Hello!

1st of all, have a look at this post from some days ago, it´ll help you with the distinction vs. FC & VC frameworks > https://www.preplounge.com/en/consulting-forum/when-should-i-break-down-costs-as-fixed-and-variable-as-opposed-to-over-the-value-chain-5990#first-answer.

This said, both breakdowns (FC & VC vs. Value Chain) can be perfectly fine if they are well argumented.

I would say that in most cases, Fixed vs. Variable is an easier way to tackle down these kind of problems. However, keep your eyes open for hints that point you towards a value-chain approach (e.g., issues in the process, total costs of revenues going down in time, etc.)

Hope it helps.

Cheers,

Clara

Hi,

3 types of cases:

• Cases in supply chain and logistics
• Cases on synergies (You have synergies in revenues and costs. You investigate cost synergies with the value chain)
• Cases with operational bottlenecks (e.g. Reduce the queue at the ski resort. Reduce the write-offs in retail)

Best

Hi Alex,

you normally use a value chain analysis in the following situations:

• Any case related to costs – as a way to brainstorm cost types
• Operations cases – as a way to understand where the problem is in the value chain

Best,
Francesco