PU-BHCG TRAINING

Week 1: PROFITABILITY

Profitability cases are important because they get to the root of a business's success or
downfall; they focus on how much money is made after accounting for costs to run the
business. Understanding the components that go into calculating profitability is a crucial
first step to cracking these cases and showing your business acumen during interviews.

Instructions:

We have provided two solved cases below to enhance your understanding. After these,
there is a case question to be solved as this week's task. Your solution should be a ppt
with a maximum of 6 slides. The use of visual cues is encouraged to present your
solution in a more meaningful manner.

The team leader will have to submit the solution in the google form mentioned in
the mail. Multiple submissions from teammates will not be accepted.
Please name your file as “<Team Leader name>_Week1”.

The deadline for submission is 30th November 11:59 PM. Entries after this time
will not be accepted.

The training resources have been uploaded in the Training Group 2022; use the same
to attempt the case in a well-prepared manner.

Apart from that,, below is the drive link for Udemy - Management Consulting Training
Essentials which can be utilizedas a reference.
https://drive.google.com/drive/folders/1fDdgR4m-cWNxKaAE2RcN82vBWrs2XsbX?us
p=sharing

Please use this competition to strengthen your concepts and practice regularly. All the
best!

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Practice case-1: FashionCo. | Bain & Company

Practice case-2:

Question: Our client is a beer manufacturing company that operates in India.

The cost structure for the company is poor compared to the international
benchmarks, and the client has asked you to find out why.

Solution:

Notes made by the interviewee are,

● Qualitative case, no numbers provided

● A single cost head case where one issue needs to be identified cost problem
is identified to be in processing
● Either the client cannot invest capital, or there are logistical issues concerning
getting advanced machines.

We will note down facts about the client,

● The client is a beer manufacturing company with multiple products

● It is facing cost issues with more than one beer product
● This is not a industry-wide problem Client has three plants with 30000 bottles
capacity working at 100% utilization
● Advanced machines cost 1.5 times the normal ones and produce twice as much.

We will look at cost in this case approach; there can be many factors affecting cost
such as R&D, Raw material, Processing, Storage and transportation, Distribution-sales
force, Marketing, etc.

This case mainly deals in Processing, which can be branched into machinery and labor.

We found out that the client has a problem with capital utilization, which includes the
purchase of advanced machinery and increasing the number of machines. For
purchasing advanced machines, clients can have two hurdles, a shortage of capital
and logistical issues. It’s found that Logistical issues were the cause of the problem.

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Some recommendations for candidates are:

● The candidate should give a combination of short term and long-term

recommendations.
● In the short term, the shifts can be increased from 2 to 3 to increase the
capacity of the plant.
● In the long run, the client should aim to buy larger plants compared to the
existing plant to accommodate high-capacity machines.

Question for the Week

1. Your client is a suitcase and trolly bag manufacturing company in India. They
have observed that their revenues have been decreasing off late. Suggest
measures to the client to increase their revenue back again.

Few details about the client:

● The company operates in India with 4 plants in North, East, South and West.The
company has a 30% market share.
● All plants were closed in lockdown and worked at 35% production capacity during
the 2nd wave. Recently, the plants have started working at full capacity post 2nd
wave.
● They have observed the decline in revenue during the past 6 months.
● The company recently got into legal troubles due to copyright infringement case
on it but was given a clean chit a month ago.

You can assume necessary data to suggest measures to tackle this issue with relevant
explanation.

Instructions to submit the solutions are given at the beginning of the document.
Please follow them sincerely.