This is typical case of a company who intends to expand its product/service offering in order to grow its revenues and eventually its bottom line (profits).
The two key points to be analyzed in such cases are the attractiveness of the industry and the ability of the company to win in the new market (detailed in section “Suggested approach”).
In the middle of the case there is a small market sizing question which is partially solved by the interviewer, by providing the interviewee with the number of vehicles that use the telematics service in the USA.
Suppose Virgin launches Carmatics at the beginning of next year. It aims to make revenues of 44 million with Carmatics in the first year of activity.
Suppose also that they started only in the segment commercial vehicles using selling to vehicle manufacturers (not to the retail).
They count for 16% of the whole market.
How much market share in this specific segment (manufacturer and commercial vehicles) should they gain in order to reach their revenue goals (100% means all the segments would belong to Carmatics)?
Suppose also that the total market has been this year of 3 billion dollars.
More questions to be added by you, interviewer!
At the end of the case, you will have the opportunity to suggest challenging questions about this case (to be asked for instance if the next interviewees solve the case very fast).