TYPES

OF CASES

P&L cases.
1) any other objectives?
2) Company or industry wide problem? ExternalMarket/Ind(P=R-C)
3) LOOK FOR TRENDS- if market grew by x% this year, how much was this
% last year? Last 5 years?
4) INSIDE BRACKETS: rev and costs streams. How have they changed? IN
WHAT TIME PERIOD. SEGMENT THEM for diff products.

Not an industry probHow/why are competitors doing better?

Distribution

Buyer Purchase Criteria by Brand (BPC)

Pricing

Cost Analysis

ENTER NEW MARKET and MERGER AND ACQUISITION: X wants Y

1) Analyze the clients company
-who is X- competitor? Private equity?
-goals
-customers: specific segments to address?
-existing infrastructure/capacity/capabilitites: marketing and sales
-4 Ps: product. Price. Promotion. Place.
-PRODUCT: nature. substitutes?

2)ANALYSE TARGET INDUSTRY:
trends and forecasts- how large is the market? Penetration rate? Buyer
purchasing power?
PRICES AND COSTS
COMPETITION---major players. Shares. Market Trends
How are products diff?
Barriers to entry/regulation
competitive response from other players if we buy

3) TARGET COMPANY DUE DILLIGENCE:
how secure are its suppliers, distributors, mgmnt, customers?
- cultures match well? SYNERGIES
- key customers
- How the 4 Ps compare.
5) FEASIBILITY and RISKS
-enough funds?
-existing operational capabilities?
- HOW to enter? Start from scratch? JV?
M&A- benefits: expertise. Production facilities. Distribution channels.
-game plan if this fails?- sell/spin-off?

CHOOSING THE BEST WAY OF EXPANDING: ESRE. EXAMINE THESE FOR EACH
OPTION OF a) acquiring b) shipping c) build from scratch
1) economics
2) speed
3) relationship with customers- responsive to their needs
4) execution risk

PRICING
1) Price based costing=customers willingness to pay- survey
2) competitive pricing= benchmarking
3) cost based pricing= cost+ markup.

COMPETITVE RESPONSE
1) understand changes to determine response
-are there any new diff features?
-competitive advantages?
-customer segments
2) recommendations
- Make the current product more attractive:
redesign. Customer loyalty. Cut prices
-Introduce a different product
-Do nothing- WAIT
NEW BIGGER PLAYER ENTERING, what do you do?
1) increase barriers to entry
2) keep current customers
3) target new customers- acquire smaller players? Promotional. Increase
sales commissions.
dont enter a price war with a big player. Focus on what differentiates you-
service. Exploit loyalty.

IS A NEW COMPANY XYZ ENTERING A THREAT?
Compare profitability: (R*V)-(FC+VC)

MISC
WAYS OF ENSURING A GOOD MARKET SHARE:
1) match with consumer preferences
-image attributes and quality
-target price consistent with expectations/competitors
2) strong branding/marketing
3) operational capabilities:
-dist. Channels.
-sales force capabilities
-production ramp up to facilitate the increase in demand.
Ways of increasing market share- REV OR UNITS?
UNDERSTAND MORE ABOUT THE COMPANY: Prod. Pric.promo.financials
THEN DECIDE STRATEGY
1) Lower prices.. QUICKEST= acquisition.
2) Increase distribution channels- more stores. Home delivery. Vendors.

3) Increase and diversify product line- (more brands)

4) Strong branding/Marketing- advertising. Pricing. Bundling promotions.
But ensure no product cannabilization.
4) acquire/merge
5) increase share of wallet with existing customers-> add on products
4) EXISTING operations of same product but in other area


SOLUTIONS TO ADDRESS PROFITABILITY
Short term

Negotiate with current suppliers

Look for other suppliers (form partnerships or buy greater amounts with
batch discounts)

Long term
1) REDUCING COSTS:
Outsource functions

Call centers. Other services: operations

2) Consolidate suppliers: bundling. Bulk discounts.
-Vertical integration

OTHERS

Release new products with better margins

Increase price depending on elasticity

TECHNICALS
PORTERS FIVE FORCES:
Negotiating Power of Suppliers
Negotiating Power of Buyers
Threat of New Market Entrants
Threat of Substitute Products
Rivalry within Industry
MARGIN= PROFIT/ SALES REV
GROSS MARGIN= gross profit/ net sales
Average your %s
HIGHLY FRAGMENTED= when major top players hold only a small % of
market share- good for entering market.

The small player in a market where initial fixed investment is high, would want
to cut prices to maintain market share- so higher competitive response.
higher proportion of fixed costs and a lower proportion of variable costs is said
to have used more operating leverage. Those businesses with lower fixed
costs and
higher variable costs are said to employ less operating leverage.