Incos Pens

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Case Prompt

Incos is a global manufacturer of writing products with divisions in North America, Europe and South-East Asia. Their global sales are $60 m and their profits amounted to around $30 m. Their European division who manufactures and sells disposable pens is experiencing flattening sales and a decreasing profit. 

The client hired you to help him come up with suggestions to get profits back on track. 

 

Additional Information

Sample Structure

I. Increasing revenue – 1

Since sales are flattening, what type of suggestions would you make to help increase revenue?

I. Increasing revenue – 2

The client has actually thought of entering the segment for premium pens since margins are higher there. How would you go about estimating the market size for premium pens in Europe?

I. Increasing revenue – 3

Given that the premium pen segment is a new segment for Incos, can you think of any barriers to entry?

I. Increasing revenue – 4

The team has also run some scenarios on economics & profitability. We have some data on one of the scenarios. Calculate profitability and then make a recommendation on whether the client should enter the segment or not.

II. Decreasing costs – 1

Let's move over to costs and see if we can increase profits by reducing costs. We have some data for you on the cost breakdown. What are some ways to reduce costs for Incos?

II. Decreasing costs – 2

Let's look more into the outsourcing option to China. What cost reduction can we realize if we move production to China, assuming that wages are only 15% of wages in Europe? What other factors should you take into account?

III. Recommendation

We're out of time. You run into the Incos CEO and he asks you for a summary. What would you communicate to him?

Further Questions

  • Assume that we can't save the division and the company wants to sell it to another player, how would you ensure our client receives the highest possible price?
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