Any tips for these types of cases?
Here's an example: Bank A and Bank B are the two major players in the U.S. Bank A has reduced credit cards fee to zero. Bank B wants to understand why.
Thank you.
expert
Expert with best answer
Competitive response cases
1 answer
Hi,
this is related to the customer value, weither it's retention of existing customer or attracting new ones. Here is I would proceed :
1. Understand the root cause / trigger of such action
- Is credit card fee an important criteria in customer's choice over the different banks ?
- Are current client living for new bank offering zero fee ?
- Is the bank trying to gain market share and developp its customer database by attracting new customer with this type of offer ?
2. Evaluate the customer value by identiying the different revenu generated per customer
- Recurrent revenues : credit card fees, insurances, agios, commission over exchange rate, etc.
- Project related revenues : loan interests (car, real estate, consuming, etc.)
3. Run the economics of reducing credit cards fees
- Compare the loss of credit card fees revenues on the customer databse over the value generated by new / retained customers
Hope this helps
Best
Benjamin
Related BootCamp article(s)
Getting Up to Speed
In order to repeatedly demonstrate prerequisite skills under the pressure of a real case interview, you need to learn the basics and practice cases.
Competitive Response
In a competitive response case study, your job is either to analyze what your client should do in response to a move performed by a major competitor or to anticipate what competitors will do in response to a move performed by the client
Case Studies
The case study is the most important element of the case interview, which you'll have to nail in order to get into strategic consulting. Here you can learn the specific skills and concepts necessary to solve them.
Related case(s)
Duraflex is a German footwear company with annual men’s footwear sales of approximately €1 b. They have always relied on the boot market for the majority of their volume. In this market they compete with three other major competitors. In the fall of 2013, Badger – one of Duraflex’s competitiors – ... Open whole case
Your client, Wall Inc., is a dry wall manufacturer. A new competitor has just entered the market. Since the competitor charges low price company, Wall Inc. is thinking about reducing its price by 20%. The client wants us to evaluate this plan. Open whole case
We are a global toothbrush producing company. Our portfolio consists of two kinds of toothbrushes - 'manual' that sells for $5 and an electric 'rechargeable' that sells for $60. Last year, a competitor introduced a battery-powered electric “spinbrush” that sells for $8.5 and now has 2% of the toothb ... Open whole case
Poker Inc. is currently operating four casinos in Royal City. Competitors are right now planning to open up a rival casino in Kingsville. Poker Inc. has hired our company in order to assess the consequences of the possible competitor opening and what strategies Poker Inc. should follow. Open whole case
Your client is a big bank that issues credit cards with a €100 annual fee. Recently, a supermarket entered the credit card business. The supermarket’s credit cards do NOT have an annual fee. Your client wants to know how they should react to this new competitor. Open whole case
Similar questions
