We are a German owned water provider company based in the south west of the United States. As the biggest water provider in the region we serve the majority of the south west region.
We measure our performance using the Economic Value Add (EVA) valuation technique. We are currently at a negative EVA level; what do you think we should do to achieve a positive EVA?
The case is designed to be presented to the candidate by an interviewer, who plays the role of a representative of the German owned water company.
There is no real answer to the problem, hence the candidate should be evaluated on the type of suggestions he makes.
The company should either start a new sales channel (for example bottled water) or expand into new regions by merging with a local firm.
Provide the following information to the candidate if requested:
For example, the firm could start selling bottled water.
Currently the firm serves the south west region of the USA. Since the company has additional capacity, they should consider expanding into other regions of the country. Regulatory concerns come into play when discussing such a geographical expansion.
Merging with a local firm and dropping the German name should be considered.
The company should either start a new sales channel (for example, bottled water) or expand into new regions by merging with a local firm.
If the interviewee solves the case very quickly, you can come up with more challenging questions.
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