Now that the interviewee realizes that the failing product lines are failing due to the transit of goods across the Pacific ocean, they must brainstorm some methods to fix this.
Some possible answers are:
- Moving operations to the US
- Building a warehouse in the US to store goods in anticipation of orders
- Flying products over
Ultimately, the interviewee needs to realize that all of those options are both more expensive and take time + capital to implement, dramatically affecting margins. They should also realize that it is not an option to price compete, as this will also reduce margins.
The ideal solution for our client is to stop selling the product lines that are currently selling poorly in the US: Wheels, Airbags, and Seatbelts.
- They could look to increase the prices we charge on carburetors and A/C Units, or promote them more aggressively in the US
- They could also look to continue to leverage their presumed strengths regarding time to delivery in Japan and Korea for Wheels, Airbags, and Seatbelts
- They could look to identify parts with characteristics similar to carburetors and A/C units that we can be sold in the US market to replace lost profits and create new revenue streams
This is a candidate-led case, the style of which could be seen across a range of consultancies, but particularly BCG and Bain. The case is split into 3 main parts:
In addition to the above, this case tests a candidate's understanding of profitability, the automotive industry, globalisation, and, of course, chart reading.
The following can be verbally provided to interviewee if asked: