Growth Strategy

Anonymous A asked on May 12, 2019 - 3 answers

When a case describes a client's situation of "stagnating growth" should both revenues and costs be analyzed? or should the analysis focus mainly on strategies for revenue growth?

Thanks!

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Anonymous updated his answer on Jun 03, 2019

Hi,

this is a very open-ended question. If you mean "profit growth", you could achieve "growth" by investigating both revenues and costs. If, however, you mean "revenue growth" then you would obviously not want to look into costs.

Again, the question is very open ended. You should always strive to narrow down/quantify the objective as much as possible. With the information given, it is unclear whether "stagnating growth" is a problem at all.

In addition, should you be targeting revenue growth, you could structure your thoughts along the lines of the Ansoff matrix, i.e.:

  1. Market penetration
  2. Product development
  3. Market development
  4. Diversification

A couple of remarks:

  • Do not tell your interviewer that you "can solve the case using the Ansoff Matrix" - this is only to structure your thoughts.
  • The sub bullets of points (1) to (4) above depend on the business and the market environment.

Hope that helps.

Best regards

(edited)

Sidi
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replied on May 12, 2019
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Hi!

On of the first things you have to do in a case is to nail down the definition of your focus metric!

You can't let the interviewer get away with a blurry question without verifying the exact definition of what he is talking about or asking for!

So you HAVE to ask what growth means for the client - growth of revenue? Growth of profit? Anything else? Based on this, the answer to your question then becomes evident.

Best, Sidi

Vlad
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replied on May 13, 2019
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Hi,

It depends on which growth you are trying to achieve. You should always ask clarifying questions:

I suggest asking the following questions:

1) Clarify the business model / how the business actually makes money. Even if you think you understand it, try to repeat it to make sure that you understand it correctly. e.g. if the case is about oil&gas company which revenues are declining, ask if it is Up / mid / down-stream problem. In this case, defining a revenue stream is critical to setting up the right structure.

2) Clarify the objective. Here make sure that your goal is:

  • Measurable
  • Has a time-framed
  • Has / has no limitations

e.g. Should I invest 100k in this business for 1 year if I want to get 15% return?

3) Ask the questions that will help you build a relevant structure and remove ambiguity.

Best!

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