Documente Academic
Documente Profesional
Documente Cultură
Overview
Determine Key
Issue(s)
Develop
Hypotheses
Gather Data /
Test Hypotheses
Develop Options
Make
Recommendation
Refine Answer
As the interviewer describes the situation, think about what are the key issues
facing general managment
Develop hypotheses
Make Assumptions
Calculate
Use Round Numbers!
Common sense check!
Analyze Results
Implications?
Increasing Factors
Decreasing Factors
Adjust Answer
Adjust Answer
Gather Information
Analyze Using
Profit Equation
Revenues
Price
Decreasing
Comp. pressure?
Expenses
Volume
Decrease
Increase
- Market Conditions
- Competition
Product Mix
Fixed Costs
Variable Costs
Unusual Expenses
Selling Less
Profitable Items
- Added Capacity?
- Writeoffs
- Lawsuits
Revenues
Price
COGS
Unit Volume
Direct Material
Price Sensitivity
- Elasticity
Existing Market
- Promotion
- Place
Scale Economies
/Diseconomies
- Supply Constraints
Competitive Environ.
- Substitutes
New Markets
- Geographic
- Economies of Scope
Inventory Mgmt.
- Carrying Costs
- Shrinkage
SG&A
Direct Labor
Variable O/H
Replace w/machines
- Union?
Cost Acctg.
- Allocation Drivers
- Does pricing
reflect Cost
Market Demand
Industry Capacity
Competitors Plans
Market Trends
Threats
Improve Productivity
Add Capacity
Cyclical / Seasonal
Bottlenecks
Add shifts
Economy
Acquire
Global Competition
Consum er tastes
Outsource
Substitutes
Company
Customer
Competition
Regulatory
Product
Is quality sagging?
Tastes changing?
Do new tax
incentives exist?
Price
Have sensitivities changed?
Overpriced versus our competition?
Disposable income?
Place
Is our distribution getting squeezed out?
Are Customers Changing Channels?
Promotion
Are we spending?
Push vs. pull?
Customer
- What do they want?
- How do they choose?
Values/Tastes
Price Sensitivity
Competitor
- Where are we positioned?
- Where is the competition?
Purchasing Habits
Product
Company
- How do we add value?
Resources to respond?
Business relationships
Place
Susbsitutes
Disposable income
Distribution channel
Demographic changes
Mature market?
Bundled product?
Cost structure
Distributor
Tangible
Vendor
Intangible
Customer
Price
New customers?
Normal good?
Promotion
Finances
Customer
Does product met a need?
Competition
Is there any?
Yes
Product
Have we done homework?
What does the segment want?
Proliferation of products already?
Price
Have we explored sensitivity?
Can we make a profit at this price?
Many
Is market growing?
Promotion
Push or Pull?
Cost of launch?
Will current promotions help?
Company
Can we do it?
No
Few
Yes
Can we beat them?
No
Can we erect some?
Finance
Are we able to finance the launch?
Should we buy an existing producer?
Operations
D0 we have capacity?
Supply network?
Marketing
Will we cannibalize existing products?
Is this a complement / bundled good
Does it build on resources?
Place
Is distribution aligned with customer?
Are we experienced in this channel?
External
Quantitative
Educational Differences
Amount
Is organization consistent
with overseas 'autonomy'
Timing
- Startup / disposition
- Operating
Corporate Values
- Bribery
Worker's conditions / child labor
Seasonality
- Weather
Discount Rate
Cash Flows
Distribution system
- Transportation infrastructure
- Different channels
Political Climate
- Instability
Local Market
- Size
- Competition
Investment Decision
NPV Analysis
Useful Life
Cash Flows
Timing
- Opportunity Cost
Other Factors
Discount Rate
Strategic Fit
Synergies
Environmental
Political
Competitors
- Missing Links
of Value Chain
- Seasonality
- Volatility
- Inflation
Demand Cycle
Stability
Regulation
- Current Supply
Potential Demand
Size
- Market Potential
- Outflows
- Working Capital
Analyze Opportunity
Internal Factors
External Factors
Strategic Objective
Resources
Acquisition Fit
Industry Attractiveness
Identify Acquisition
Candidates
Soft Issues
- Culture/Fit
- Management
Hard Issues
- Price
- Balance Sheet
Self-Help
White Knight
Classic M&A
Is there a Firm That...
Yes
No
Do We Have Cash?
Yes
Then Buy Back Stock
to Raise Stock Price
No
Can We Release Good News
to Raise Stock Price?