Hi there,
Overall, your structure contains the key elements that you will need to solve most cases. I do have a couple of specific comments, though, that will help you improve it.
1) break down your profit tree further (especially on the revenue side)
In some cases, the real "heart" of the answer will be a level deeper than the structure you show. For example, it is not just that "quantity has decreased" but it's that "the number of customers we have has decreased, but the sales per customer have remained the same". This can have a significant effect on your answer.
- Revenue
- Price
- Quantity
- Number of customers
- Sales per customer
- Average purchase size
- Number of purchases
2) Only ask questions on competition if that part of the initial structure has revealed an insight.
Always ask yourself "why am I asking this question?" Asking about competition is just helping you understand the source of the problem more - e.g. "is it just our product mix that has shifted towards cheaper products or is this an industry wide problem?". Therefore, you should only ask about a competitor's price or product mix if that element of the structure was identified as an issue or point of interest when you were going through the profit tree. Asking questions on competitor's price if you already know that the issue is not one of price will make you seem like you are not hypothesis driven and will reflect poorly on your performance.
My advice here would be to not even put competition as the second part of the structure, but rather to say "after I have identified the specific source of the profitability problem, I want to look into what our competitors are doing and figure out if this is a specific company X problem or whether it is affecting the whole industry"
3) Customise turnaround strategies
Your strategies can be broken down into broadly two buckets: 1) strategies that can help turnaround the specific issue (e.g. lower number of customers) and 2) other strategies that can help turn around other components of the profitability tree.
Solutions under 1) are generally preferred because they fix the actual source of the issue, but this is not always possible (e.g. if it is a macro trend), then you may want to look at other levers to try improve profitability. For example, a lot of banks which have their revenues threatened and challenged by Fintechs and increased regulation/competition are now turning to cost-cutting and leaner organisational structures to maintain healthy profits.
4) Overall, you should be more clear that every subsequent phase of your structure depends on the previous phase.
As I explained above, you should only look into competitor benchmarks in the areas you have identified as important. Your turnaround solutions should be focused on turning around the specific source of the issue rather than generic turnaround solutions.
Hope this helps!
Alessandro