Expert case by Gaurav

Launching Caskets in North Africa - 1st Round BAIN case

Topics:
Launching Caskets in North Africa - 1st Round BAIN case Launching Caskets in North Africa - 1st Round BAIN case
4.7 5 42
Rating:
4.7 (< 100 ratings)
600+
Times solved
Beginner
Difficulty
Rating

Problem Definition

Our client is Easywood, a furniture maker based in North Africa. Easywood serves the local market and sells mainly bedroom furniture. Last year, Easywood had a revenue of around $10m and a profitability of around 20%. Though Easywood is not concerned about the growth and profitability, they are worried about the cyclicity in the business. During the festival time, the business is good, however, at other times, the period is very lean.

The CEO is considering entering into the market of caskets. He wants your opinion on whether entering the Casket market would be a good idea for Easywood.

Short Solution

Solution

Paragraphs highlighted in green indicate diagrams or tables that can be shared in the “Case exhibits” section.

Paragraphs highlighted in blue can be verbally communicated to the interviewee.

Paragraphs highlighted in orange indicate hints for you how to guide the interviewee through the case.

Additional information for the candidate, if asked:

The casket is a "Coffin", a wooden box in which people are buried as part of the last rites in some religions.

1. How would you structure your approach to the problem?

Possible structure:

  1. Is the Casket market attractive?
    1. Is it big enough?
    2. Is it profitable?
    3. Does it have year-long revenue (vs. cyclic)
  2. Is it feasible for Easywood to run Casket business?
    1. Strategic alignment/brand impact
    2. Initial investment
    3. Operational capabilities

2. Can you identify the market size for the caskets?

Additional information for the candidate, if asked:

The population of the country = 75million

Average life expectancy = 75years

% of people using caskets in last rites = 50%

The average price of the casket = $500

Share Exhibit 1 with the candidate.

  • The candidate should start with the population and first identify no. of people dying every year = 75million/75 years = on an average 1million people die every year. The candidate should call out that he has used the equal distribution of the population.

  • Then the candidate should apply the casket usage % = 1million *50% = 0.5million

  • Lastly, the average price should be applied = 0.5million * $500 = $250million

  • At the last stage, the candidate should observe that for a $10million size player, the $250million market is big enough playing ground.

3. What other data point would you need to get a sense of casket market attractiveness?

Among the factors that the candidate asks, he should have profitability of the current players, competitive landscape, etc.

We have the following data about the competitive landscape. What is your sense of market attractiveness?

Share Exhibit 2 with the candidate.

If we need to infer from the currently available data, I would say that the casket market looks attractive from Easywood perspective:

  • It is big enough;
  • All the players are more profitable than Easywood’s profitability;
  • The market does not look too fragmented;
  • Given that it is a casket market, we can assume that the market will not be cyclical.

4. What aspects should Easywood worry about on the feasibility and implementation front?

Additional information for the candidate, if asked:
  • Does Easywood have the financial muscle to enter – yes
  • Do they have product making and selling capability – yes

The major concern for Easywood would be the impact on their brand. They need to analyze how the potential buyers of ‘bedroom furniture’ customers will react if they know under the same brand, caskets are also sold.

5. So, what should Easywood do?

They should launch a separate brand to avoid a negative impact on their existing furniture products.

6. What is your final recommendation for the Easywood CEO?

Easywood should enter the casket market, with a separate brand.

  • The market looks attractive from a size, profitability, competitive intensity perspective.
  • Operations feasibility does not look like a concern, given Easywood’s expertise in making and selling the furniture

​Final Remarks

Thank you for completing my case!

I hope it was useful and helpful for you.

If you have any questions or feedback, please contact me using the link below:

https://www.preplounge.com/en/profile.php?id=54457

Best,

Gaurav

Exhibits

Exhibit 1

Exhibit 2

Do you have questions on this case? Ask our community!
600+
Times solved
Beginner
Difficulty
Do you have questions on this case? Ask our community!

Exhibits

Exhibit 1

Exhibit 2