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Case Notes
This case is not particularly complicated, but there is a lot of data to work with. The candidate needs to
demonstrate an ability to quickly digest the content of charts.
Note: this case is structured slightly different than other cases in this case book – questions
are all part of the case flow section.
Market Company
• Competition • Does the firm have the capability to meet
• How much market share can we demand in this market?
realistically capture in the builders • Production capacity
market? • Distribution capacity
• What will the competitive response be?
• Risks
• What are the prospects for the housing
market in the next several years? Is this a
reliable new revenue stream?
Revenues Costs
• Volume • Not central to the case, but would there be
• What is the size and growth of the additional costs due to:
market? • Changes in distribution?
• Pricing • Additional administration?
• Can we command a higher price in this
new market, or will we have to lower our
prices to compete for market share?
Recommendation Rationale
• Tristar should definitely pursue this opportunity • The home builders market is highly
as a means to close the gap between target and concentrated, but Tristar is of similar size to the
expected revenues. other two firms so it has a good chance of
capturing market share, and needs only 10% to
meet revenue targets.
• Investment required in new distribution model • Study competitive landscape to determine which
• Risk of diverting attention and resources from markets to attack and how to set prices
core business • Study distribution channels to determine best
• Housing market volatility path for establishing direct relationship with
builder/distributors
Total
Revenue 3,500 2,400 2,100 2,000 5,000 15,000
Opportunity
Tristar
Target
(~30% 1,050 720 730 600 1,500 4,600
market
share)
Tristar
Expected 785 540 555 450 1,130 3,460
2017 Sales
Remodeling
# Projects % Purchasing # Purchasing Average Total expected
Type (thousands) Appliances Appliances spend/project revenue
Minor 1,400 25% 350 2,000 700,000
Single
Major 900 80% 720 5,000 3,600,000
Family
New Addition 100 100% 100 8,000 800,000
Small
Large
Manufacturer Builder/Distributers
Distributors
Large
Builder/Distributers
Large Builders