The interviewee should sum up his/her findings.
The client should NOT reduce the price because it will lead to a loss in profit that is equivalent to losing 33% of market share.
So far, it seems that the new competitor will take a maximum of 3% of the client’s market share.
There are two possible risks though:
- We could have underestimated the size of the new competitor.
- One of our bigger competitors could reduce their price in response to the new competitor’s low prices.
Since this is an interviewer-led case, the interviewer should guide the interviewee through the interview. The questions in the big boxes should be read out to the interviewee.