Solution of this case says to reduce the pricing and then admits that this will lower the margin but gain the market share. however, one of the goals of this gase is to increase margin and the share not one or the other I believe.
(edited)
Case solution does not solve the objective of the case
Overview of answers
Upvotes
Best answer
Hi,
You are right, but it's not always possible to find a solution that satisfies every client's request.
In this case, after your analyses, the interviewer can ask you to present your findings: that lowering price will make our client to gain market share.
Usually the interviewer will then ask you to quickly brainstorm possible alternatives/solution to also increase the margins.
Hope it helps,
Luca
Was this answer helpful?
Related Cases
Company case by Simon-Kucher & Partners
Style:
Topics:
Cruise company German Sea Tours (GST) is a successful operator of international cruises. GST currently offers several cruise trips, lasting between 5 and 24 days. Additional services can be booked on board (e.g. excursions at each destination, onboard leisure activities). Customers tend to book thei
... (Open whole case)
33.7k
Times solved
Intermediate
Difficulty
Company case by Volkswagen Consulting
Topics:
Ihr Kunde ist in einem globalen Automobilkonzern dafür verantwortlich ein neues Produkt mit einem Volumen von 140.000 Fahrzeugen über den gesamten Produktionszeitraum auf den Markt zu bringen. Bedingt durch finanzielle Anspannung liegt ein besonderer Fokus auf den Kosten.
... (Open whole case)
9.4k
Times solved
Intermediate
Difficulty
Style:
Topics:
Your client, Customlope, is the leader in the US secure envelope manufacturing industry. Banks buy these envelopes for operations such as money deposits and high value transactions.Next year, a new digital technology will reduce the overall number of units sold in the industry by 25%.In the short te
... (Open whole case)
56.0k
Times solved
Beginner
Difficulty
Style:
Topics:
Our client is an international CPG (consumer packaged goods) firm called Bryan, with multiple business units (toothpaste, batteries, skin & body care, among others).They are the global market leader i
... (Open whole case)
39.1k
Times solved
Intermediate
Difficulty
Topics:
Your client, Fysikum, is an operator of squash centres in Sweden. The squash centres include sauna, spa, pool, gym and of course the squash courts. Due to the extreme success in Sweden the company is considering expanding to other countries of Europe, in particular Germany.Therefore they a
... (Open whole case)
32.1k
Times solved
Intermediate
Difficulty
Content Creator
BCG |NASA | SDA Bocconi & Cattolica partner | GMAT expert 780/800 score | 200+ students coached
61
Meetings
2,948
Q&A Upvotes
32
Awards
19 Reviews
If factories are operating at full capacity (quantity produced can't be increased without significant investments), shouldn't price reductions lead to both decreasing revenues (same quantity x lower prices) and lower profit margins? In that case, the proposed solution doesn't solve any of the objectives of the case, since we know that the Argentinian market is growing by 10%, right?
I think the argument makes sense as the maximum capacity has been reached. Reducing price will not cause increasing units sold due to the shortage of supply unless we open new manufacturing plants, which requires another amount of up-front cost.