Thank you Ian!
Werde aktiv in unserer Community aus über 451.000 Gleichgesinnten!
Verabrede dich zum Casen über das Meeting-Board, nimm an Diskussionen in unserem Consulting Q&A teil und finde gleichgesinnte Case-Partner, um dich auszutauschen und gemeinsam zu üben!
How did you caluculate the % of clients that must buy the warranty with the new price to maintain profits constant? Thx
Übersicht der Antworten
Upvotes
Beste Antwort
Ciao Chiara,
I'll try to make this point of the business case clear for you. Let's consider the following data for Model 300:
- Original price: 51,000€
- New price: 50,000€
- Price decline: 50,000€-51,000€ = 1,000€
This means that, in order to keep the same profits, the additional warranty service has to generate 1,000€ per client (on average).
Let's consider the economic KPI of the warranty service:
- Price: 2,350€
- Cost of the service: 1,100€ (Expected value of the replacement costs, 5,500€ for 22% of the customers)
- Profits= Price - cost = 1,250€
Now, you have to calculate what is the percentage of your clients that has to buy something that generates profits 1,250€ to cover for the 1,000€ decline for each client (calculated before). You can set up the following equation:
1,250€ x Y = 1,000€ --> Y=80%
I hope that now everything is clear, otherwise do not hesitate to contact me to discuss this further.
Best,
Luca
War diese Antwort hilfreich?
Hi Chiara,
Luca has done a great job answering specifically for this case.
Remember, this is a breakeven....something which you need to be really familiar with in a range of scenarios! (i.e. solve for price, quantity, cost, investment amount, # of years, etc.)
War diese Antwort hilfreich?
My pleasure :)
+1 Luca, kudos, so pedagogical
War diese Antwort hilfreich?
Verwandte Cases
Expertencase von Francesco
Our client is an Indian sugar producer exporting solely to Indonesia. Indonesia imports 5m tons of raw sugar per year.To make raw sugar, our client processes sugarcane at a cost of $25 per ton and they have a capacity of 1.5m tons per year. The only competitor that has lower production costs is from
...
Our client is an Indian sugar producer exporting solely to Indonesia. Indonesia imports 5m tons of raw sugar per year.To make raw sugar, our client processes sugarcane at a cost of $25 per t
...
(Ganzen Case öffnen)
2,8 T.
mal gelöst
Schwierig
Schwierigkeitsgrad
Thank you Luca for your kind and clear answer!