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Case Scenario MBB

A leading global electronics manufacturer is facing a decline in profitability in its smartphone division. The proposed solution involves clarifying the problem, structuring it using a profitability framework, analyzing revenue and costs, identifying root causes, and developing short-term and long-term recommendations. Key recommendations include optimizing the supply chain, adjusting pricing strategies, investing in product innovation, and exploring new markets.

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16 views

Case Scenario MBB

A leading global electronics manufacturer is facing a decline in profitability in its smartphone division. The proposed solution involves clarifying the problem, structuring it using a profitability framework, analyzing revenue and costs, identifying root causes, and developing short-term and long-term recommendations. Key recommendations include optimizing the supply chain, adjusting pricing strategies, investing in product innovation, and exploring new markets.

Uploaded by

ahmadyaseen3397125
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Scenario

Client: A leading global electronics manufacturer

Problem: The client has noticed a significant decline in the profitability of their smartphone division
over the past two years. They have asked for your help to identify the root causes and recommend
strategies to improve profitability.

Solution Approach

1. Clarify the Problem

• Ask Questions: Begin by asking clarifying questions to understand the scope of the
problem. For example:

• What specific metrics indicate a decline in profitability (e.g., revenue, costs,


margins)?

• Are there particular models or regions where the decline is more pronounced?

• Have there been any recent changes in the market or within the company?

2. Structure the Problem

• Framework: Use a profitability framework to break down the problem into its components:

• Revenue: Analyze factors affecting revenue, such as sales volume, pricing, and
product mix.

• Costs: Examine both fixed and variable costs, including production, marketing, and
distribution expenses.

3. Analyze the Data

• Revenue Analysis:

• Sales Volume: Investigate trends in sales volume. Are there any specific models
with declining sales?

• Pricing: Assess the pricing strategy. Has there been a price war with competitors?

• Product Mix: Evaluate the product portfolio. Are high-margin products


underperforming?

• Cost Analysis:

• Production Costs: Look into manufacturing costs. Are there inefficiencies or


increased raw material costs?

• Marketing Costs: Review marketing expenditures. Are they yielding the expected
return on investment?

• Distribution Costs: Analyze logistics and distribution expenses. Are there


opportunities to optimize the supply chain?
4. Identify Root Causes

• Internal Factors: Identify any internal issues, such as operational inefficiencies, poor
product design, or ineffective marketing strategies.

• External Factors: Consider external factors like increased competition, market saturation,
or changes in consumer preferences.

5. Develop Recommendations

• Short-term Strategies:

• Cost Reduction: Implement cost-saving measures, such as optimizing the supply


chain or renegotiating supplier contracts.

• Pricing Adjustments: Adjust pricing strategies to better compete in the market.

• Long-term Strategies:

• Product Innovation: Invest in research and development to create innovative


products that meet consumer needs.

• Market Expansion: Explore new markets or segments to increase sales volume.

• Brand Positioning: Strengthen brand positioning through targeted marketing


campaigns.

6. Communicate the Solution

• Presentation: Prepare a clear and concise presentation of your findings and


recommendations. Use data and visuals to support your points.

• Q&A: Be ready to answer questions and provide further insights into your analysis and
recommendations.

Example Solution

Client: Global Electronics Manufacturer

Problem: Decline in smartphone division profitability

Findings:

• Revenue Decline: Sales volume decreased by 15% due to increased competition and
market saturation.

• Cost Increase: Production costs rose by 10% due to higher raw material prices and
inefficiencies in the manufacturing process.

Recommendations:

• Short-term:

• Optimize supply chain to reduce production costs by 5%.


• Implement targeted pricing strategies to regain market share.

• Long-term:

• Invest in R&D to develop innovative smartphone features.

• Expand into emerging markets to increase sales volume.

By following this structured approach, you can effectively tackle complex business problems in an
MBB firm interview and demonstrate your problem-solving and analytical skills.

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