FOOD

WHOLESALING
CASE
CASE 1
Our client is an established
food wholesaler that is trying to
increase profitability.

 The situation is that our client is a

wholesaler of a variety of different
food items.
 The client has a steady stream of business
and is already profitable, but is looking
to unlock more profitability from its
existing lines of business.
 The question is –
How can they best increase
profitability from their existing
business?
 Answer 1

 Increasing the sales of products which have better margin over others .
 Increasing the customer base as it is high end and low end restaurants , we can increase sale to
Airlines , Railways and also can go to local retailers .

 Increasing product price can also increase profitability but it has some other factors to look into.
 In food business , location plays important role try to increase the sales of products to the area which
are inclined to that products.
 Reducing or optimizing the production cost in to get maximum margin
 Different and new marketing campaigns to increase customer base
 Optimization of cost other than production which includes promotion through different channels ,
transportation , sales-force .

Data and insights Required :-

 Cost breakdown of different products which have lower margin .
 Ask for data of expenditure involves in marketing through different channels with their respective
sale volume to optimize accordingly .
The client is leader in an
established, mature industry
 Industry Characteristics/Market Economics
• Growing at the rate of GDP
• Significant barriers to entry
o no new competitors have entered the market in the last
several years
 Client Characteristics
• Client is currently the industry market share
leader
• Margins are good, but depend on product line
• Offers a range of high-end and low-end food
products
• Consumers are high and low-end hotels and
restaurants
 Competitive Dynamics
• The dynamics (duopoly vs. fragmented industry)
depend on the
• region, but there are key competitors in each
region
The client’s position in the year 2000 was that its
sales came from Asia, Europe, and North America

1. What observations can be made from this graph?

2. What would you expect to happen in three years?
Answer 1
 North America is favorable market for client where it more than 50% of market share .
 In Asia ,we need to work more on this as share volume and client share both are on lower side .
 In Europe , there is scope of improvement which also depends on external factors.
Answer 2
There can be multiple scenario that can happen inn next three year .
 Case 1 :- In North America our client capture some of the market share of other competitors .
 Case 2 :- Europe share volume may increased and there is also scope of increment in market share .
 Case 3:- In Asia , we cant predict ,what is going to happen in next 3 years , as its market share is on lower side and
we also don’t have any data to predict it . If client was introduced in ASIA inn last , so with proper marketing and
sales force we improve the market share and share volume .

Data and insights required

 Data regarding entries in different area .
 Product –Wise sales (To improve sales on the basis of location )
The client’s position in the year 2000 is
now shown
side-by-side with its 2003 position

1. What has happened in the past three

years? Why?
2. What are the implications for price-
cost margins?
Answer 1
 Comp1 is more or less holds same market share But
the market for client is effected.
 Share of sales are also changed in Asia and Europe
majorly . Reasons may be new marketing campaign
or policies (Not defined)
It turns out demand elasticity and gross margin
have the inverse linear relationship that we would
expect

1. What observations can you make from

this graph?
2. What should the clients new strategy be
in each of the four graph quadrants?