Cookie- und Privatsphäre-Einstellungen

Diese Webseite nutzt Cookies, um essenzielle Funktionen wie den User-Login und Sessions zur Verfügung zu stellen. Wir nutzen zudem Cookies und Software von Dritten, um Dein Surf-Erlebnis auf preplounge.com zu verbessern. Du kannst entweder nur essenzielle Cookies oder alle Cookies akzeptieren. Du kannst Deine Einstellungen jederzeit in unseren Cookie- und Privatsphäre-Einstellungen ändern. Dieser Link ist im Footer unserer Seit zu finden. Wenn Du mehr Informationen benötigst, besuche bitte unsere Datenschutz-Erklärung.

Datenverarbeitung in den USA: Indem Du auf "Ich akzeptiere" klickst, willigst Du zugleich gem. Art. 49 Abs. 1 S. 1 lit. a DSGVO ein, dass Deine Daten in den USA verarbeitet werden (von Google LLC, Facebook Inc., LinkedIn Inc., Stripe, Paypal).

Einstellungen individuell vornehmen Ich akzeptiere
expert
Experte mit der besten Antwort

Sara

100% Empfehlungsrate

5 Meetings

55 Q&A Upvotes

159 USD / Coaching

7

profitability case structure product /customer /distribution channel mix

Hi everyone,

I've practiced a few profitability cases recently and I've noticed that how they all end up with different product mix/customer mix/distribution channel mix etc. As a result, I was wondering whether I should incorporate the mix into the framework. The standard profitability framework seems too simple and I would want to break down the cost further by customer/product/channel etc. Any advice & thoughts are appreciated!

Hi everyone,

I've practiced a few profitability cases recently and I've noticed that how they all end up with different product mix/customer mix/distribution channel mix etc. As a result, I was wondering whether I should incorporate the mix into the framework. The standard profitability framework seems too simple and I would want to break down the cost further by customer/product/channel etc. Any advice & thoughts are appreciated!

7 Antworten

  • Upvotes
  • Datum aufsteigend
  • Datum absteigend
Beste Antwort
Coaching mit Sara vereinbaren

100% Empfehlungsrate

5 Meetings

55 Q&A Upvotes

159 USD / Coaching

Dear Alice,

the most important points in laying out your structure are: be MECE, be quick, be sensible. The breakdown that you are suggesting is a deeper layer that might not even be evident at the beginning of the case. Therefore I would suggest, as a rule valid on average, to bring it up only ahead in the case.

When the time to dig more into each element of your profitability tree comes, it is then a good idea to suggest that there are a number of dimensions you might use and then to pic the one that makes more sense in the specific situation.

However, each rule as exceptions and it might happen that the segmentation is easily understandable from the beginning. In this case, you can mention it with no disruption in the MECEness or speed of your structure. For example, if the case states from the beginning that there are two products originating income, you can already segment the revenues in 2 sub-branches correspondent to the products. Later on in the case, it might be necessary to create sub-brunches, splitting for example each product into different customer-categories. In this case, drawing a matrix might be a good idea to impress your interviewer.

Dear Alice,

the most important points in laying out your structure are: be MECE, be quick, be sensible. The breakdown that you are suggesting is a deeper layer that might not even be evident at the beginning of the case. Therefore I would suggest, as a rule valid on average, to bring it up only ahead in the case.

When the time to dig more into each element of your profitability tree comes, it is then a good idea to suggest that there are a number of dimensions you might use and then to pic the one that makes more sense in the specific situation.

However, each rule as exceptions and it might happen that the segmentation is easily understandable from the beginning. In this case, you can mention it with no disruption in the MECEness or speed of your structure. For example, if the case states from the beginning that there are two products originating income, you can already segment the revenues in 2 sub-branches correspondent to the products. Later on in the case, it might be necessary to create sub-brunches, splitting for example each product into different customer-categories. In this case, drawing a matrix might be a good idea to impress your interviewer.

Dear Alice,

There are different ways to structure the profitability case. As you already know, profitability is equal to revenues - costs.

There are 3 typical ways on how you can structure the revenues and segment them:

1. by customers,

2. by products

3. by geographical markets

Regarding the costs you may structure them either in the fixed and variable cost, or may also structure them by different kinds of cost - like personell cost, material cost, etc. The other way to look about it is to structure the cost along value chain.

So, depending on the case you might use different approaches and segment your revenues and cost side.

Recently I've uploaded a profitability case “Deep Water rescue” (available in English & German) here on Preplounge:
https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/advanced/deep-water-rescue-206

I used similar cases when I was interviewing candidates on my own in Central Europe (Germany & DACH Region), Eastern Europe (Ukraine & Russia) as well as Middle East (Dubai, KSA, Lebanon, and Qatar). So, this case is very advanced and could be typically used in the 2nd or 3rd interview rounds by the leading consulting firms.

Try, whether you can crack it.

Best,
André

Dear Alice,

There are different ways to structure the profitability case. As you already know, profitability is equal to revenues - costs.

There are 3 typical ways on how you can structure the revenues and segment them:

1. by customers,

2. by products

3. by geographical markets

Regarding the costs you may structure them either in the fixed and variable cost, or may also structure them by different kinds of cost - like personell cost, material cost, etc. The other way to look about it is to structure the cost along value chain.

So, depending on the case you might use different approaches and segment your revenues and cost side.

Recently I've uploaded a profitability case “Deep Water rescue” (available in English & German) here on Preplounge:
https://www.preplounge.com/en/management-consulting-cases/candidate-led-usual-style/advanced/deep-water-rescue-206

I used similar cases when I was interviewing candidates on my own in Central Europe (Germany & DACH Region), Eastern Europe (Ukraine & Russia) as well as Middle East (Dubai, KSA, Lebanon, and Qatar). So, this case is very advanced and could be typically used in the 2nd or 3rd interview rounds by the leading consulting firms.

Try, whether you can crack it.

Best,
André

if it is a interviewee-led case, it may better not be incorporated. if it is interviewer-led, multi-layer framwork may show your deep thinking of the problem. And be cautious, profitability may not always end in that way. Best!

if it is a interviewee-led case, it may better not be incorporated. if it is interviewer-led, multi-layer framwork may show your deep thinking of the problem. And be cautious, profitability may not always end in that way. Best!

Hi Danny. It's a myth - it doesn't really matter who leads a case — Vlad am 5. Jul 2017

A profitability case is, in the end, an operations case. If you are too quick to jump to the R=P*V equation, you show signs of a data junky who doesn't try to get a better feel of the "environment" this case lives in.

I STRONGLY prefer that candidates do NOT jump into the R=P*V game too quick. Ask a few overarching questions, find out who you are selling to and how that's changed, find out who you are competing against and are they fragmented/big, find out if your industry has seen a regulatory shift if relevant (e.g. shipping), find out more about HOW you sell (online, retail, reseller, etc), etc.

Hemant

A profitability case is, in the end, an operations case. If you are too quick to jump to the R=P*V equation, you show signs of a data junky who doesn't try to get a better feel of the "environment" this case lives in.

I STRONGLY prefer that candidates do NOT jump into the R=P*V game too quick. Ask a few overarching questions, find out who you are selling to and how that's changed, find out who you are competing against and are they fragmented/big, find out if your industry has seen a regulatory shift if relevant (e.g. shipping), find out more about HOW you sell (online, retail, reseller, etc), etc.

Hemant

Hemant, thanks a lot for your answer. It is definitely answering my question very well — Stephane am 5. Mär 2018

Coaching mit Vlad vereinbaren

98% Empfehlungsrate

405 Meetings

11.353 Q&A Upvotes

239 USD / Coaching

Hi,

I recommend using two tools here:

  1. I recommend asking the clarifying question at the beginning of the case: How does the business work and what are the revenue streams? Why do you need to know the revenue streams? Because it's one of the most critical pieces in understanding the business model. An example is Oil&Gas with up-, mid- and down- streams that are completely different businesses. And downstream basically generates 50% of revenues selling snacks on the gas stations. This is the most common pitfall in profitability cases (the 2nd pitfall is the Mix)
  2. 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.

    Good luck!

Hi,

I recommend using two tools here:

  1. I recommend asking the clarifying question at the beginning of the case: How does the business work and what are the revenue streams? Why do you need to know the revenue streams? Because it's one of the most critical pieces in understanding the business model. An example is Oil&Gas with up-, mid- and down- streams that are completely different businesses. And downstream basically generates 50% of revenues selling snacks on the gas stations. This is the most common pitfall in profitability cases (the 2nd pitfall is the Mix)
  2. 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.

    Good luck!

Vlad, thanks a lot for your hint. It is definitely answering my question very well. — Stephane am 5. Mär 2018

Coaching mit Francesco vereinbaren

100% Empfehlungsrate

3.283 Meetings

12.064 Q&A Upvotes

449 USD / Coaching

Hi Stephane,

I would personally go for neither the volume or the price classification. The ideal thing would be to first ask for the mix, then perform an analysis of the problematic segment only. The steps to follow thus would be the following:

  1. Segment by profitability/revenue channels. Ask the interviewer how the client segments its profitability channels (products, customers, distribution channels, etc.).
  2. Identify which channel is the priority. Ask for the change in profitability for each channel. Then start from the one that had the biggest decline in profits.
  3. Identify whether it is a revenue or cost issue. Ask how revenues and costs changed for the channel that you have identified. Start from the area which has the major negative change in absolute amount
  4. Analyse the components of revenues and/or costs. According to what you found in step 3, you should further segment revenues in price and volume or costs using fix or variable costs

Best,

Francesco

Hi Stephane,

I would personally go for neither the volume or the price classification. The ideal thing would be to first ask for the mix, then perform an analysis of the problematic segment only. The steps to follow thus would be the following:

  1. Segment by profitability/revenue channels. Ask the interviewer how the client segments its profitability channels (products, customers, distribution channels, etc.).
  2. Identify which channel is the priority. Ask for the change in profitability for each channel. Then start from the one that had the biggest decline in profits.
  3. Identify whether it is a revenue or cost issue. Ask how revenues and costs changed for the channel that you have identified. Start from the area which has the major negative change in absolute amount
  4. Analyse the components of revenues and/or costs. According to what you found in step 3, you should further segment revenues in price and volume or costs using fix or variable costs

Best,

Francesco

Verwandte BootCamp-Artikel

Case Studies

The case study is the most important element of the case interview, which you'll have to nail in order to get into strategic consulting. Here you can learn the specific skills and concepts necessary to solve them.

1 Q&A

Focusing on The Core: Mock Interviews

It is to practice as many cases as possible - both as interviewee and as interviewee. Here are a couple of guidelines to help you get started

1 Q&A

Profitability Case

Learn to crack Profitability Framework Consulting Cases, which are the number 1 reason for real consulting projects and hence are an important case type.

1 Q&A Quiz

Verwandte Cases

Bankumschläge

58,4 Tsd. mal gelöst
Bankumschläge Der Klient ist Customlope, Marktführer bei der Produktion sicherer Briefumschläge in den USA. Diese Umschläge werden von Banken für spezifische Transaktionen wie Einzahlungen von Geld, hohe Transaktionswerte etc. genutzt. Eine neue digitale Technologie, welche eine Abnahme der verkauften Einheiten im Markt um 25% verursachen wird, soll nächstes Jahr an den Markt gebracht werden. Unser Klient möchte seinen aktuellen Gewinn mit dem derzeitigen Equipment halten (ohne in die neue Technologie zu investieren). Wie kannst du ihm helfen?
4.5 5 2412
| Bewertung: (4.5 / 5.0) |

Der Klient ist Customlope, Marktführer bei der Produktion sicherer Briefumschläge in den USA. Diese Umschläge werden von Banken für spezifische Transaktionen wie Einzahlungen von Geld, hohe Transaktionswerte etc. genutzt. Eine neue digitale Technologie, welche eine Abnahme der verkauften Einheiten ... Ganzen Case öffnen

Oliver Wyman Case: Setting up a Wine Cellar

57,7 Tsd. mal gelöst
Oliver Wyman Case: Setting up a Wine Cellar I’m thinking about setting up a wine cellar in my basement. The way I see it, shelf space would be divided into two sections: (1) a “drinking” section where I store bottles for my own consumption and (2) an “investment” section where I store bottles that I intend to sell at a profit after they appreciate in value several years down the line. The idea is to earn enough money with the “investment” section of the cellar in order to subsidize whatever I consume in the “drinking” section over time.   I'm obviously constrained by several things: the amount of money I am able to spend, the amount of wine I can (or want to) drink, the space available for the cellar, and so on.
4.3 5 3587
| Bewertung: (4.3 / 5.0)

I’m thinking about setting up a wine cellar in my basement. The way I see it, shelf space would be divided into two sections: (1) a “drinking” section where I store bottles for my own consumption and (2) an “investment” section where I store bottles that I intend to sell at a profit after they appre ... Ganzen Case öffnen

Kaugummi

55,9 Tsd. mal gelöst
Kaugummi Der Kunde ist ein Kaugummi-Hersteller. Der Geschäftsführer ist in Sorgen, da sein Unternehmen mit einer schrumpfenden Gewinnmarge konfrontiert ist. Bitte finde die Gründe dafür heraus und mache Vorschläge zu Verbesserung.
4.4 5 2102
| Bewertung: (4.4 / 5.0) |

Der Kunde ist ein Kaugummi-Hersteller. Der Geschäftsführer ist in Sorgen, da sein Unternehmen mit einer schrumpfenden Gewinnmarge konfrontiert ist. Bitte finde die Gründe dafür heraus und mache Vorschläge zu Verbesserung. Ganzen Case öffnen

Madflix.com

55,5 Tsd. mal gelöst
Madflix.com Our client is madflix.com, a website similar to Netflix. The biggest difference is however that Madflix targets mainly men and provides a majority of “mad movies”, such as action, horror or science-fiction movies. Clients sign up online, order online, receive the movie and mail it back. Madflix is not satisfied with the profit margin, as it has declined over the last two years. The CEO has hired us to recommend a solution.
4.4 5 2611
| Bewertung: (4.4 / 5.0)

Our client is madflix.com, a website similar to Netflix. The biggest difference is however that Madflix targets mainly men and provides a majority of “mad movies”, such as action, horror or science-fiction movies. Clients sign up online, order online, receive the movie and mail it back. Madflix is ... Ganzen Case öffnen

DHL Consulting Case: Bike Shop

53,8 Tsd. mal gelöst
DHL Consulting Case: Bike Shop Sie wurden angestellt, um den Besitzer eines Bike-Shops als Unternehmensberater zu unterstützen. Der Bike-Shop hat einen deutlichen Umsatzrückgang im letzten Jahr erlitten. Nun bittet Sie der Besitzer, die Situation und die Optionen für das weitere Vorgehen zu beurteilen. Er will den Gewinn des vergangenen Jahres erfahren, d.h. wie er von dem Umsatzrückgang betroffen wurde, und möchte wissen, was die vorrangigen Maßnahmen sein könnten, um die nächsten Jahre (kurzfristig) zu überstehen. Außerdem möchte er die strategische Wettbewerbsposition des Shops besser verstehen und sucht nach möglichen Wegen, die Umsätze mittel- bis langfristig wieder zu erhöhen.
4.3 5 11443
| Bewertung: (4.3 / 5.0)

Sie wurden angestellt, um den Besitzer eines Bike-Shops als Unternehmensberater zu unterstützen. Der Bike-Shop hat einen deutlichen Umsatzrückgang im letzten Jahr erlitten. Nun bittet Sie der Besitzer, die Situation und die Optionen für das weitere Vorgehen zu beurteilen. Er will den Gewinn des ver ... Ganzen Case öffnen