Hey, I need your thoughts on this!
Company A's large commercial footprint results in high costs and complexity. Company A has 29 affiliates, 33 partner markets, 80 total markets and a customer facing ratio on 40-80%.
The overall purpose is cost reduction and increased simplicity.
How would you approach this?
What analyses would you conduct?
I would do a profitability analysis of each region and compare, but what else?
Kind regards,
Rikke
(edited)
Hello!
We are missing the most important question here. What is our target? What does the client want to achieve with our help? Cost reduction, complexity reduction… or many other things!
Once we clarify that, we would be good to start brainstorming, but not before, since we can run the marathon in the other direction!
Hope it helps!
Cheers,
Clara
Hi Rikke,
I'm going to take a step back and answer the question you're really asking: How do I use frameworks in a case?
If there's anything to remember in this process, is that cases don't exist just because. They have come about because of a real need to simulate the world you will be in when you are hopefully hired. As such, remember that they are a simplified version of what we do, and they test you in those areas.
As such, remember that a framework is a guide, not a mandate. In the real-world, we do not go into a client and say "right, we have a framework that says we need to look at x, y, and z and that's exactly what we're going to do". Rather, we come in with a view, a hypothesis, a plan of attack. The moment this view is created, it's wrong! Same with your framework. The point is that it gives us and you a starting point. We can say "right, part 1 of framework is around this. Let's dig around and see if it helps us get to the answer". If it does, great, we go further (but specific elements of it will certainly be wrong). If it doesn't, we move on.
So, in summary, learn your frameworks, use the ones you like, add/remove to them if the specific case calls for it, and always be prepared to be wrong. Focus rather on having a view, refering back to the initial view to see what is still there and where you need to dive into next to solve the problem.
Some very good responses here already. I will just add by asking a simple question to test your suggestion for a framework (which isn’t really one):
If the target is to reduce overall cost, why would you compare profits per location? And would it be profit or profitability? And how would that help you?
The way you’re presented this problem is of course very simplistic and we can’t really give good answers with so little info. However, if it’s costs you’re concerned about that’s what you should focus on!
If you think that, as a result of cost reduction, you might be closing down a high cost/high revenue location and therefore loose scale/profits - you would be right! That’s where the tradeoffs come in and why you should of course consider the revenue side of things where that might be affected.
These things are are never unidimensional but again, if it’s cost cutting you’re after, make that clear from the beginning!
This is a trade-off analysis.
You have additional complexity for some reason (e.g. additional sales). So you have to compare the extra complexity with the extra benefit that it brings and consider if it is worthshile.
(edited)
Hey Clara, Of course, the overall purpose is cost reduction and increased simplicity! Thank you, Kind regards, Rikke
I don't think you understand Clara's comment. If that's the only target, and there's no other objective or constraint, and you are only optimizing for cost and simplicity the answer is very straightforward: stop doing all of that. Actually do nothing. That way there's not cost and is very simple. So you actually need to clarify what is the constraint and what are the trade-offs to consider.