Practice With Profitability Analysis Cases
Hara Coffee Co's innovative coffee subscription model
Our client, Hara Coffee Company, is a large coffee chain with over 200 locations in the United Kingdom. They import beans from numerous regions and batch-roast them in the UK, offering customers a vast selection of premium blends. In addition to serving delicious coffee, our client offers freshly made sandwiches, pastries, and salads of the highest quality. Hara Coffee Co. is also one of the most socially and environmentally responsible coffee brands in the United Kingdom, and their value proposition heavily relies on customers paying a premium for delicious products that do not compromise on sustainability metrics.
The rising cost of living has significantly reduced the revenue of coffee chains throughout the United Kingdom over the past year. People are increasingly choosing to brew their own coffee at home, with beans delivered by subscription. The CEO of Hara Coffee Company is intrigued by the expansion of coffee subscription models in the UK. They requested that our team investigate whether their chain could also introduce a coffee subscription model, in which customers pay a fixed monthly fee and receive a certain number of coffees throughout the month.
The Jaywalking Case
The Government of Spain has tasked the City of Barcelona to increase their revenue generated from the City.
Thus, in order to generate more revenue, the Local Government of Barcelona has engaged our firm to examine the viability of passing a new law imposing a fine on jaywalking violations.
How should we approach this?
McKinsey 1st Round Case - Party Burger
Our client is Party Burger, a restaurant chain in the US serving premium burgers and salads for lunch. They rely on the quality of their products to attract customers, and they are usually fully booked. However, reviews have pointed out that the service offered could be improved. Our client is concerned this could impact their sustainability long term.
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MBB 1st Round Case - Hazella Light
Our client is an Italian multinational manufacturer of branded chocolate and confectionery products. One of their most popular products is Hazella, a hazelnut spread.
Despite its worldwide popularity, Hazella is considered to be high in calories by some customers. For this reason, our client has developed a new version of the spread, Hazella Light, and is assessing whether they should launch it in the Italian market.
BoxxFitness Gyms
Our client is the CEO of BoxxFitness - a leading gym chain in the US with over 1,500 gyms. BoxxFitness is a premium gym concept with an annual membership fee that is 2-3x higher than most mainstream gyms. Each gym has a limited number of membership slots. Each member gets a dedicated locker, unlimited personal training, unlimited classes, and unlimited equipment usage. In the last 3 years, the chain has seen a decline in its profit margin.
Can you identify the potential reasons for this decline?
Bain 1st Round Case – BlissOttica
Our client is a BlissOttica, an Eyewear Manufacturer that is looking to reach a 10% increase in profits. How would you help our client?
Caribbean Island – MBB Final Round
A wealthy client has recently bought an island in the Caribbean. She has engaged us to identify possible uses for her new island.
MBB Final Round Case – Non-Profit Museum Revenue Increase
Your client is ‘Muse 19’, a Museum in Paris with a large collection of 19th century artifacts, predominantly paintings and sculptures. The museum is run by a non-profit organization based in France. The museum is quite popular amongst students, artists and tourists. Last year the museum attracted almost 2 million visitors. Despite this, the museum’s revenue has been declining for the last three years. Surprisingly, other museums of similar nature have been doing much better than Muse 19. The museum director has approached you for advice.
Changes in cookies market
Your client is a US-based manufacturer of branded cookies, Gumbread Inc. The client realized that their sales have declined in recent years. The client wants to know what they should do to do drive sales again.
CoffeeWorks reusable cups
CoffeeWorks is one of the leading coffee retail chains in the UK. The client is planning to introduce reusable cups with an aim to decrease the consumption of single-use disposable cups.
The main goal of the client is to enhance their brand image as a sustainable retailer without harming current profitability levels. Thus, they approached us to check whether they should go ahead with their plan.
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COVID-19 impact on Heathrow Airport
Your client is the CEO of Heathrow airport (London), the busiest airport in Europe in terms of commercial traffic.
Due to COVID-19, the airport's operations and hence, revenue streams, have been severely affected.
The CEO asks for your help with the preparation of the upcoming Steerco, focused on:
“How to secure Heathrow's revenue streams during April-June 2020, mitigating the effects of COVID-19”.
Espresso, Whatelse?
Espresso Whatelse is an Italian company that produces coffee and espresso machines since 1908. It is the Italian market leader and has a strong presence overall in Europe. In 2019, Espresso Whatelse has increased its revenues but it has seen declining profit margin.
Your client wants to understand the root causes of this 2019 trend and how to increase its profit margin again.
LightFast - Launching high-speed broadband in Indonesia
Your client is the CSO of LightFast, a Middle-Eastern telecoms and media player. They are a national incumbent player who expanded operations into South-East Asia and North Africa in late 2010s. Their operations in Indonesia include pay-TV and fibre-optic broadband. However, the broadband business has flat-lined since launch.
LightFast is now looking to reset its Indonesian subsidiary and has asked you to advise them on whether they should re-launch or close operations.
They would like you to advice on the size of the opportunity if they were to re-launch in Y1, estimate the expected payback period and then highlight key considerations to make a go/no-go decision.
Double trouble
Our client is RedBus, one of several operators of iconic double-decker public transport buses in London. Over the past three years RedBus have experienced declining profitability, as a result of reduced demand for buses due to growth in affordable taxi services, such as Uber.
The client is looking to understand the root cause of the issue and discuss ways to improve profitability.
Sandwich Bags
ConsumerPackagingCo is a small, US-based consumer products packaging company that develops, produces, and sells plastic bags for storing sandwiches. The client currently owns one production line.
Since demand for their plastic bags exceeds production capacity, ConsumerPackagingCo wants to determine how they can best utilize their current production capacity to maximize profits, and whether investing in a second production line would be economically viable.
Sprinker
Sprinker is a mid-sized, US-based publishing agency that develops, produces, and sells educational materials. It has come to their attention that some private schools are considering changing their first-grade textbooks, for which they would need a publishing agency.
Sprinker is interested in participating in the closed tender and wants to determine whether this would be economically viable.
Inverto Case: VacuLuxe Innovations' Supply Chain Makeover
The client, VacuLuxe Innovations, is a manufacturer for vacuum pumps, e.g. rotary vane pumps, cryogenic pumps located in Germany. The company has grown from a start-up to a major corporation over the last 50 years. However, after benchmarking the economics of their business, the client discovered that their direct spend (i.e., COGS supplier spend) represented a higher percentage of their revenue than their closest competitors.
The client's top management has engaged the SCM and procurement specialized consultancy Inverto to advise the company in this critical situation.
An initial meeting with the CPO of VacuLuxe Innovations will be conducted tomorrow. VacuLuxe Innovations aims to discuss optimization potentials in the current collaboration with suppliers as well as levers to improve the supply chain resilience & carbon footprint. Unfortunately, VacuLuxe Innovations has only submitted the following high level data for their direct spend yet.
Inverto Case: Fast Dish Restaurant
Fast Dish, a publicly traded Quick Service Restaurant (Franchise) company with over €20 billion in revenue and more than 20.000 restaurants globally, has recently faced major challenges with regards to supply chain management and sustainability.
The client's top management has engaged the SCM and procurement specialized consultancy Inverto to advise the company in this critical situation.
Baby Clothing Market Entry
Our client is a consumer packaged goods company looking for top-line growth opportunities. They are considering extending its pre-existing baby products brand (e.g., Huggies) into a new product category – baby clothing.
They are looking for this business to generate +$300M revenue per year, beginning in Year 1.
Should our client enter the baby clothing market?
Deep Water Rescue
Deep water is a European manufacturer of small yachts and premium boats for private customers. The company operates in Europe and the Middle East and is based in Northern European country, where its manufacturing site, as well as HQ, are located. Deep Water has a strong and recognizable brand as a manufacturer of luxury boats and (recently) also small yachts. Deep water has been experiencing significant financial difficulties related to its profitability during the several past years. Currently, Deep Water has about 200 M€ of sales p.a. The company wants to improve its profitability, maintaining at least the current level of sales.
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