deal Fees
  • Overhead costs
97
Q

Who are investors?

A
  • Pension funds (largest share)
  • Private investors (e.g. High net worth individuals)
  • Banks, sovereign funds and life insurance companies
98
Q

What are averages in the PE and M&A industry?

A

• Large firms focus on deals ~$1B; middle market firms cover deals between $15M - $1B
• Average holding period before sale has increased from 3 years to 6 years in the past 15 years
• Borrowing can typically range from 65% to 85% of the purchase price of the firm
• Fees on committed capital (0-3%, average 2%) – usually
needs to beat the hurdle rate* of 6-12% per year
• 20% gross profit upon sale of company

99
Q

What are risks in the PE and M&A industry?

A
  • New regulation 🡪 compliance costs, Rising competition 🡪 decreasing industry fees
  • Competition also exists with sovereign wealth funds and corporate buyers
  • Changes in tax structure
100
Q

What are key economic drivers in the PE and M&A industry?

A
  • Investor uncertainty/Pension demand
  • Access to credit/interest rates
  • Regulations
  • Exit opportunities
  • GDP/Investment returns
101
Q

What are important considerations and trends in PE and M&A industry?

A

• Two main types of PE firms: active (give operational support to management and increase synergies) and passive (depend on management to grow company)
• Exit opportunities include selling its position to a competing firm or M&A with another company, putting its private companies
up for IPO, or shutting down and selling off assets
• PE firms create value through deal origination and execution, and through portfolio oversight and management
• Typical target companies for PE firms include:
• High potential companies (like a venture capital firm)
• Company with value tangible or intangible assets

102
Q

What are key ideas in the restaurant industry?

A
  • Newer “ fast-casual” restaurants threaten to steal market share from both QSR and full-service restaurants
  • Implementation of technology to increase profitability
103
Q

What are revenue drivers in the restaurant industry?

A
  • Food and beverages (usually the higher-margin products)
  • Merchandise
  • Catering
  • Franchising fees
  • Licensing
104
Q

What are the cost drivers in the restaurant industry?

A
  • Labor
  • Raw Material
  • Real Estate
  • Marketing
105
Q

What are the customer segments in the restaurant industry?

A
  • Preferred/loyal customer
  • By location or neighborhood
  • Purchase decision
106
Q

What are channels in the restaurant industry?

A
  • Dine-in
  • In-house Delivery
  • Outsource Delivery
  • Pick up
107
Q

What are risks in the restaurant industry?

A
  • Maintaining a safe environment for employees, contractors, and other visitors
  • Wage and hour lawsuits
  • Liquor liability
  • Food allergies
  • Food-borne illness/contamination
108
Q

What are key economic drivers in the restaurant industry?

A
  • GDP growth
  • Consumer Confidence index
  • Per capita disposable income
109
Q

What are the key ideas in the tech industry?

A
  • SaaS
  • Software
  • Hardware
  • Digital
  • AI, Could, IoT, Blockchain
110
Q

What are the revenue drivers in the tech industry?

A
  • Advertising and data collection (services offered free)
  • Subscription
  • Direct sales
  • Service fees
  • Licensing fees
111
Q

What are cost drivers in the tech industry?

A
  • Product development
  • R&D for innovation
  • IT infrastructure
  • Customer acquisition
  • Traditional costs (physical stores, inventory, labor are very low)
  • Wages and human capital
112
Q

What are the customer segments in the tech industry?

A
  • Individual user
  • Corporations
  • Professional service providers
113
Q

What are the channels in the tech industry?

A
  • Online / e-commerce

* Retail

114
Q

What are risks in the tech industry?

A
  • Competition
  • Innovation
  • Piracy
  • Privacy
  • Patent expiration / generics
115
Q

What are key economic drivers in the tech industry?

A
  • Overseas production efficiencies

* Trade-wars and tariffs

116
Q

What are important trends and considerations in the tech industry?

A
  • Innovation in the industry has reduced product life spans and increased obsolescence
  • Firms are trying to create ecosystems (e.x. Google Home, Amazon Echo)
  • Businesses want dynamic software with low implementation costs
  • Software sales are highly dependent on network effects
  • Key Terms: Internet of Things, cloud computing, Blockchain, AI / Machine Learning, GDPR, SaaS, Intellectual Property (IP), Freemium
117
Q

What are key ideas in telecomm?

A
  • Deregulation led to spur of new companies
  • Bottlenecks: High capital, scarce operating skills and management experience
  • Shift from telephones to internet-based services for mobile
  • Bundling of services
118
Q

What are revenue drivers in telecomm?

A
  • Voice calls
  • Additional lines/family plans
  • Text and image communication
  • Data subscriptions
  • Bundling with video, music & games content
  • Value Added Services
119
Q

What are cost drivers in telecomm?

A
  • Infrastructure
  • Frequency licenses
  • Wages
  • Marketing and advertising
120
Q

Who are customer segments in telecomm?

A
  • Retail/individual customers
  • Residential and Small Business (Price sensitive)
  • Large multinationals (Price insensitive)
121
Q

What are channels in telecomm?

A
  • Retail stores - carriers and mass retailers
  • Direct sales force
  • Online
122
Q

What are risks in telecomm?

A
  • Rapid development of technology
  • High exit barriers
  • Systems not reusable across industries
  • Commoditized services
123
Q

What are key economic drivers in telecomm?

A
  • Investment in rising technology services
  • Number of subscriptions to additional services
  • Number of broadband and mobile internet connections
124
Q

Who are the major TMT players?

A
  • Apple
  • AT&T
  • Comcast
  • Disney
  • Facebook
  • Google
  • IBM
  • Microsoft
  • Netflix
125
Q

What are the key ideas in the utilities industry?

A
  • Increase in energy consumption
  • High investment costs and regulations
  • Industry structure is disintegrating into smaller supplier segments
  • Seasonality
  • Gov. incentives for sustainable initiatives
  • Bundling services with renewable
126
Q

What are the revenue drivers in the utilities industry?

A
  • Transmitted electricity: baseload and intermittent electricity
  • Baseload (95% of industry)
  • Coal, natural gas, nuclear, other
  • Intermittent: renewable energy
127
Q

What are cost drivers for the utilities industry?

A 
• Purchased power accounts (nearly half of total cost)
Infrastructure
• Wages
• Marketing
• Maintenance contracts
128
Q

What are the customer segments for utilities?

A
  • Commercial and Industrial

* Residential

129
Q

What are the channels for the utilities industry?

A
  • Transmission lines/pipelines

* Upstream electricity generators

130
Q

What are the risks for the utilities industry?

A
  • Clean energy threatens the future of traditional power generation methods
  • Seasonal demand leads to uncertain estimates
  • Energy efficient appliances decrease consumption
131
Q

What are the key economic drivers for the utilities industry?

A
  • Economies of scale
  • Industrial production index
  • Climate/seasonality
132
Q

What are industrials?

A

Provides products and services primarily used to produce other goods. Main sectors include electrical equipment / components, heavy machinery, construction, and aerospace and defense. Main customers include the government, OEMs, and B2B. Market is very
consolidated, functioning as an oligopoly

133
Q

What are revenue drivers for industrials?

A

• Volume (driven by product type and demand)
• Contract length
• Bundling of product and services (e.g. maintenance
package)
• Customization (made to order vs. large batch)
• New technologies and products (automation)

134
Q

What are key cost drivers for industrials?

A
  • Manufacturing – capital intensive (can be leased / owned)
  • Raw materials
  • Labor – often unionized
  • R&D
  • Marketing & trade shows
  • Distribution & inventory management
135
Q

What are key revenue drivers for industrials?

A

• Volume (driven by product type and demand)
• Contract length
• Bundling of product and services (e.g. maintenance
package)
• Customization (made to order vs. large batch)
• New technologies and products (automation)

136
Q

What are key metrics for industrials?

A
  • Capacity utilization
  • Inventory turnover
  • Book-to-bill ratio
137
Q

What are important considerations and trends for industrials?

A
  • Tied to gross domestic product (GDP) growth, production and capacity utilization, and economic indicators
  • Greatly impacted by recession, as drop in overall capital and construction spend decreases
  • Local assembly is cheaper because it’s easier to ship
  • Push to just-in-time inventory
  • Often commoditized, with high switch costs

Consulting (4 decks)

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