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Anonymous A

Hello,

Could you please explain me the difference beetween a declining sales performance and a low growth sales?

What are their possible causes ?

Thanks in advance

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Gabriel replied on 05/27/2018

Hello!
I think that declining sales performance can mean that sales is declining. It could be high on it's way down, or going from bad to worse. In other words, there's definitely an element of negative growth in sales.

On the other hand, low sales growth is just that -- the sales is generally flat. It might not be a good or bad thing in itself; you will want to check how this has changed over time and vis a vis the industry. If it's low growth but you are 50% better than the industry average, that's sort of good news.

In both cases, if this comes up in a case interview, it's a good idea to clarify with interviewer. Ask him to help you define and quantify this, and do also check how it's changed historically and how it benchmarks to competition.

Vlad replied on 05/29/2018
McKinsey / Accenture / Got all BIG3 offers / More than 300 real MBB cases / Harvard Business School

Hi,

It's quite simple:

  • Declining sales = declining trend (e.g. 100M -> 90M ->70M)
  • Low growth rate = growing sales with the growth rate not satisfying the shareholders (e.g The company is growing 2% while economy is growing 4% or competitors are growing 6%)

Best

Shalom replied on 05/31/2018

Declining sale performance isn't very specific... I understand it to mean that either sales are actually dropping, or that sales growth isn't as good as in previous times.

Low growth sales I believe means growth, but in relatively lower percentages...

Either way - I'm confident it's perfectly ok to ask an interviewer to clarify

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