Expert with best answer


97% Recommendation Rate

346 Meetings

4,792 Q&A Upvotes

USD 319 / Coaching

Revenue structuring

Anonymous A asked on Nov 15, 2018

Hey guys!

I have a question about revenue structuring. Let’s assume we have a case where we should focus on a company which only has one product generating revenue. Let’s say it’s a company selling railway tickets. Usually I structure that kind revenue by splitting it into price and quantity (for tickets that would be passengers * average revenue per passenger). Though I find that split pretty basic and not MECE sometimes.

For example, if we introduce a new product modification to target a customer which is not our client yet (let’s say we introduce a discount for students or make group tickets) it decreases the average revenue per passenger and increases the number of passengers. Or let’s say we just want to change the price - it’ll affect both price and quantity which is not MECE again

I know the 2x2 matrix with current/new product current/new customers though I rarely use it in cases as it’s not convinient. Is there a frameworks which is a mix of those two?

1 answer

  • Upvotes
  • Date ascending
  • Date descending
Best Answer
Vlad updated his answer on Nov 15, 2018
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School
Book a coaching with Vlad

97% Recommendation Rate

346 Meetings

4,792 Q&A Upvotes

USD 319 / Coaching


Not sure if I understand your problem. Who said that one part of the tree can not influence the other? Ideally, your decrease in revenues due to prices should be offset by higher demand. But not necessarily (e.g. Uber that wants to grow the rides metric)

Also, you can have a third branch of your analysis - product mix. But again, I don't see any problem with price / demand correlation.



Related BootCamp article(s)

The Value Chain

The Value Chain - as e.g. by Porter - is a classic framework to structure the activities of a business and add value to products by transforming resources.

Approaching a Case

In order to get into consulting, the case study is the most important element of the interview. Here, you can learn the specific skills and concepts to solve them.

Issue Tree

The Issue Tree Framework can be used to break down the problems of a case to its components and significantly increase your speed during case interviews.

MECE Principle

The MECE principle is a way of segmenting information into sub-elements that are mutually exclusive and collectively exhaustive. Learn more in our bootcamp.