Case/Framework Feedback

case question Feedback
Bearbeitet am 28. Okt. 2022
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Anonym A fragte am 27. Okt. 2022

Could anyone please provide some general feedback on my framework/answer for a practice case I did? (this was a self case with no partner or interviewer)

Case prompt: Client is a sports apparel retailer in Europe with around £120m in revenues. They have satisfactory profitability and have hired you to help them develop a growth strategy over the next 4 years to increase revenue by 40%. How would you help them create this plan?

Clarifying Qs asked:

  • Are the clients stores located in one country in the EU e.g. England or across several?
  • Is the client open to expanding beyond Europe?

Framework:

Drivers & Sub-drivers: 

New geographies

  • Large growing markets
  • markets similar to us
  • markets with weak existing competition

Customers

  • Marketing to bring in new customers
  • Incentives for next purchases/customer loyalty programmes - repeat buyers
  • Improve customer service

Products

  • Current products (right price, right product, quality etc)?
  • New products (are we selling the right apparel)/whats our comp selling)?
  • Review placement of products in store

Competition

  • Acquisitions of smaller competitors
  • Price matching competitors

Hypotheses:

  1. we are currently in markets with high competition and will need to explore new markets to increase revenue significantly
  2.  having incentives such as next buy offers or customer loyalty programmes with help with repeat buyers and will result in losing less customers to competition
  3. new products will be needed to keep up with the latest market trends which may trigger a customers initial consideration for buying something. 
  4. our competitors are selling similar products to us. With being more in a commodities market we may have to price match competitors to sustain sales volume. 

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Pedro
Experte
antwortete am 28. Okt. 2022
Bain | EY-Parthenon | Roland Berger | FIT | Market Sizing | Former Head Recruiter

I want to highlight something to Maikol's answer (and I agree… that sounds too much like case in point).

If you notice carefully, you will see that you could state it as (I'm adjusting a bit for my personal taste):

  • a% coming from existing stores with current portoflio (you need to know how much you expect the market to grow to know this)
  • b% coming from market share gains (new products, advertising, x-selling, up-selling …) within current stores
  • c% coming from new stores in the same market
  • d% new product categories
  • e% coming from new markets/geographies
  • f% inorganic (store/competitor acquisition)

If you think about it… it is so much simpler than the “boil-the-ocean” type of structures that basically are “information collection” lists, but provide no insight on how one is actually going to solve the proble,

Why is this simple? Because you are actually approaching this in a quantitative way. 40% will come from multiple factors. One is market growth. The remainder is market share gain. Then divide market share gain. It can come from current stores or new stores. New stores can be in current markets or new markets. And so on…

Then, to evaluate all of this, you will need to look at it qualitatively. You need to know your current market share and competitors. You need to know how your price compares to know if lowering your price is an option for current store growth. You'll need to know if there are underserved segments to check if you can introduce new products. But when you list this, you need to know what is the specific question you are trying to answer or tool you are trying to pull, and that needs to be clear to the interviewer.

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Maikol
Experte
Content Creator
antwortete am 28. Okt. 2022
BCG Project Leader | Former Bain, AlixPartner, and PE | INSEAD MBA | GMAT 780

My feedback:

Clarification questions. You forgot to ask about the business model. Do they have stores? How many? Which type? Do they sell to distributors? What type of products do they have (premium, sport comfort, etc).

Structure. This buy-the-book structure can be good only for people who didn't spend a single day in consulting like Cosentino or that have been analysts like Cheng. 
I've never seen a consultant talking about 3Cs. You should segment revenues (existing and possible ones): on 

  • existing stores (how do we operate them?)
  • new stores in existing markets (how do we operate them?)
  • third-party stores in existing markets
  • new markets (though stores and/or distributors)
  • new revenue streams (e.g., licensing, sport consulting, apps, etc)

For existing stores you can talk about volumes of customers, increase of spending on each receipt through price increase, new products, etc.

In discussing prices and how to increase volumes you can cover competition, competitive advantages, store location, product type, etc. 

The issues with these structures built on buckets instead than on business cases/business plan structure are that they are disconnected from consulting reality, unspecific, and you collect pieces of info that you then lose or you cannot attach to drivers connected to the end goal.

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Anonym B bearbeitete die Antwort am 28. Okt. 2022

To be blunt, this is NOT a good structure:

- It seems like a list of random things you collected and tried to somehow categorize them meaningfully. This has nothing to do with rigorous top-down thinking.

- Even now looking at it, it is still not MECE (e.g. current products - placement of products in the store).

- No need to ask these clarifying questions. For example, if the interviewer says „No, we wanna stay in country X“, then you cannot bring the point „geographical expansion„ in your structure anymore, whereas if you do bring the idea, you already got a cookie point for being creative (the interviewer might very well comment that it is out of scope, but you couldn‘t have known that).

It is pretty clear that they want to grow and by how much, so your first task is to lay down ways how to grow, and then discuss with the client which ways to prioritize based on impact, feasibility and risks. You should lay them down in a structured manner, but tailored to the case (so that the interviewer does not think that you are simply jotting down theoretical frameworks your learned by heart).
 

I would structure it for example this way:

We can grow either

A) Organically

B) Anorganically (e.g. acquire smaller sportswear firms)

A) Organic growth can be achieved by:

1) Strengthening the existing business

2) Exploring new business opportunities

Ideas for 1)

a) Improve existing sportswear products (design, durability, function etc.) and/or optimize product mix; we can determine relevant KPC and NPS by in-store or digital customer surveys (e.g. by providing a lottery as an incentive)

b) Improve prices; we can determine optimal price point by competitor benchmarks, customer surveys, market reports etc.

c) Marketing optimization (e.g. leveraging customer data for SEO or targeted mail/email advertising, sponsoring through sports events, campaign through Instagram influencers, TikTok brand videos etc.)

Ideas for 2)

a) Geographical expansion (e.g. USA, maybe under a new brand)

b) Expansion into adjacent clothing markets (e.g. uniforms)

c) Additional revenue streams (e.g. in-store print service to have the name of your favorite player on your football jersey, shoe repair service, sports snacks and beverages, in-store cafe, white label service)

d) Additional distribution channels (e.g. online-channel, second-hand shops)

e) Additional product categories (e.g. childrenswear, accessories)

(editiert)

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Pedro

Bain | EY-Parthenon | Roland Berger | FIT | Market Sizing | Former Head Recruiter
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