Information to be revealed to the interviewee upon request structured in the 3C&P framework for your convenience:
Company:
1) The client only has 50,000€ remaining in their bank account. This money must not be spent completely. At the end of any month, the balance on that account must be larger than 2,000€ otherwise your client can be considered bankrupt. You have the remaining 48,000€ available to spend and you need to ensure that monthly revenue exceeds monthly costs before the 48,000€ run out.
2) The client has to pay 10,000€ each month as loan payments.
3) The fitness model has a YouTube channel. The channel is mainly about training programs, the correct execution of strength-building exercises, and nutritional advice to maximize muscle gain while at the same time losing as much fat as possible.
He has a huge following of teenagers and young adults which happens to be the target demographic that consumes the largest amount of protein supplements amongst all other demographics.
The fitness model is one of the 3 big YouTubers on the topic of nutrition and fitness programs and is known by roughly 33% of all people within that target demographic of teenagers and young adults. He is especially well known for his unbiased supplement reviews and his general honesty and trustworthiness.
4) The chemist has developed new and healthy artificial flavors as well as a new amino acid compound that happens to be 3 times as efficient as the usual amino acids found in protein products of the competition (Let us just assume such a substance could exist). He owns patents on all of these. For more details look at the information available on “Product” below.
5) The client has received an offer from one of the biggest YouTube-specific advertisement agencies. This agency is a specialist when it comes to helping YouTube-personalities start marketing products to their audience.
They suggested that they could help our client gain a 20% market share leveraging the fact that the fitness model is already well known by 33% of the entire customer base. This 20% share will be evenly distributed across all products within the protein supplement industry. You will later see that there are 3 distinct product lines sold within this industry. The advertising campaign will allow the brothers to capture 20% market share for each of the 3 product lines.
For this service, the agency will charge our client 10,000€ a month as a fixed rate. This deal would last for 2 years and there is no way to exit the contract early.
You may assume that without this deal no market share can be gained against the competition and that if our client agrees to the terms of the agency that a 20% market share can be achieved instantaneously to make calculations easier.
You may also assume that the advertising campaign will allow the client to capture 20% of all customers regardless of what distribution channel will be used. So, 20% of all potential customers for a given distribution channel will be captured by the campaign.
6) The client has looked at 2 possible distribution channels:
A) An online shop: The website for this will cost 5,000€ as a one-off fee. 50% of all customers globally prefer to buy their supplements online. The online shop will be accessible globally and we can ignore shipment costs when sending our products abroad (You may assume that the brothers are actually children of Jeff Bezos the CEO of Amazon).
B) A local shop in Germany: The shop could be bought for 500,000€ as a one-off fee or the client could rent and operate a shop for 9,000€ a month. 50% of all customers globally prefer to go to their local shops and buy their supplements in person. Such local shops attract customers within a 10km radius around the shop.
A lot of information has been included in this case to help both the interviewer and the interviewee to get a better conceptual understanding of the industry in case no prior knowledge exists. Not all the information available is necessary to arrive at the solution. The interviewer should read all available information to help guide the interviewee towards the solution.
The goal of this case is to practice handling a large amount of information and not getting overwhelmed by it but proactively identifying which information is necessary to solve the case in a timely manner and which information does not help the interviewee getting closer to the solution.
The interviewee should be able to structure the case into three distinct phases to give very practical advice to the client:
Phase 1 (viability analysis) should be about verifying that the product the client is willing to enter the protein supplement market with is actually a product that customers would be willing to buy. The competition, customers, product and company of the client should all be evaluated to test if entering the market is at all a good idea.
Phase 2 (determination of the product mix) is about coming up with the right product mix to serve the needs of all customers and to prevent overserving or underserving any potential customer segment to maximize efficiency. During the case, the interviewee will learn that there are 4 major products on the protein market with varying demand so a logical way to determine the product mix would be to find the demand for each product individually and supply exactly the market demand.
Phase 3 (determination of the distribution channel) is about determining which of the available distribution channels will give the client access to the largest demand possible.