case prep

profit formula

• Profit = Revenue - costs 

revenue formula

• Revenue = Quantity * Price 

profit formula

• PROFIT = (PRICE - VARIABLE COSTS) * (QUANTITY - FIXED)

profitability

why company is experiencing decline and what they should do to address it 

1. Understand what is the driving causing the decline in profits 

   1. Is the decline driven by decline in revenue or increase in costs or both 

market entry

1. Whether a company should enter a new market

   1. Whether market is attractive, how many potential customers there are and how much they spend 

   2. How strong competitors are 

   3. Whether your company has capabilities to enter 

   4. What the expected profitability is 

growth case

1. Should the company grow organically by targeting new geographies or customers?

   1. Organic = existing revenue sources, new revenue sources

   2. To increases quantity of units sold company can: improve product, decrease prices, sell through new distribution channels, target new customers, expand into new geographies, and invest more in marketing and sales  

2. Should they launch new products/services? 

3. Should company grow inorganicallly by acquiring or partnering with another 

4. Understand why growth has stalled, then look at: acquiring customers, increases engagement, and expanding product/market

pricing case

1. How much does the product cost to produce?

2. How much are customers willing to pay for a product?

3. How much are competitors setting prices for similar products? 

merger and acquisition

1. Reason for acquisition 

2. Is the market attractive?

3. Is Acquistion target itself attractive?