I have a perception about the profitability cases are;
1) Not so hard, quite/ok solvable, so they are not eliminative (probably!)
2) However they are still the type of cases with highest probability to be expected
so i'm thinking what part i'm missing about this type of cases? In what aspects they can become inticate? (complex maths or complex business situations or the creativity part like items can be done to overcome the issue etc...?) what's the main point of this type?
Thanks a lot!
1- Sometimes they can be hard and definitely eliminate many people
2- As most of the cases are somehow related to profitability even if they are not profitability case, I would target to be master in those ones. Hard to tell one single main point. Sometimes they can require additional creativity or more complex calculations or charts can be more difficult to get deeper insight etc...
Hi,
I think you have several misconceptions here:
Basic profitability cases have several pitfalls:
While you do your structure and split revenues into price and quantity - add proactively the 3rd box with the "Mix". Thus you show your business sense and demonstrate that you know the most common case traps. While presenting the structure, provide some examples of what can be under the Mix bucket - geography, customer, product, etc.
Split the revenues first by the revenue streams (if you have multiple streams) and then into either:
Good luck!
Increasing profitability is a common outcome most clients are trying to achieve when they hire consultants. Its wrong to assume that a profitability case would be easier to solve than other case type. However, the initial framework i.e. R-C is easier to envisage and most often that it is applicable. Firms are testing you on structure, critical thinking, communication etc. so the case type really does not matter.
Its important to come up with a multiple hypothesis in a profitability case and seek information to prove it and move to other branches of analysis if the data indicates that your original hypothesis was incorrect.
Profitability framework might help you to identify the root cause but while providng insights into how the company can increase profitability you would need employ a different framework , such as delving into customer (new distribution model for reaching consumer , improve customer experience), competition (entry of new competition or alternate product substitutes), cost (reduce raw material cost, reduce cost through economies of scale) etc.
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