Your client is Italian Beauty Company (IBC), a high quality beauty products company. It is well established in Italy.
One of their major product lines is high quality home hair-color kits. They manufacture these products in-house and sell it through retail outlets and drugstores.
Recently their market share has declined. Their competitor Cosmetica INT. has also become more popular.
IBC would like your firm’s advice.
Since this is an interviewer-led case, the interviewer should guide the candidate through the interview.
There are two parts to this case.
The first part is more qualitative. The open-ended questions should prompt the interviewee to think about the problem and its solution.
The second part is more quantitative in nature. In order to solve the questions, the interviewee should perform calculations.
The questions in the big boxes should be read out to the interviewee.
Since this is a very open question, there are a number of ways to approach it.
A good interviewee will mention the following aspects:
1. Product
2. Customer
3. Distribution channel
Some suggestions:
Suggested case structure:
First we should have a look at the current market situation:
The interviewee should calculate the current and future market share.
Current market
= 0.5 * $400 m+ 0.1 * $100 m + 0.25 * $50 m
= $222.5 m
Future market in two years
If we assume the current market share trends hold for women, men and teeneagers, the following sales will be the result:
Future market share
Market share change = 0.297 - 0.4045 = -0.1075
If the current market share trends hold, IBC will lose about 10.75% in market share over the next two years.
Information that can be shared on the interviewee’s inquiry:
A good recommendation will include the following statements:
We should first further segment the men’s segment, according to different needs.
Then, we should target these segments by advertising channel.
In order to successfully target both men and women together, we must further segment the women’s segment. Then, we need to find advertising channels that can reach both segments. The advertised content must fulfill the needs of both segments.
If the interviewee solves the case very quickly, you can come up with more challenging questions to ask them.
Hi, 1) Youproactively ask in the beginning, even before drawing the structure (something like "What kind of products / revenue sources do we have) and then split the structure into price, qty,... (more)
Hi, The general framework for pricing is: Cost base - Value based - Competitor based - pricing strategy 1. Cost based - you actually check what are the costs and apply standard industry / target... (more)
Hi Anonymous! Both are valid approaches. As a rule of thumb, 1) is more suitable for a quantitative assessment (e.g. "By how much has profit declined?"), while 2) seems like a good approach for a... (more)
Dear Alice, the most important points in laying out your structure are: be MECE, be quick, be sensible.The breakdown that you are suggesting is a deeper layer that might not even be evident at the... (more)
Hi, Focus on the most common industries in the followingpriority (sorted by probability of geting a case): 1-retail and CPG; 2-airlines; 3-Telecom; 4-banking; 5-natural resources; 6-tech There a... (more)
The Value Chain - as e.g. by Porter - is a classic framework to structure the activities of a business and add value to products by transforming resources.
3 Comment(s)Learn to crack Profitability Framework Consulting Cases, which are the number 1 reason for real consulting projects and hence are an important case type.
2 Comment(s)
