McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School
Book a coaching

Assessing different options for a growth strategy case

Yibo

Hi guys,

I recently run into a case where an online retailer client wants to grow its revenue and they have a few options in mind. They come to us to weigh different options and help them decide what they should do. They were thinking if they should do a joint venture with a blogger in its field of business or if they should increase their marketing spendings. They are also open to other options.

When I approach this case, should I treat it as a growth strategy case, then come up with a recommendation and cross check with available options or should I start by looking at different options? what is a good way to approach such kind of case?

Thanks in advance for your help!!

Vlad replied on 07/04/2018
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School

Hi,

It's a case where you have to compare the two options. I would start with the clarifying questions:

  1. What is the specific objective in $ that we are trying to achieve - is it Revenues or ROI or something else? What is the time frame?
  2. What is the product / products that we are selling and which products are targeting these options?

Then I would come up with the following structure:

1) Current marketing spend

  • Out product
  • Target audience and our message
  • Current marketing mix and spend per channel
  • Current ROI

2) Benefits of the two options

  • Deal terms
  • Projected number of the new users to be acquired
  • Projected revenue per user
  • Customer lifetime increase (Potential to increase the loyalty of the existing / new users and decrease churn) - ideally you can calculate LTV with these numbers, but they rarely ask to do that in cases
  • Scalability and development potential. How we can increase the total pie of the dial? (very important for the blogger)

3) Costs of the two options

  • Customer Acquisition Costs
  • Upfront Investments
  • Equity split for JV
  • Allocated costs of the team

4) Risks and limitations

  • Reputational and brand risks (mostly in case of blogger)
  • Financial - related to Equity split
  • Operational - in case of blogger you can't change the contractor
  • Contingencies

Best!

(edited)

Related BootCamp article(s)

CAGR - Compounded Annual Growth Rate - CAGR

The Compounded Annual Growth Rate (CAGR) Is a theoretical steady growth rate over a specific amount of time, not the average of the Y-o-Y growth rates. It can mask sub-trends within the period

5 Comment(s)

Growth Strategy

Growth questions are among the most common questions in consulting case interviews: gather the necessary Information about volume and price to find the best growth lever

6 Comment(s)

Related case(s)

Bain case: Asian lubricants producer

Solved 66.3k times
4.7 5 25968
| Rating: (4.7 / 5.0)

LubricantsCo, a very successful Asian premium producer of lubricants in their native region, would like to further increase their revenue and profit. The product range ranges from lubricants in the automotive sector (e.g. motor and gear oil) to industrial applications (e.g. fats, heavy-duty oils). ... Open whole case

Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case

EY-Parthenon Case: Virtual Marketplace

Solved 6.7k times
4.3 5 175
| Rating: (4.3 / 5.0)

A leading online real estate marketplace in Germany – your-new-home.com – is struggling with stagnating sales after many years of high growth rates. In a preliminary project with Parthenon, the market environment has already been examined in detail – competitors, new entrants, customer needs, etc. ... Open whole case

Well Being health care

Solved 23.1k times
4.3 5 1435
| Rating: (4.3 / 5.0) |

Your client is Well Being (WB), a private healthcare company based in Germany. Well Being operates 10 hospitals in Germany (in comparison to 1,000 public hospitals). These hospitals are normally half the size of the public ones and are not providing Accident and Emergency (ER). Revenue comes ... Open whole case

Ocean's Pearl

Solved 14.4k times
4.4 5 277
| Rating: (4.4 / 5.0) |

Your client is the captain of the pirate ship Ocean’s Pearl. He currently discovered declining cash reserves. The recent operations of his ships are not meeting his requirements and he is looking for options to generate additional cash. He wants us to solve two problems: Assessing the re ... Open whole case