The 11 case scenarios

By Aleksandr Yampolskiy

Do we enter a new market?

CURRENT MARKET

ENTERING

MAJOR PLAYERS AND MARKET SHARE

PRODUCT DIFFERENTIATION

BARRIERS TO ENTRY

NO

IF YES, HOW?

START FROM SCRATCH

ACQUISITION

JOINT VENTURE

COST-BENEFIT ANALYSIS OF EACH

Example: Your client manufactures hair products. It’s thinking about entering the sunscreen market. Is this a good idea?

Mergers & acquisitions

Example: Ben & Jerry’s is buying a mid-size cream cheese manufacture. Does this make sense?

FOR HOW LONG?

BREAK OR KEEP IT?

EXITSTRATEGIES

LEGALREASONS

COMPETITORS

MARKET / INDUSTRY /

CUSTOMERS

INFORMATION

FAIR?

AFFORDABLE?

HOW TO PAY?

DIVERSIFY HOLDINGS

INCREASE MARKET ACCESS

PRE-EMPT COMPETI-

TORS

GOALS

PRICE

SYNERGIES (MARKETING, FINANCIAL,

OPERATIONS)

Reducing costs

BREAKDOWN OF COSTS

ANY COSTS OUT OF LINE?

BENCHMARK COMPETITORS

INVESTIGATE WHY

YES

NODETERMINE

LABOR-SAVING TECHNOLOGIES

INTERNAL/EX-TERNAL COSTS

Example:

1) A publishing company is having a cash flow problem and needs to reduce its costs, otherwise it will have to layoff staff. How should the company proceed?

2) Walmart’s sales are flat and profits are taking a header. How to fix things?

Increasing sales

Example: BBB electronics want to increase its sales. What to do?

GROWTH RELATIVE TO INDUSTRY

MARKET SHARE UP/DOWN?

CUSTOMER SURVEY

INCREASE VOLUME

INCREASE AMOUNT

INCREASE PRICES

SEASONAL BALANCE

ACTION

COMPETITORS

SALES↑ but not PROFITS↑

INFORMATION

Increasing bottom line

Example: Our client manufactures high-end athletic footwear. Sales are up, but profits are flat. What do we need to look at?

PROFIT = (REVENUES - COSTS)×VOLUME

COSTS

REVENUE STREAMS (%)

% CHANGES / UNUSUAL?

REVENUE /PRICE

FIXED / VARIABLE

SHIFTS / UNUSUAL?

HOW TO REDUCE?

NEW AREAS

SALES / MARKETING ↑

VOLUME

PRICES↓

Turnaround

Example: CitiGroup is in trouble and you’ve been brought to save it. What do you do?

COMPANY / INDUSTRY

COMPETITORS FACE SAME PROBLEMS?

WHY IS IT FAILING?INFORMATION

CAPITAL

PRODUCTS

MANAGEMENT

ECONOMY

BAD

REVIEW EMPLOYEES &

PRODUCTS

SECURE FINANCING

BUSINESS PLAN

SHORT

LONG

TAKE ACTION

REASSURE CLIENTS

GOALS

Competitive response

Example: FootLocker introduced a new non-slip sailing shoe that has been eating into the sales of our bestseller. How can we respond?

PRODUCT DIFFERENTIATION

ANY OTHERS PICKED MARKET SHARE?

MERGER

ACQUISITION

COPY AMAZON.COM VS BLOCKBUSTER

COST-BENEFIT ANALYSIS OF EACH

MARKETING CAMPAIGN

HIRE MANAGEMENT

RESPONSE

INFORMATION

Develop new product

Example: Our client has developed a new biodegradable product, which is both a soft drink and a car wax. What should they be thinking about?

MARKET STRATEGY

PRODUCT CUSTOMERS

FINANCING

Pricing strategies

Example: Our client developed a new Hollywood screenwriting software package. How should we price it?

PRICE OF SIMILAR PRODUCTS?

PRODUCT DIFFERENTIATION

MARKET SIZE

COST-BASED VS. PRICE-BASED

MARKET PRICE

COST TO MAKE

SUPPLY & DEMAND (*)

PRICING STRATEGY

GROWTH PHASE? (GROWTH/TRANSITION/MATURITY)

PRODUCTINFORMATION

Growth strategies

Example: Microsoft Corporation has a high cash reserve. How can we best use that money to grow the company?

INDUSTRY GROWING? ARE WE?

FUNDING?

WHAT DID COMPETITORS DO?

DISTRIBUTION CHANNELS ↑

PRODUCT LINE ↑

MARKETING ↑

DIVERSIFY PRODUCTS

GROWTHSTRATEGY

FEELER QUESTIONS

MERGER

Starting new business

Example: Should I start a travel magazine?

ENTERNEW MARKET?

NO

YES

BARRIERS TO ENTRY

MARKET & STRATEGIC PLAN

DISTRIBUTION CHANNELS

PRODUCT

CUSTOMERS

MANAGEMENT

WOULD VCs INVEST IN

COMPANY?

FINANCE

Five C’s and Four P’s

Five C’s:• Company• Costs• Competition• Consumer• Channels

Four P’s:• Product• Price• Place• Promotions