Prioritize between solving a case linearly and time

Question

Dear all,

I have a question regarding the importance of solving a case linearly. Assume that the case purpose is to help turn around declining profits. You start by laying out your issue tree:

Company (product mix, revenue and cost, capabilities, distribution channels)
Customer (segments, segment size, segment growth rate, price willingness, preferred distribution channels)
Competition (size, growth rate, best practices)

Assume you notice that there exists a mismatch between the company’s distribution channels and those preferred by the customers. Should you immediately shift your focus on this problem or is it better to continue going through your issue tree and postponing the analysis of the distribution problem.

Thanks, Frank

Answer 1

In general, my advice would be to be focused on the exact question asked. Typical cases will have 3-4 questions and whilst it's nice to draw links back to the original question (e.g. declining profitability), remember that you're being marked on being able to answer exactly what you've been asked.

On a question of declining profitability, I would keep it much simpler than going through "the 3 Cs". Declining profitability is an issue with revenue (price, volume, mix) and/ or cost (typically fixed/ variable) and I'd go from there. You've covered by definition everything to do with profitability when you've looked at revenue and cost, so once you know where the issue lies you can "peel the onion" and get closer to the real issue.