After calculating profit margins, we know that Products 1 & 3 are more profitable locally while Product 2 is more profitable internationally.
In order to maintain their leading position in the Argentinian market, the client could consider reducing its price to compete with Indian, Chinese and U.S. imports. Although this would reduce profit margins, the client’s market size could increase, thus increasing the client’s overall profitability.
The client should also consider partnering with Argentinian clients to develop new products and to establish new distribution channels (e.g.: franchising, selling at supermarkets, selling online) to increase their client base.
The client should ask the local Argentinian government to help its exports become more successful.
Ways the Argentinian government could help our client:
- Subsidies
- International commerce chambers
- Customs tax partnerships
The client should also consider acquiring companies in more promising markets (e.g.: China and India) because their main export market, the U.S., is shrinking.
Since this is a candidate-led case, the candidate should drive the case from start to finish.
This case contains a business situation (new markets, production capacity, distribution channels) and calculation tasks (profit margin of products).
The information given allows the interviewer to challenge the interviewee with other questions that are not mentioned here.
Since the case is quite broad, the interviewee may arrive at a different recommendation. This is fine as long as the recommendation makes sense and the interviewee laid out a structure at the beginning of the case that was then followed.