A lot of information has been included in this case to help both the interviewer and the interviewee to get a better conceptual understanding of the industry in case no prior knowledge exists. Not all the information available is necessary to arrive at the solution. The interviewer should read all available information to help guide the interviewee towards the solution.
The goal of this case is to practice handling a large amount of information and not getting overwhelmed by it but proactively identifying which information is necessary to solve the case in a timely manner and which information does not help the interviewee getting closer to the solution.
The interviewee should be able to structure the case into two distinct phases:
Phase 1 (problem isolation) should be about identifying the root cause of the profit decline and a revenue and a cost analysis would be the fastest way to do that in this case. Once the root cause has been identified the interviewee should move on to Phase 2.
Phase 2 (problem solution) is about coming up with hypotheses to address the root cause and fix it. To do that the interviewee should attempt to get a qualitative understanding of the root cause and suggest solutions to fix that cause or identify it to be a problem that cannot be solved. Once a list of solution hypotheses has been derived each one should be tested to determine the most effective way to handle the problem.
Your client is Madhouse Studios, one of the largest anime producers in Japan. The anime-industry is flourishing. Originally revenue was generated mainly in Japan but the trend is that revenues outside of Japan are growing at a steady rate of 15% a year as more and more non-Japanese people enjoy anime. Despite this rapidly growing new segment, Madhouse lost $6m in profits at the end of 2017 even though profits were growing steadily the years before.
Madhouse has given you the objective to find the root cause of the loss in profitability and to advise them on how to proceed from here.
How would Netflix react if Madhouse stopped selling them animation rights? What factors would you need to look at to predict the response of Netflix to that?
If Madhouse would on average acquire the rights to 8 out of the top 10 manga of the year what would happen if Madhouse stopped selling their rights to Netflix? If Madhouse would only be able to acquire 2 out of the top 10 manga every year what would that mean for partnership negotiations with Netflix?