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Creative ways to grow revenue or reduce costs

Anonymous A

Hi, I was wondering if anyone had any out of the box ways to grow revenue or reduce costs. I am trying to prepare a list to prompt my thoughts in case I blank in an interview.

Thanks!

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Alessandro
Expert
replied on 06/28/2018
Bain & Company | University of Cambridge | CV/Resume writing | 770 GMAT

Hi there, rather than thinking of a list of creative ideas to have in advance, you should try structure your response by breaking down the question. For example, when you are asked a question like "how could we increase revenue" before bursting out ideas, I would always break it out. For example:

"To increase revenue, I can either increase quantity sold or increase the "average" price"

Quantity

  • Number of customers
    • Acquire new customers in existing market/segment
    • Acquire new customers in new markets/segments
  • Sales per customer
    • Increase number of purchases
    • Increase average purchase size

"Average" Price

  • Increase prices of existing products
  • Change sales distribution towards more expensive products (e.g. Upsell)
    • etc.

Once you get to this level, I would start structuring ideas around these buckets. This will make you seem very structured, and will also help you come up with more specific ideas, as it will focus the question into very specific buckets.

Hope this helps!

Alessandro

Vlad replied on 06/28/2018
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School

Hi,

If it is the questions on creativity in the middle of the case I would use the following framework:

Organic growth

  • Vertical integration
  • Horizontal integration

Non-organic growth

  • Existing product (Value proposition, price, volume, Revenue models (one-time payment, subscription), Channels (Online, offline), etc)
  • New markets / New segments (Geographical markets. Types of customers: B2B, B2C, B2G, etc. E.g. Female magazine may sell magazines to customers and advertising services to business)
  • New products (Product mix - you may have multiple products and variation of products. Think of breadth (e.g. collection size in fashion) and depth (e.g. sizes and colors of dress) of your product line. Croselling opportunities - e.g. selling accessories)

Here is the general approach of how to answer the questions on creativity:

1) Ask an interview for a minute to think

2) Think of several buckets of ideas. Remember to think as big as possible

3) Narrow down to each bucket and generate as many ideas as possible

4) Present the structure (buckets) and then your ideas

Creativity is in direct correlation with your business judgment that can be trained by solving various cases with partner / studying various frameworks / reading industry reports / reading the relevant books or articles on MBB websites / reading HBS cases

Best!

Astrid replied on 06/28/2018

Hi Anonymous A,

thanks for asking your question in our Consulting Q&A!

I stumbled across an old Q&A on revenue and cost frameworks that might be useful for you. Our expert Matthew mentions the following points:

Some generic buckets would include the following:

  • Core product bundles: Additional core products added on to another core product, often at a discount (e.g., home / mobile and internet, hotel / car rental)
  • Add-on products: Complementary products to the company’s core offering (e.g., warranties, extra mobile phone lines)
  • Upgrades: Premium upgrades that enhance the core offering (e.g., first class upgrades, premium engine oil, faster internet speeds)
  • Partner offers / products: Partner offers that dovetail, but don’t compete, with your products (e.g., Partner Credit Card)

For further info, check out the full Q&A: Can you suggest a mental framework to keep in mind when asked about listing possible revenue or cost sources?

Hope this helps!

Astrid

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Anonymous B replied on 06/28/2018

Hi,

I would suggest that the best way to answer this question is most definitely not a public list.

This will soon turn your 'creative' ideas into generic ones pretty quickly.

A far better technique is to go for a walk around a park, beach, open space with some music and just think about the world around you. You're not going to get creative sitting reading other people's ideas or whilst sitting at the computer.

Cheers,