Documente Academic
Documente Profesional
Documente Cultură
Overview
Refine Answer
As the interviewer describes the situation, think about what are the key issues
facing general managment
Develop hypotheses
Be hypotheses driven
Internal - External
NPV Analysis
MakeAssumptions
Calculate
UseRoundN um bers!
Commonsensecheck!
AnalyzeR esults
Implications?
IncreasingFactors DecreasingFactors
What'sD riving
theD ecline?
Gather Information
AnalyzeU sing
Profit Equation
Revenues Expenses
Price Sensitivity Existing Market Scale Economies Replace w/machines Cost Acctg.
- Elasticity - Promotion /Diseconomies - Union? - Allocation Drivers
- Place - Supply Constraints - Does pricing
reflect Cost
ShouldWeIncreaseCapacity?
Values/Tastes Price Sensitivity Purchasing Habits Product Resources to respond? Business relationships
Place
Susbsitutes Disposable income Distribution channel Cost structure Distributor
Price
Demographic changes Mature market? Bundled product? Tangible Vendor
Promotion
New customers? Normal good? Intangible Customer
Finances
Price Operations
Have we explored sensitivity? Many Few Are there barriers to entry? Will we be first movers? D0 we have capacity?
Can we make a profit at this price? Supply network?
Is market growing? What wil be the strategy? Yes Any precious resource
Promotion Low cost or Differentiated? Can we beat them? that we own? Marketing
Push or Pull? (Ricardian rents) Will we cannibalize existing products?
Cost of launch? Is this a complement / bundled good
Will current promotions help? Does it build on resources?
Can we eat the young? No
Can we erect some?
Place
Is distribution aligned with customer?
Are we experienced in this channel?
Doesit match our growth strategy? Cultural Differences of Customers ROI / Hurdle Rate
- ROE/ROI - Tastes / product preferences
- Values / gender roles
Distribution system
- Transportation infrastructure
- Different channels
Political Climate
- Instability
Local Market
- Size
- Competition
Investment Decision
Useful Life Cash Flows Discount Rate Strategic Fit Synergies Environmental Political Competitors
Timing - Risk Free Rate - Missing Links - Seasonality Stability - Current Supply
- Opportunity Cost - Inflation of Value Chain - Volatility Regulation Potential Demand
- Risk Adjust - Inflation
Demand Cycle
Size
- Market Potential
- Outflows
- Working Capital
AnalyzeOpportunity
Resources AcquisitionFit
Porter's FiveForces Soft Issues
ThreeC's - Culture/Fit
- Management
HardIssues
- Price
- BalanceSheet
Self-Help WhiteKnight
Yes No HasFinancialStrength
StrategicCompatability
DoWeHaveCash? IssueDebt, BuyBackStock
CulturalFit
Yes N o
ThenB uyB ackStock CanW eR eleaseG oodN ews
toR aiseS tockPrice toRaiseS tockPrice?