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Help with revenue and cost drivers!

Anonymous A asked on Oct 21, 2018

I'm stuck of thinking of ways to increase revenues and decrease costs for each of the major industries covered in cases e.g CPG, Tech, Pharma etc

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Vlad replied on Oct 22, 2018
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School
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Hi,

I recommend selecting the top industries and downloading the annual company reports of the biggest public companies in each industry. Start going trhough the reports and googling all the concepts that you do not understand. It's good to make a mindmap for each industry / function

Focus on the most common industries in the following priority (sorted by probability of geting a case): 1-retail and CPG; 2-airlines; 3-Telecom; 4-banking; 5-natural resources; 6-tech

For each industry, you should understand:

  • Revenue streams
  • Cost structure
  • Margins
  • Key performance indicators
  • Key revenue drivers
  • Industry trends

I strongly recommend drawing the typical structures for each industry - profitability, value chain, etc

In terms of functional knowledge it is:

  • Marketing (Brand and trade marketing tools, etc)
  • Supply chain (Ops metrics like cycle time and throughput time, distribution and delivery specifics, etc)
  • Operations (Process optimization basics)
  • Finance (Very basic Finance and Valuation)

Good Luck

Best!

Elias
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updated his answer on Oct 22, 2018
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Hi Anonymous,

this is obviously a HUGE question.

A very basic, but useful framework for the revenue side is the Ansoff Matrix (look it up). This will help you to come up with a lot of ideas.

On the cost side, you should consider the two main drivers: economies of scale and economies of scope. Also, think about the configuration of the value chain: where do you see the potential for in- or outsourcing? Is "geo-arbitrage" an option, by shifting labour-intensive processes to low-wage countries (or energy intensive processes like Aluminum smelting or data centre operation) to countries with low energy costs, such as Iceland. What about a reduction of complexity (--> A/B/C analysis)?

I know these are just some very general pointers, but they should get you started.

Cheers

Elias

(edited)

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