case int prep (version 1)

8/8/2019 Case Int Prep (Version 1)

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Demographic stats

Brain teasers

Guessestimates


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Attribute 1 Attribute2 Attribute 3

Product 1/ Competitor1 Yes No Strong

Product 2/ Competitor2

Price Product 3/ Competitor3

Differentiation

Fat rabbit

Quality

Market share

Solving the

Factto

Factor


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Attribute4

Weak

The Lifecycle

puzzle

Current MBA Class

Acceptance&

Transition

ApplicationProc

ess

Pre-application

Marketing

Pre-applicationMarketing

Next MBA Class

Academics

Assessments

Besides Work

Career Services

Academics

Assessments

Career Services

Besides WorkAlumni

Previous MBA Class

September&Wee

k 0

1

The Goal

4

Factor 2

Factor 3


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Acceptance&Transition

ApplicationProcess

September&Week0

Alumni


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What is the data we are looking at to draw the conclusion ?

What is the accuracy of the data ? If the process has remained the same then I would question the huma

The precise defination of the term like cost ? What is it exactly, what are the things I am using to measure

Once I am sure the basic parameters have not changed I would go further

What are the trends in similar scenes from past ?

Is it me only that has experienced this phenomena or someone else in the same market?

If not in my market has the effect been passed on by someone I am linked to? Someone like buyers and s

If it not by someone I am linked

Annother thing which needs to be addressed is what is the type of market I am in ?Industry lifecycle

Monopoly, Olgipoly,

what is the kind of demand which is generally there ? Changes with season or ??

How are the goods typically produced and distributed

what is the type of company? Pvt, public,

cost of capital

Always have something for remainder

How is the product is it used in conjunction with some product ?

if there is a change in product there is a strong possibility of the production process changing ?

There can be change in raw materials. Maybe with this change the consumers like or hate the product.

The use of the product might change

sbsm4075:

always when pinningdown a approach as if Igo down this route is itresonable to you ?

sbsm4075:

The moment you nail downa parameter pin it down anddraw a matrix. Eg: marketshare/quality see the matrixsection.

Product:

How is the product used ?How is it manufactured ?Suppliers ?Price change in product?Where is it in the market place?Has the market taste changed or is it the same?How do consumers buy based on their market

decision?

Whenever suggestingto increse spending onmarketing first makecurrent process efficent

then increaseallocation.

If the answer is NOit is a good thing towhy No?

sbsm407

Always havimplement


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factor.

?

uppliers?

sbsm4075:

Well I would attack this problem by first questioning thebasic assumptions. Then if all my assumptions hold truethen I would check the external factors and theninternal. If there is a external factor which has led to the

change then is it the external factor only or has itchanged some internal factor too. Same for internalimpacting the external.

I would also re-verify what is my desired state or perfectstate which i am looking for. Is it high sales low cost overlong term or there is some different motives i amchasing now. Like maybe my aim is to innovate as i amat different level in the product cycle.

Always when conveyinga decision say the pro'sand con's and hightlightthe unknown whichmight be there.

thenask

:

eation


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Estimate of population of various cities


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Middle position where you are audible and in vision of everyone.


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Response rate

types

cataloges

television

radiointernet

mailing

sites

Billboards

mailers

tele-marketing

schemes

events

merchantdise


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My profits have fallen what do I do ?

Frameworks

Which industry ? BCG

What is the data you comparing against ? Product Mix

Internal Factors/ External factors Market Assesment

Internal

Run through all subjects

Any major long time expense

Operations

BCG matrix

Industry lifecycle

Innovation Revenue increase but lossCyclical demand Product mix

Cost per item down so not

Labor policy Then look at items which c

Price cutting by competitor

To tell that lets run through all items and thenwe get to production or efficiency

What has changed since last datacollection

Run down the Balance sheet andincome statement

What was last time profit it mighthave eaten into this one

Dont stop at iternal even though you identifysomething. Ask and be sure about external.


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Dying market

Market Issues

Supply shrinks

New equilibrium- lower price-Lower quantity

Competitor response

Possible substitutes

Strategic Alternatives

New Markets for new products

new products with existing capabilities

Fight it out

Acquire new capabilities

es Exit-after milkingCompany issues

profitable Change affect client

onstiute cost product mix

Rent strategic

Wages shareholder perspective

Utility bill labor flexibilities


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Price Increase

Would basically see if it is a price increase caused by some real changes in internals or its a virtual change.

In terms of vitual or un real terms would be

How is the cost being calculated such in terms of average cost.

Change in virtual could be because of following factors

Some exceptional circumstance such as next week being a holiday or strike

Change in collecting data

Change in how I am viewing data

Strategic change: maybe cutting down cost in this product is linked to something else

I am attacking annother customer in his present market.

Maybe discounts on this product might lead to benefits on annother.

Charity IF CHANGES ARE TE

Excess inventories and I am moving to annother product.

Some scheme which 2 for 1 which has changed product prices

Change due to factors which do not affect the product externally

Change in regulation

Change in market structure due to player moving in or out

predatory pricing

exceptional or other circumstance

Innovation coming in the market.

Moving the product up in value chain by a marketting campaighn

Change in distribution channel- more direct buying

Production moving closer to market.

seasonal resons

Has the market size grown

Change due to factors which do not affect internally

Cost to manafacture goods has changed

First always check data if a parameter previously considered has been moved in or out or

Estimation policy could be such as computing the man hours put into the product

labour expenses

raw material suppliers

machine costs

distribution costs

marketting and advertisement

Cost of good soldselling and distribution

administrative expense

research and development

Am I just increasing my surplus without any additional change in product intrinsic qualities ?

If not changing intrinsic qualities, have I launched a marketting campaighn or something similar to inc

Factors affecting price


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Product Based

Product differenciation: few factors to differentiate

Product is an input which the buyers use to produce the final good. So there is a tendencyNetwork externalities.

Using one product in conjunction with annother.

Substitutability

Market Factors

Competition - Monopoly, oligopoly

Market growth rate

Total demand in the marketTotal production capacity in the market

Collusion

Customer Factors

Buyers expenditure are a large proption of total costs. A reverse example is a health care

Comparison between prices is difficult. That is a form of first degree discrimination.

Switching costs.

Other

RegulationAnti-trust practices

Inflation

Factors affecting price sentivity


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MPORARY THEN DONT RECOMMEND CHANGES

changes in estimation policy

ease the product value?

sentivity


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to pass on the costs.

service where expenditure is less.


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motive to expand ? Dispose excessive cash, attack competitor, derisk in terms or market, use excessive

Get to know the type of industry ?

External Internal Market

Porter Frameworks

whether it is a local or a global market Market AssesmentGet about product info from new Product info sheet Product portfolio analysis

Core competency cash flow with coc

BCG matrix

Concentration in the industry Run through all subjects

Nash equibilirium Strategy

Motivation - attack the competitor in his market Finance- NPV,

Move into a new market Employee- OB, type of people, skills,

Expand ME- Nash,

Acquire new capability FR- Run through balance sheet, Look at ratio

DS- Market data of profitability in other indus

What is the present position and what is the desired position.

Situation

What am I doing presently (ex I am a software firm)

complication

Should we enter the new market

Key question

Would entering the market add value

Is entering the market the best alternative

Increased revenue of the combined businessIs it profitable venture

Cost benefit analysis

Other uses of cash or investment (what returns I would get)

Impact on revenues if not in business

Strategic resons

Competitor in business

Market trend

Acquire new capability

Competitive Response


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capacity, better service for alredy existing market

My productCompetitor

Cost

Features

positioningR&D

Suppliers

Design

Dependencies

manufacturing process

ry, try and run a regression


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First look internally in the orginasation

Data

Expertise

External sources

DataExpertise

Market surveys

Exchanges and find out about forms

National stats

Industry reports

Consultants


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Identify the oppurtunity

Quantify the business benefits

Calculate the payback period

Conclusion and Recommendations

eIdentify the oppurtunity

Enterprise/Application sugested Benefits


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Do a SWOT Frameworks

Type of market 4 P's

Network externalities Market analysis

Whether they entering this market Competitor Analysis

If not entering what was te previous product Product Portfolio Assesment

Is this a new enhancement cash flowIf entering the market what was the previous line of business

Can distribution channels be applied across. Run through all subjects Sunk Cost

Reaction of competitors.

Way to go ahead: Market

Franchising What drives demand

collobration Revenues Is demand incresing

New joint venture What subsitutes

Independent marketing Outlook of prices given demand/supply trends

Licensing Outlook of prices given competitive rivalry tren

Regulatory environment

Are industry cost increasing or decreasing

Costs Is the industry becoming commpetitive

Is technology shift likely

Capital More capital required in future


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Why do consumers buy target products

Will market share increase or decrease

Price premium or discount

target market position sustainable

ds strength in supply chain

Own cost versus competitor

What kind of plant or product line

plant capacity

changes in working capital


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Identifying the acquisition potential of a firm

Motivation sucessful acquisitions

business they understand

Improving market share integrate vertically - buying suppliers, custom

Gaining economies of scale business should be cash generative

gaining better and more complete market range acquired business is cash cowacquiring cash subsideries sold off and itself is p

diversify under utilised assets

Acquire technical knowhow if patented poorly managed

killing competition asset value more than market val

poor performance which can be turned aroun


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ers

ofitable

e

d


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Non interest based and non personal based example vault case study page 84

Check the motive behind the cost reduction

See cost based chapter in strategy

A H A

B Y O See common tasks and see the li

C T L

D D X

E E E Essential Benefit/Co

A

1 2 3 B

4 5 6 common pool C

7 8 9

Optimization

Making it common

Outsourcing

Is it required ?

Major categories


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nkages. Can be reduced to common pool

Impact Optimized or not

Short term Long term


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If desirable but negative cost of capital or some similar f

Sample: Vault new airplanes page 80 Is it a sizable acquisition of new resources with respect t

What are the old assets are they linked with the new on

To consider the impact go on two ways

considering present stats is it profitable deal Company snapshot and trends?

use cost of capital to delve further Market and industry trends?

Short term impact Impact:

long term impact How does it help? What are the motives we see behind

Three aspects Building synergies

Solvency, Profitability, Investor affect economies of scale

economies of scope

hygine factor to survive

How are we proposing to finance the deal? market demand

solvency Cash flow

Positive net worth operating activities

Short term tax

Current liabilities financingCurrrent assets

Interest cover

Longterm

Payment schedule

positive net worth

Profitability

Check if positive for cost of capital calculation

increase revenues

decrease cost

product mix

Profit marg.

Asset turn over

Fixed asset

Working capital

Creditors days

Debitors days

stock days


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ctor see some alternative like leasing? Getting max out of min

o present assets?

s ?

cquiring the new resource?


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Cost benefit analysis

Cost to shut down

Bad publicity because of layoff

Are cost indicative of fututre cost

Long term and short term impactProduct mix

case int prep (version 1)

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