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8

Bain Online Test - Packaging Co. (Guidance on Questions)

CASE CONTEXT

Packaging Co. is a private equity owned global packaging company looking to maximize revenue and earnings growth before an exit from the business in the next 5 years. Packaging Co. has 5 business units out of which, its 2 North American business units (Plastic packaging and Paper packaging) were recently consolidated under a new leadership.

​Sales in the Paper packaging business unit have declined over the last few years as several key customers have transitioned their packaging to plastic. Last year, paper profit margins decreased sharply, despite the introduction of several new production asset. The paper market is consolidating, creating larger competitors (several of which are vertically integrated with paper mills giving them a theoretical cost advantage)

The company was facing the following challenges:

  • External market pressures:
    • Pricing pressure causing margin erosion and the loss of several major customers
    • Rising raw material costs compressing margins
    • Industry consolidation resulting in strong competitors
    • Rapidly changing customer preferences
  • Internal growth challenges:
    • Inconsistent pricing process & system
    • Aged assets creating high manufacturing cost
    • Customer targeting and prioritization process in early stages of development

The CEO of Packaging Co. engaged Bain to help the Plastic and Paper business units prepare for a sales growth.

QUESTION 1
You have been given the responsibility of undertaking an evaluation of the Packaging Co. plant's commercial and operational performance. For this, there was a requirement of some reports. As an Associate Consultant, which reports would you be requiring?
1. Financial reports
2. Production report
3. Inventory report
4. Sales pipeline report
5. Staffing report

Choose One
A. 1,2,3,4
B. 1,3,4,5
C. 1,2,3,5
D. All of the above

QUESTION 2
Bain undertook the following steps as a part of the growth strategy for Packaging Co. You are required to identify the most appropriate sequence of the steps taken-
1. Ensure attractive markets align with Packaging Co's differentiated capability
2. Forecast growth by market segment using underlying economic drivers and expert interviews
3. Identify attributes of the most profitable products within those capabilities to focus sales team
4. Review historic trends and estimate Packaging Co share gain/loss by sub-markets
5. Identify most attractive markets based on growth and expected margins

Choose One
A. 1,3,2,4,5
B. 5,1,2,4,3
C. 4,2,5,1,3
D. 5,4,2,3,1

CASE CONTEXT

Packaging Co. is a private equity owned global packaging company looking to maximize revenue and earnings growth before an exit from the business in the next 5 years. Packaging Co. has 5 business units out of which, its 2 North American business units (Plastic packaging and Paper packaging) were recently consolidated under a new leadership.

​Sales in the Paper packaging business unit have declined over the last few years as several key customers have transitioned their packaging to plastic. Last year, paper profit margins decreased sharply, despite the introduction of several new production asset. The paper market is consolidating, creating larger competitors (several of which are vertically integrated with paper mills giving them a theoretical cost advantage)

The company was facing the following challenges:

  • External market pressures:
    • Pricing pressure causing margin erosion and the loss of several major customers
    • Rising raw material costs compressing margins
    • Industry consolidation resulting in strong competitors
    • Rapidly changing customer preferences
  • Internal growth challenges:
    • Inconsistent pricing process & system
    • Aged assets creating high manufacturing cost
    • Customer targeting and prioritization process in early stages of development

The CEO of Packaging Co. engaged Bain to help the Plastic and Paper business units prepare for a sales growth.

QUESTION 1
You have been given the responsibility of undertaking an evaluation of the Packaging Co. plant's commercial and operational performance. For this, there was a requirement of some reports. As an Associate Consultant, which reports would you be requiring?
1. Financial reports
2. Production report
3. Inventory report
4. Sales pipeline report
5. Staffing report

Choose One
A. 1,2,3,4
B. 1,3,4,5
C. 1,2,3,5
D. All of the above

QUESTION 2
Bain undertook the following steps as a part of the growth strategy for Packaging Co. You are required to identify the most appropriate sequence of the steps taken-
1. Ensure attractive markets align with Packaging Co's differentiated capability
2. Forecast growth by market segment using underlying economic drivers and expert interviews
3. Identify attributes of the most profitable products within those capabilities to focus sales team
4. Review historic trends and estimate Packaging Co share gain/loss by sub-markets
5. Identify most attractive markets based on growth and expected margins

Choose One
A. 1,3,2,4,5
B. 5,1,2,4,3
C. 4,2,5,1,3
D. 5,4,2,3,1

8 answers

  • Upvotes
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  • Date descending
Best Answer

Hi!

this is impossible to comprehensively discuss without the corresponding contextual information, data, etc.

However, what you can tell for sure is that 4) and 6) do not make any sense, given the objective of boosting sales.

Cheers,

Sidi

Hi!

this is impossible to comprehensively discuss without the corresponding contextual information, data, etc.

However, what you can tell for sure is that 4) and 6) do not make any sense, given the objective of boosting sales.

Cheers,

Sidi

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Hi Sarviin,

The answer is B.

This is a very challenging question - I spent quite a while figuring this one out!

In the end, you need to remember :

1) The objective (maximize revenue AND earnings...so topline and bottom line)

2) What is omitted (we can't make assumptions, such as with distribution)

3) What is explicit (i.e. where are we given clear hints)

Click here for a full explanation:

Bain Online Test Answer

Hi Sarviin,

The answer is B.

This is a very challenging question - I spent quite a while figuring this one out!

In the end, you need to remember :

1) The objective (maximize revenue AND earnings...so topline and bottom line)

2) What is omitted (we can't make assumptions, such as with distribution)

3) What is explicit (i.e. where are we given clear hints)

Click here for a full explanation:

Bain Online Test Answer

1. Nowhere in the case, it is mentioned that client has staffing challenges. Hence, we needn't look into the staffing report. Answer would be A

2. Considering the top down appraoch, in the profitability analysis, firstly, we would analyse the profitablity among various markets/product segments/geographies/manufacturing plants etc. applicable for the client/case. As a next steps, we would shortlist the market based on the attractiveness and economic growth. With this slogic 2-5-1 should follow 4. Answer would be C

1. Nowhere in the case, it is mentioned that client has staffing challenges. Hence, we needn't look into the staffing report. Answer would be A

2. Considering the top down appraoch, in the profitability analysis, firstly, we would analyse the profitablity among various markets/product segments/geographies/manufacturing plants etc. applicable for the client/case. As a next steps, we would shortlist the market based on the attractiveness and economic growth. With this slogic 2-5-1 should follow 4. Answer would be C

1. A since staffing is not mentioned. — Anonymous on Jun 07, 2020

2. C since we need to look at historical years to review the company gain loss of market share before taking the next action items. — Anonymous on Jun 07, 2020

Agree with Sidi

Best,

André

Agree with Sidi

Best,

André

Happy to see the source as well.

Will go for answers A & C as Clara.

Happy to see the source as well.

Will go for answers A & C as Clara.

(edited)

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Hello!

Interesting, can you share source?

Answers:

  1. A
  2. C

Hope it helps!

Cheers,

Clara

Hello!

Interesting, can you share source?

Answers:

  1. A
  2. C

Hope it helps!

Cheers,

Clara

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