Profitability | Revenue decline | Moderate

Tractor Company – Interview Transcript

Our client is a major tractor manufacturer with nationwide presence. It is facing declining sales
and is unable to compete. You have been approached to find the problem.
OK, so I would like to understand that when we say decline in sales, does it mean decline in
overall revenues or # of units sold?
They are facing overall revenue decline
The key problem I need to focus on is finding the issue with declining revenues from tractor sales.
Is there any other objective I need to k eep in mind?
What promotional activities can you think of?
The promotional activities in this industry can be discounts, financing or increase in channel based
promotions. Is the competitor offering heavy discounts in the market?
No , it is the same. What can you think can be the issue with financing?
As we know that the tractors are mainly financed by different financing companies. Due to the
recent slowdown in financial sector including both banks and NBFCs, it may be possible that we are
not able to provide good financing deals to our customers as our competitor

No. Please go ahead Excellent point. But the current issue is r elated to increase in channel based promotion
Is this a nation-wide issue or should I focus on a particular market? Okay. Other channels for promotion can be the print media, bill boards, TV, radio and digital (SMS,
Focus on the West, where there is a major decline internet, etc) and the word of mouth publicity

What are the key product offerings and target market of the company? Is the company involved That is correct – the major issue was that our word of mouth publicity was less. Can you guess why?
in direct retailing?
Is there a negative branding about our company in the market?
There is only one type of tractor in the market. Please focus only on that for the rural market.
No nothing of that sort. Think about what the competition could do to enable word of mouth?
The company does i ndirect retailing through various distributors.
They can organize trade fairs to directly connect with the consumers – telling them about the
I would now like to deep dive into the problem. I would like to breakup revenue into 2
product and branding themselves.
components i.e. # of units sold and price per unit. Do we have any information if any of these 2
has declined. Correct. They did organize a trade fair in multiple villages, called people to get free test drives and
Our prices have remained constant but we have faced decline in the number of units sold. gave away prizes at the event. This was a part of the focused strategy to gain market in the West.
Thank you.
# of units can be affected by 2 components. Overall market size of the tractor and our captured
market share. Has whole tractor industry faced decline or our market share has declined.
Overall industry is not facing any decline. Our competitors have gained the market share.
Decline in our market share can be due to manufacturing issue leading to lower production,
distribution issue or customer demand issue. Do we know because of which reason we are facing
decline
We can manufacture even for a 50% increase in demand. Capacity is idle. Also, there has been no
change in ours or competitor’s distribution. We are facing shortage of demand from customers.
Ok. So we know that decline of the revenue is linked with decline of demand of our tractors by
the customers. To further deep dive the reason of decline in demand, I would like to explore 4
factors i.e. our product, places we are reaching out, price of our product and our promotion
strategy, all with respect to competitors. Also, I would like to k now a bit about our competitors.
This looks good. There are 3 main competitors. Sales of one player have increased alarmingly
while other have seen only a modest increase. The key issue is with the promotional activities.
Why would that be?
Has the competitor increased the promotional activity more than us?
Issue details and copyright

Casebook, Consult Club, 6/e

©2014 by Consult Club

All rights reserved.

Notice
No part of this publication may be reproduced or transmitted in any form or by any means  – electronic or mechanical,
including photocopy, recording or any information storage and retrieval system  – without permission in writing from the
Consult Club, IIM Ahmedabad.

First edition:
editi on: July 2014
Second edition: August 2015
Third edition: September 2016
Fourth edition: September 2017
Fifth edition: September 2018
Sixth edition: August 2019

2
 What is this year’
year’ss IIMA Casebook
Casebook all about?

Foreword
Building on the first 5 editions of IIMA Case Book, the Consult Club of IIM Ahmedabad
Ahmedabad is proud to present the 6th edition of
the IIMA Case Book. Leveraging feedback from alumni and the student community the Case Book aims to give the reader a
comprehensive
comprehensive view of the type of cases that form a major part
par t of consulting interviews. This Case Book brings an extensive
range of completely new cases and guestimates, along with a wide range of previous discussed and explored cases. Throughout
the Case Book, we have tried to ensure enhanced readability while retaining the comprehensiveness of the cases.

This document
document is organic
organically
ally built
built over
over many
many years
years through
through efforts
efforts of students
students engaging
engaging with global
global content.Whil
content.Whilee utmos
utmostt care
care
has been taken to keep the content unique, a lot of problems look similar
similar to each other. Similarly,
Similarly, the frameworks look
look
essentially similar for most people. Any resemblance of a case here to any problem elsewhere is pure coincidental and
regretted. Kindly let Consult Club, IIMA know (message us on LinkedIn) in such a situation.

Therefore,
Therefore, we
we have a heartfelt
hear tfelt gratitude for stalwarts of the field like Victor Cheng and all casebook writers and compilers
before us everywhere in the world. We are putting this Casebook in public domain hoping that this fuels creativity and brings
the reader one step closer to their goals.

How to make the most of it?

While reading this Case Book, we would suggest the reader should use the interview transcripts to set up a case between 2
people (or groups), and after solving the case, the solution process sheet should be looked into to gain a broader understanding
of the approach and areas of improvement.

The frameworks are there to give a direction initially

initially to new case-solvers and should not be treated as a fixed boundary,
boundary, but
could be utilized by the reader to cover any case which comes up their way according to their own logical structure. Also, the
reader should leverage the recommendations, tips, and suggestions to apply learnings from one case to another.

Remember, journey is as important as the destination. Case preparation is a group exercise with individual self-preparation as
well.

Enjoy the process of preparation and let’s crack the case!

-Aaditya Agarwal (Coordinator, Consult Club, 2019-20)

Acknowledgements

We are grateful to all the people that have helped by sharing their cases and interview experiences, that has enable us to put
together a comprehensive preparation resource for the future batches.

We would like to thank Aditya Daga, Arpit Lahoty, Chhavi Gupta and Sankalp Agarwal (PGP 2018-20) for leading the Case Book 
initiative and putting together this edition of the IIMA Case Book. We would also like to acknowledge the efforts of Kannan
Adlakha, Kshitij Jain, Shubham Agrawal, Vineet Mall and Yash Goyal (PGP 2019-21) for helping the Club put together this case
book.They have ensured breadth and depth in the cases to give the reader a comprehensive view of the kind of cases they may
be administered.

We are also grateful to the alumni of the Consult Club, IIM Ahmedabad for their feedback on the cases which has helped us
further enhance the overall quality of the book. We would also like to extend a special acknowledgement to the contributors of 
the previous editions of the IIMA Case Book.

Copyright © 2014
Consult Club, IIM Ahmedabad
Vastrapur, Ahmedabad 380015
Table of contents (1/2)
Particulars Difficulty Page
level

Structure of case interview, approach 7

Cases 10

A. Profitability 11

Overview / Framework  12

1. Beer manufacturer (Cost reduction) Easy 14

2. Retail bank (Cost reduction) Moderate 16

3. Lease fee (Cost reduction) Moderate 18

4. Cement company (Cost reduction) Moderate 20

5. Auto insurance (Cost reduction) Moderate 22

6. Banking (Cost reduction) Challenging 24

7. Telecom billing process (Cost reduction) Challenging 26

8. Oncology firm (Revenue decline) Easy 28

9. Urea manufacturer (Revenue decline) Easy 30

10. Oil distributor (Revenue decline) Moderate 32

11. Washing machine firm (Revenue decline) Moderate 34

12. Tractor company (Revenue decline) Moderate 36

13. Fishing company (Revenue decline) Moderate 38

14. Banking (Revenue decline) Moderate 40

15. Alcohol company (Revenue decline) Challenging 42

16. Airline operator Moderate 44

17. Spicejet vs Indigo Challenging 46

B. Pricing 48

Overview / Framework