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Vlad

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6

Revenues Growth Cases | Toolkit

Hey PrepLounge community,

Revenues growth cases can be hard, and they had me thinking: is there a mental toolkit to structure these cases?

I am not talking about top-down pre-cooked structures to use with the interviewer, rather some mental structures that can help me understand the problem.

After some thinking, I have come out with this approach:

Growth Limits
Are there constraints/blocks in terms of:
1) Production Capacity
2) Distribution Channels
3) Other (case-specific)


Growth Areas
Which are the macro-areas of growth
Ansoff Product-Market Matrix
- Market Penetration
- Market Development
- Product Development
- Diversification

Growth Strategy
- Internal Growth/Development
- M&A
- J.V.

What do you think? I have not included 'Why' because the objective should be asked for every case.

Thank you in advance!

Anonymous

Hey PrepLounge community,

Revenues growth cases can be hard, and they had me thinking: is there a mental toolkit to structure these cases?

I am not talking about top-down pre-cooked structures to use with the interviewer, rather some mental structures that can help me understand the problem.

After some thinking, I have come out with this approach:

Growth Limits
Are there constraints/blocks in terms of:
1) Production Capacity
2) Distribution Channels
3) Other (case-specific)


Growth Areas
Which are the macro-areas of growth
Ansoff Product-Market Matrix
- Market Penetration
- Market Development
- Product Development
- Diversification

Growth Strategy
- Internal Growth/Development
- M&A
- J.V.

What do you think? I have not included 'Why' because the objective should be asked for every case.

Thank you in advance!

Anonymous

(edited)

6 answers

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Hi!

It's important when the growth question is being asked:

  • At the beginning of the case as the main objective
  • In the middle of the case as a question on creativity

At the beginning of the case, the structure will depend very much on the objective, context and the type of the case. In some cases (Growth strategy) I will use a broader structure (Market / Competition / Company / Growth options), in others (e.g. “how to increase the excessive luggage revenues for an Airline”) I will structure to solve a particular problem (In our airlines example: Pricing / Volume and weight limitations / Actual volume / Additional luggage revenue streams)

A good broad structure for growth strategy cases:

Analyze the market:

  • Size and growth rates
  • Segments (geographical, customer, product) and growth rates
  • Regulation
  • Key market trends

Analyze the competitors:

  • Market shares
  • Growth rates
  • Profits
  • Unit economics (Products, price per unit, cost per unit)
  • Key capabilities (Distribution, supply, assets, knowledge, etc)

Analyze our company:

  • Market share
  • Growth rate
  • Profits
  • Unit economics (Products, price per unit, cost per unit)
  • Key capabilities (Distribution, supply, assets, knowledge, etc)

How to increase revenues:

  • How to increase the scope: Product / customer scope, geographical scope
  • How to improve value proposition (How to fix your weaknesses and improve your strengths; Potential increase in price and volumes)
  • How to answer the competitors (Unique or hard to build property and contracts; Customers / suppliers / complements with lock-in; Reputation and relationships; Organizational capabilities; Product features and know-how)
  • Other benefits of scale (Spreading Fixed costs, Change in technology, Bragaining power)

However, if it is the questions on creativity in the middle of the case as the question on creativity I would use the following framework:

Non-Organic growth

  • Vertical integration (Buying a distributor)
  • Horizontal integration (Buying a competitor)

Organic growth

  • Scale - Product (Value proposition, quality, etc), Pricing, Marketing spent, Distribution channels
  • Scope (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 variations of products. Think of breadth (e.g. collection size in fashion) and depth (e.g. sizes and colors of dress) of your product line.

Best!

Hi!

It's important when the growth question is being asked:

  • At the beginning of the case as the main objective
  • In the middle of the case as a question on creativity

At the beginning of the case, the structure will depend very much on the objective, context and the type of the case. In some cases (Growth strategy) I will use a broader structure (Market / Competition / Company / Growth options), in others (e.g. “how to increase the excessive luggage revenues for an Airline”) I will structure to solve a particular problem (In our airlines example: Pricing / Volume and weight limitations / Actual volume / Additional luggage revenue streams)

A good broad structure for growth strategy cases:

Analyze the market:

  • Size and growth rates
  • Segments (geographical, customer, product) and growth rates
  • Regulation
  • Key market trends

Analyze the competitors:

  • Market shares
  • Growth rates
  • Profits
  • Unit economics (Products, price per unit, cost per unit)
  • Key capabilities (Distribution, supply, assets, knowledge, etc)

Analyze our company:

  • Market share
  • Growth rate
  • Profits
  • Unit economics (Products, price per unit, cost per unit)
  • Key capabilities (Distribution, supply, assets, knowledge, etc)

How to increase revenues:

  • How to increase the scope: Product / customer scope, geographical scope
  • How to improve value proposition (How to fix your weaknesses and improve your strengths; Potential increase in price and volumes)
  • How to answer the competitors (Unique or hard to build property and contracts; Customers / suppliers / complements with lock-in; Reputation and relationships; Organizational capabilities; Product features and know-how)
  • Other benefits of scale (Spreading Fixed costs, Change in technology, Bragaining power)

However, if it is the questions on creativity in the middle of the case as the question on creativity I would use the following framework:

Non-Organic growth

  • Vertical integration (Buying a distributor)
  • Horizontal integration (Buying a competitor)

Organic growth

  • Scale - Product (Value proposition, quality, etc), Pricing, Marketing spent, Distribution channels
  • Scope (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 variations of products. Think of breadth (e.g. collection size in fashion) and depth (e.g. sizes and colors of dress) of your product line.

Best!

(edited)

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Hi Anonymous,

interesting framework, and good overview of different levels for your toolkit. Some comments:

  • Sequence: go from broad to specific: a) Growth Strategy, b) Growth Areas , c) Growth Limits
  • Wording: for the Growth Strategy part, a) organic b) inorganic is a concise way to sum up what you what you want to say. Also consider the word "Growth Limit" - could you make it a bit more neutral by just calling them "Growth Factors", since they could be positive or negative?
  • Growth Limits: following your logic of using Ansoff, I would suggest to also consider whether there are market-based limits to growth (e.g. market size, growth, barriers to entry/exit, key industry changes like new players, technology, regulations) next to your company-based limits to growth. For the latter, also consider competition, capabilities, and USP/differentiation.

Other than that a valid model - Keep it up!

Best,

Christian

Hi Anonymous,

interesting framework, and good overview of different levels for your toolkit. Some comments:

  • Sequence: go from broad to specific: a) Growth Strategy, b) Growth Areas , c) Growth Limits
  • Wording: for the Growth Strategy part, a) organic b) inorganic is a concise way to sum up what you what you want to say. Also consider the word "Growth Limit" - could you make it a bit more neutral by just calling them "Growth Factors", since they could be positive or negative?
  • Growth Limits: following your logic of using Ansoff, I would suggest to also consider whether there are market-based limits to growth (e.g. market size, growth, barriers to entry/exit, key industry changes like new players, technology, regulations) next to your company-based limits to growth. For the latter, also consider competition, capabilities, and USP/differentiation.

Other than that a valid model - Keep it up!

Best,

Christian

(edited)

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Great answers have been given already, but I do have one addition for growth limited. You should also consider practicalities here. It is great that there are a technical supply and demand equilibrium, but can this company actually deliver and sell. E.g. working capital or marketing reach

Great answers have been given already, but I do have one addition for growth limited. You should also consider practicalities here. It is great that there are a technical supply and demand equilibrium, but can this company actually deliver and sell. E.g. working capital or marketing reach

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Hello!

Really well done and comprehensive exercise, congrats.

The only comment to add is that in limitations, you need to include all the ones related to demand/consumers, that have not been yet taken into consideration and are a huge boundary condition.

Hope it helps!

Cheers,

Clara

Hello!

Really well done and comprehensive exercise, congrats.

The only comment to add is that in limitations, you need to include all the ones related to demand/consumers, that have not been yet taken into consideration and are a huge boundary condition.

Hope it helps!

Cheers,

Clara

Dear A,

Your toolit looks quite nice, and I would like to pay your attention on what Antonello said - to be as specific as possible on every case.

Wish you good luck,

André

Dear A,

Your toolit looks quite nice, and I would like to pay your attention on what Antonello said - to be as specific as possible on every case.

Wish you good luck,

André

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Hi, I think you developed a good scheme to approach it. I confirm you should avoid applying standard frameworks to every problem, your role is to be case specific. However, I find this framework a good starting point to customize your approach to the question, the client and the industry

Best

Antonello

Hi, I think you developed a good scheme to approach it. I confirm you should avoid applying standard frameworks to every problem, your role is to be case specific. However, I find this framework a good starting point to customize your approach to the question, the client and the industry

Best

Antonello

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