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Consulting > Strategy > Flashcards

Strategy Flashcards

1
Q

Population of France

A

Approx 70 million (67 million exactly)

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2
Q

Population of Europe

A

Approx 740 million

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3
Q

Average Life Expectancy in the Europe

A

79 years for men 84 years for women

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4
Q

Number of Households in France

A

Approx 25 million

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5
Q

Number of Households in Europe

A

Approx 200 million

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6
Q

What percentage of the world market does the United States represent

A

10%

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7
Q

What are the three types of market sizing questions?

A
  1. Population based
  2. Household based
  3. Preposterous
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8
Q

How to solve population based questions

A

Break down population by generation, make some assumptions about the behaviour of each generation, estimate a percentage, draw a chart

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9
Q

How to solve household questions

A

Break down households by income, assign a certain percentage per income level, make assumptions of the product importance at each income level, then total them up

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10
Q

How to calculate net income?

A

Net income = Revenues - Expenses (N = R - E)

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11
Q

How to calculate the breakeven point in units

A

Fixed costs / (price - variable cost)

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12
Q

How to calculate the breakeven point in price

A

(Total fixed costs / production unit volume) + variable cost per unit

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13
Q

How to calculate profit margin

A

Profit margin = net income / revenu

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14
Q

How to calculate return on investment

A

Profit from investment / investment cost

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15
Q

What are the steps of the Ivy Business Case System?

A
  1. Summarise the question
  2. Verify the objectives and ask if there are others that should be taken into account
  3. Ask clarifying questions
  4. Label the case and lay out your structure
  5. State your hypothesis
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16
Q

What are the four key business case scenarios?

A
  1. Profit and los
  2. Entering a new market
  3. Pricing
  4. Growth and increasing sales
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17
Q

How to calculate the revenue?

A

Revenue = quantity x price

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18
Q

How to calculate costs

A

Costs = (Quantity x variable costs) + fixed costs

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19
Q

How to calculate the profits and losses in a business case?

A

Profits = Environment x (Profits = revenues - costs) x Market

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20
Q

Steps to solve a new market case?

A
  1. Ask questions about the company
  2. The state of the current and future market
  3. Investigate the market to determine if entry makes good business sense
  4. Determine what the best way to enter a market it
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21
Q

What are the ways to enter a market

A
  1. Start from scratch
  2. Acquire an existing player
  3. Pursue a joint venture
  4. Outsource
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22
Q

How to learn more about why a company would like to enter a specific market?

A
  1. What are the profits and revenues for the last three years?
  2. What is the current product mix
  3. How will new product fit in
  4. How strong is the brand?
  5. Will current distribution channels suffice?
  6. What constitutes success?
  7. Can we keep the same staff? Will have to hire/fire/retrain?
23
Q

How to learn more about a current or future market?

A
  1. What is the current size of the market?
  2. What is the current growth rate?
  3. What is the industry lifecycle
  4. Who are the customers and how are they segmented?
  5. What is the current role of technology?
  6. What will the response of competitors be if we launch in this market?
24
Q

How to investigate the market to determine if entry makes sense

A
  1. Who are the competitors and what is their market share
  2. How to products differ?
  3. How are products priced?
  4. Are there substitutions easily available?
  5. What are the barriers to entry or exit?
  6. What are the risks?
25
Q

What are the reasons that a company would like to buy another?

A 
Market access
Diversify holdings
Prevent competition from doing so
Snuff out a potential threat
Inherit management
Obtain patents or licenses
Gain from synergies
Increase shareholder value
Tax advantages
26
Q

How to solve a pricing strategies case

A
  1. Investigate the company
  2. Investigate the product
  3. Determine the pricing strategy
27
Q

How to investigate the company in a pricing strategies case

A
  1. How big is the company?
  2. What is the current product mix?
  3. Is it the market leader or are their competitors?
  4. What is the current pricing strategy?
  5. Who determines pricing strategy?
28
Q

How to investigate the product in pricing strategies case

A
  1. How does product hold up against the competition?
  2. Are there substitutions or alternatives?
  3. Where is the product in the lifecycle? (Beginning, middle, or end?)
  4. Is there or will there be a problem with supply or demand?
29
Q

What are the different pricing strategies that are available?

A
  1. Competitive analysis
  2. Cost based
  3. Price based costing
30
Q

What is competitive analysis pricing?

A

Determine whether there are similar products and compare them. Determine if competitors have similar costs and analyse whether there is a supply and demand issue

31
Q

What is cost based pricing?

A

Take all costs, add them up and add a profit

32
Q

What is price based costing

A

Determine what people are willing to pay for something and build a product that fits their expectations with a margin

33
Q

How to solve a growth and increasing sales business case

A
  1. Learn about the company, size, resources, and products

2. Investigate the industry

34
Q

How to analyze a specific industry

A
  1. How is the indsustry doing?
  2. How are supplier relationships?
  3. What does the future look like?
35
Q

How to develop a new product

A
  1. What is the product like and how is it different than what is already available?
  2. What is the market strategy?
  3. Who are the current or target customers?
  4. How will the product be funded
  5. How much can we reasonably expect to sell?
36
Q

What does the Rogers Consumer Adoption/Innovation curve look like

A 
2,5% Innovators
13,5% Early adopters
34% Early majority
34% Late majority
16% Laggards
37
Q

In the Rogers Adoption curve, what percentage of the population are early adopters?

A

13,5%

38
Q

In the Rogers Adoption curve, what percentage of the population are either early or late majority adopters?

A

70%

39
Q

In the Rogers Adoption curve, what percentage of the population are laggards?

A

16%

40
Q

How to turn around a failing company

A
  1. Learn about company and operations
  2. Analyse products, services, and finances
  3. Secure sufficient financing
  4. Review talent and temperament of all employees and get rid of deadwood
  5. Determine short term and long term goals
  6. Devise a business plan
  7. Visit clients, suppliers, and distributors to understand more about environment
  8. Prioritise goals and get small wins
41
Q

How to cut labor costs

A
  • Cross Train
  • Cut overtime
  • Raise employe contribution to health care
  • 4 ten hour days instead of 5 8 hour days
  • Convert workers to owners
  • Contemplate layoffs
  • Institute pay decreases
42
Q

How to cut production costs

A
  • Invest in technology
  • Consolidate production space to gain scale
  • Create flexible production (JIT)
  • Reduce inventory
  • Outsource
  • Renegotiate with suppliers
  • Consolidate suppliers
  • Import parts
43
Q

How to cut finance costs

A
  • Have customers pay sooner
  • Refinance your debt
  • Sell non-essential assets
  • Hedge currency rate
  • Redesign health insurance plan
44
Q

What to do if sales are flat and profits are declining

A

Analyze revenues and costs.

45
Q

What to do if sales are flat but market share is constant and competitors are having the same problem

A
  1. Analyze market demand
  2. Market may be mature or product has become obsolete
  3. Presence of substitutions
46
Q

What to do if sales are increasing and profits are declining

A

Check to see if prices are dropping or costs are climbing

47
Q

What to do if profits are declining because of a drop in revenues

A

Concentrate on marketing and distribution

48
Q

What to do if profits are declining because of rising expenses

A

Concentrate on operational and financial issues

49
Q

What to do if profits are declining but revenues have increased

A
  1. Research changes in cost
  2. Check additional expenses
  3. Check price changers
  4. Check product mix
  5. Customer needs
50
Q

What to do if product is emerging?

A

Concentrate on R&D, competition and pricing strategies

51
Q

What to do if product is in growth stage?

A

Analyse marketing and competition

52
Q

What to do if product is in mature stage?

A

Analyse manufacturing costs and competition

53
Q

What to do if product is in declining stage?

A
  1. Decide if the product will still attract a niche market
  2. Analyse the competitors performance on a similar product
  3. Think about an exit strategy
54
Q

How do prices remain stable?

A
  1. Growth rate remains stable for all competitors
  2. Prices parallel costs
  3. Prices of competitors are roughly the same?

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