IIM Ranchi Consulting Casebook 2022 .pdf

Consulting guide

1. Conundrum
IIM Ranchi Consulting Club
2022-23
CONSULTING
CASE BOOK

2. Foreword
The interview experiences of students of IIM Ranchi is documented in this casebook. The objective of sharing the
case interview experiences of previous batches is to help and support students in their placement preparation.
There are different ways to approach a given case and the experiences listed can only give the students an idea of
how to approach and what is expected. Using this, the students can come up with their own solutions. Each of the
cases in this book has contributions from students of IIM Ranchi. The experiences are sorted based on the type of
case. Thanks to all the contributors.
Students can go through the interview transcripts first and can use groups for discussion. Then after solving the
case, students can look at the solution to get a broader understanding and summarization of the approach, along
with the framework.
Conundrum wishes you the very best for your placements!

3. Conundrum I IIM Ranchi
Contents
S.No Particulars Page
I Market Entry Framework 1
1. Automobile Manufacturer 3
2. EdTech Company 5
3. Insurance Company 7
4. Fintech Company 9
5. Pharmaceutical Company 12
II Pricing Framework 14
1. Apartments in a Tier 2 City 16
2. New Medicine Launch 18
3. Spacewalk 20
4. EV Car Launch in India 22
III Profitability Framework 24
1. IT Firm 26
2. Retail Bank 28
3. Electricity Generation Company 30
4. Print Media 32
IV Market Growth Framework 34
1. Restaurant Chain 36
2. Automotive Battery Manufacturer 38
3. OTT Platform 40
4. Coffee Producer 42
5. Ecommerce Platform 44
6. Garment Manufacturer 46

4. MARKET ENTRY
FRAMEWORK
CONSULTING CASE BOOK

5. MarketEntryFramework
2
Market Entry
How to enterIndustry AnalysisMarket PotentialObjective
Growth
Market Size
Market Share
Overview
Competition
Regulatory Barriers
Segment/Product
Choice
Organic or Inorganic
Conundrum I IIM Ranchi

6. AutomobileManufacturer–InterviewTranscript
MarketEntry
Yourclientisaglobalcarmanufacturer,basedintheUSA.Thefirmwantstoenter
themotorcyclemarketinIndia.Whatarethefactorstoconsiderandhowto
implementtheoperation?
BeforeIstart,IwanttoknowiftheclienthascaroperationsorsalesinIndia.
Noneedtogetintonumbers.Okay,justmentiontheapproach.
Now,let’sanalysethesituationintwoparts–1.Marketand2.Operations.In
Market,let’sanalyse1.Industry,2.MarketPotentialand3.Sales.InOperations,
let’slookatmanufacturinganddistributionchannels.
Yes,thecompanydoessellpremiercarsinIndia.Andtherearemanufacturing
plantstoo.
Gotit.IwouldalsoliketoknowwhytheclienthaschosenIndiaandwhy
motorcycles.
Thecompanyisanestablishedplayerinthecarmarket.Now,thecompanywantsto
diversifyintomotorcycles.AstochoosingIndia,youtellme.
IndiaisthebiggestmotorcyclemarketintheworldandrecentlysurpassedChina.
Exactly.
Doesthecompanyhaveanysegmentofmotorcyclesinmind–commute,sporting,
orclassic?Andwhatisthepricerangethecompanyistargeting?
Goodquestions.Theclienthasn’tdecidedonthatyetandwantsyour
recommendation.
Sure.Myrecommendationistogowithclassicmotorcycles.RoyalEnfieldhasbeen
themarketleaderinthissegmentforsomanyyears,inIndia.However,inrecent
years,thenumberofplayersinthemarkethasincreased.Thisistothelikingof
customersasnowtheyhavemoreoptions.So,thereisalotofgrowthpotential.
Besides,themarketisalmostmatureinthesportsandcommutesegment.
Okay.What’snext?
InIndustry,IwouldliketousePESTELanalysistounderstandtheindustryfrom
variousperspectives.Thiswillgiveacomprehensiveview.Andnext,tounderstand
thecompetitionandbarriers,wecanusePorter’s5forces.UnderMarketPotential,
we’vealreadyestablishedthatthegrowthpotentialisgoodforclassicmotorcycles.
Formarketsize,wouldyoulikemetodoaguesstimate?
Iwouldstartwiththecountry’spopulation,andthendivideitintourban,semi-
urbanandrural.Then,Iwillfurthersplitbasedonincomerange.Sinceourclientis
apremiercarmanufacturerandalsotheclassicmotorcyclesarealittlepricy,we
willtargetuppermiddle-classandaboveincomesegments.Andfinally,wecanlook
attheexistingbrands’datatoestimatetheaveragefrequencyofpurchaseinthe
segment.Thiswillhelpmeincalculatingthepotentialmarketsize.
Good.Then?
Comingtosales,thecompanycanleveragetheirpopularityandsuccessinthe4-
wheelerssegmenthere.Now,inoperations,theclientshouldsetupplantsinIndia
sincetheyarelaunchingmotorcyclesforthefirsttime.Forthat,thefirststepis
findingsuitablelocationsandacquiringtheland.
Fine.Now,let’slookatdistributionchannels.
Wecanusethedistributionchannelsusedfortheircars.Intheshowroomsand
dealerships,alongwiththeclient’scars,themotorcyclescanalsobesold.Asthe
businessanddemandcatchup,wewillsetupseparateshowroomsforthe
motorcycles.
Great.Ithinkwe’vecoveredthefactorsthoroughly.Thankyou.
Conundrum I IIM Ranchi 3

7. AutomobileManufacturer
MarketEntry
Case facts/ Notes
•Client is a global car
manufacturer, sells in
India too
•Premier cars
•Enter into classic
motorcycles market
•Target customers
starting from income
range of upper-middle
class
Problem Statement
•Client is a car manufacturer wanting to enter the motorcycle market
•Client wants to establish the operations
Recommendations:
•TheclientshouldenterthemotorcyclemarketinIndia,andleveragetheclient’s
brandpopularityanddistributionnetwork.
Motorcycle Market EntryStrategy/Framework
Market Operations
•First,thinkwidelyandthengodeeperintoafewfactors.
•Considertheclient’sadvantagesanddisadvantagesfromtheircurrent
businessthatcanapplyhere.
Key Takeaways:
Industry Market Potential
PESTEL
Analysis
Porter’s Five
Forces
Growth
Market Size
Market Share
Sales
Set up Plants
Distribution
Property
Acquisition
Use Car
Showrooms and
Dealerships
Conundrum I IIM Ranchi 4

8. EdTechCompany–InterviewTranscript
MarketEntry
YourclientisanEdTechcompanyinIndia.ThefirmwantstoentertheJamaica
market.Youhavebeenhiredtofindoutifthebusinessmodel,pricingatwhichthey
canentertheJamaicamarket–andifso,whatshouldbetheotherfactors.
Canyoupleasetellmemoreabouttheclient?Whatistheclient’smarketsharein
India?
TheclientisamongthetopplayersinIndia,similartoBYJU’S.Theyofferservicesto
multiplesegments–school,college,entrancetests,etc.
Gotit.NowIwanttoknowabouttheEdTechscenarioinJamaica.Howarethe
industryandthecompetition?
EdTechhasn’tfounditswaywellintoJamaica.Currently,therearen’tanyplayers
whoofferdifferentservices.
Okay.Thereisawindowforourclienttocapturethismarket.Whataretheservices
ortargetsegmentstheclientisplanningtotakeon–school,college,test
preparationandupskilling?
Provideyourrecommendation.
Sure.Theclientshouldtargetallthesesegments.Because,asitwasmentioned,
JamaicadoesnothaveanEdTechproviderwhichoffersacomprehensivesetof
services,andourclientcansolvethatproblem.
Fairenough.Analysethemarketpotential.
Themarketsizecanberoughlyestimatedusingdatafrommultipleexistingplayers.
ThegrowthpotentialforEdTechishighinanypartoftheworldnow.Particularly,
Jamaicahasaverygoodliteracyrate.
Thatcoverstheanalysisofthemarket.Whatotheraspectsarepending?
Idividetheremainingaspectsintotwocategories.1.Modeland2.Staffing.In
Model,wehaveTechnology/Platform,CourseDesignandBusinessModel.In
Staffing,wehavehiringandtraining.
ThecompanycanleverageitstechnologyfromitsservicesinIndia,tooffera
comprehensivesetofofferings,inbothwebaswellasmobileapplications.Also,
special-purposetabletscanbeofferedalongwiththecourses.Forcoursedesign
andstructure,weneedtoanalyzeandunderstandtheJamaicaneducationsystem
thoroughly.
ThenthereisawholesetofIToperationstodesign,developandmaintainthe
platform.Forthis,mysuggestionistouseITresourcesfromIndia,asthetalentand
skillsinIndiaaremuchhigher.
Good.Whatnext?
Thebusinessmodelwilladoptafreemium-typesubscription,whichisthemost
commonmodelintheindustry.Thepricingcanbeverycompetitive,giventhatour
clientcanstraightawayhaveanedgeintermsofeconomiesofscale.
Yes,freemiumistheonlywaytogo.Nowlet’sgetontostaffing.
Wehavetwooptions.Oneis,tohirenativeteachers.Theotheroptionistohire
fromIndia.NativeteacherswillbefamiliarwiththeeducationsysteminJamaica.I
recommendgoingwithnativeteachersforamajorproportion.TeachersfromIndia
shouldbehiredbecausetheypossessexperienceandskillsincertainareasliketest
preparation.Thencomestrainingthestaffaboutthecourseandplatform.
Alright,thatsoundsfair.Letusclosethecasehere.
Conundrum I IIM Ranchi 5

9. EdTechCompany
MarketEntry
Case facts/ Notes
•Client is one of the
leaders in the Indian
EdTech scene
•Target multiple
segments and provide
different offerings
•Leverage IT from existing
operations
Problem Statement
•Client is an EdTech company in India wanting to enter Jamaica
•Client sees an opportunity to capture the Jamaican EdTech market
Recommendations:
•TheclienthasagreatopportunitytobecomethemarketleaderintheJamaican
EdTechindustry.
EdTech Market EntryStrategy/Framework
Market Model
•Considermultipleaspectssuchasmarket,servicedelivery,staff,etc.
•Importanttoformaframeworkandsticktoit.
Key Takeaways:
Services
Growth Potential
Market Size
Technology
Course/Service
Structure
Pricing
Staffing
Technology
Native/Indian
Teachers
Training
Conundrum I IIM Ranchi 6

10. InsuranceCompany–InterviewTranscript
MarketEntry
YourclientisaninsurancecompanybasedintheUK.Thefirmwantstoenterthe
Indianmarket.Providerecommendationsonwhethertoenterandwhichsegments
toenter.
IwouldliketounderstandthegoalofthefirminenteringtheIndianmarket.Is
thereanyspecificreason?
Thecompanyisonamissiontoexpanditselfglobally.Andwiththeamountof
populationinIndia,themarketgrowthpotentialisexpectedtobehigh.
Isee.MayIknowwhatinsuranceservicesourclientprovides?
Thecompanymajorlyprovideshealthinsurance.However,theyalsoprovideother
insuranceservicestoo.Theclienthasrecentlyenteredthecorporateinsurance
segment.
Okay.Now,whichsegmentsaretheyplanningtoenterinIndia?Aretheygoingto
leveragetheirexpertiseinhealthinsurance?
Theywanttoevaluatetheavailableoptions.What’syourapproach?
Myapproachistofirstevaluatethereturnsandprofitability.Then,tolookatany
barrierstoentrysuchasregulationsandcompetitions.Andlastly,Iwillevaluate
marketpotential.
Tounderstandreturns,weneedtoestablishtherevenuemodelfortheindustry.
Thisisdependentontheprobabilityofclaims,basedonexistingdata.Average
claimsvalueasapercentageoftheamountinsuredcanalsobecalculated.
Multiplyingthesetwonumberswillgivetheaverageclaimsamountperpolicy.
Claimsamountperpolicy=Probabilityofclaimsevent*Averageclaimsamountas
apercentageoftheinsuredamount
Wecanevaluateifthemarketcomparablepremiumisprofitable,giventhe
calculatedclaimsamount.
Fine.Whatnext?
Now,let’slookatthebarrierstoentry.Sincethisisafinancialservice,theclient
shouldobtainallapplicableclearances.Apartfromthat,arethereanyparticular
regulationthatweshouldfocuson?
No.Therearenosuchregulations.
Alright.Nowlet’sdiveintothemarketsegments.Doestheclienthaveapreference
onwhichsegmenttoenter?
Canyoumentionthemajorsegmentsandproviderecommendations?
Sure.ThemajorsegmentsofInsuranceinIndiaare–healthinsurance,term
insuranceandproperty&casualtyinsurance.ThemostcommonserviceinP&C
insuranceisautoinsurance.InIndia,LICisahugeplayerwhichspecializesinhealth
andlife(term)insurance.
MyrecommendationistoventureintoAutoInsurance.Because,first,the
automotiveindustryinIndiaisalwaysgrowing.Andthereisagovernmentmandate
tohaveautoinsuranceforeveryvehicle.Thepossiblelossesarefromaccidents.
Alright.Whataretheotherfactorstoanalysethissegment?
Marketsizeandexpectedmarketsharecanbeestimated.Marketsizecanbe
calculatedbytakingthetotalpopulation,andthenbifurcatingitintourbanand
rural.Further,wecanclassifybasedonincomelevelandusethistofindoutthe
averagenumberofvehiclespresentinhouseholdsfromdifferentincomegroups.
Forexpectedmarketshare,wecanconsidertheperformanceofrecentnew
entrantsinthesegmentandadjustthenumbers.
Thanks.Thatwouldbeall.
Conundrum I IIM Ranchi 7

11. InsuranceCompany
MarketEntry
Case facts/ Notes
•Client is on a mission to
expand globally
•Client provides multiple
services in the UK,
majorly in health
insurance
•Determine the returns
based on premiums and
average claims amount
Problem Statement
•Client is an insurance company in UK wanting to enter India
•Client wants to evaluate different segments.
Recommendations:
•Theclientcantargetautoinsurancebecauseofthegrowthofautoindustry.
Insurance Market EntryStrategy/Framework
Returns Barriers
•Itisbestnottodwellonunknownsegmentsininsuranceandgodeepintothe
knownsegments.
•Beconcisewiththesuggestionsandalwaysclearwiththeintervieweronany
assumptions.
Key Takeaways:
Claims
Premium
Technology
Course/Service
Structure
Pricing
Technology
Market
Market Size
Market Share
Segments Auto
Conundrum I IIM Ranchi 8

12. FintechCompany–InterviewTranscript
MarketEntry
YourclientisanE-commercefirmbasedinIndia.Thefirmwantstoventureintothe
fintechmarketinIndiaandwantsyourrecommendation.
Iwouldliketoknowthefirm’sobjectivebehindthis.Also,isthereanydecision
metricyouhaveinmindtoassessperformance,likerevenueorROI?
Thecompanywantstomaximizeitsrevenue.Thereisnospecifictargetbutwould
wanttogetmaximumROIinthenext3years.
Gotit.Canyouelaborateonthecompany’spositionintheIndianmarket?
Thecompanyisoneoftheearlyplayersine-commerceinthecountry.Theydonot
haveaglobalmarketasyet.However,inIndia,theirmarketshareisaround30%,
whichisamongthetop3.TheyarevaluedatRs.15billion.
Iunderstandthecompanyhasgoodleverageinthemarket.Comingtoverticals,
whatkindofproducts/servicesdoesthecompanyhaveinmind?Isitawalletand
UPIpaymentapplikePhonePeoranythingelse?
Wehavethese3verticalsinmind–AUPIpayment/walletapplication,an
investmentplatformandinsuranceservices.Evaluatethesechoices.
Sure.Now,Iwouldconsiderthepaymentwalletfirst.Because,sincethefirmisine-
commerce,theycanmoreeasilyaddthepaymentwalletfeaturetotheirwebsite
andapplication,comparedtotheothertwooptions.Theothertwooptionscannot
leveragethemarketshareine-commerceaseffectively.Soinitialcustomer
acquisitionwillbetakencareof,withtheUPIpayment/walletapplication.
OurexpectedrevenuecanbeseenasMarketsize*Marketshare.Formarketsize,
wecanusethedatafromtheexistingUPI/walletinIndia,likePhonePe.Wecanuse
thiscalculation:
Marketsize=No.ofcustomers*No.oftransactionspercustomer*Valueper
transaction
Weshouldchoosethedemographicbasedonpopulation,ageandinternetand
mobilephoneusage.
Butourrevenueisonlyapercentageofthis,fromthecommissions.
Fine.Let’ssaythemarketsizeisattractiveenoughtoproceed.Then?
Fortargetmarketshare,wecanconsiderasimilarproductinthemarket,like
AmazonPayintheinitial2years.
Let’ssaythemarketshareisalsogoodenoughtoproceed.Whatnext?
Wecanusethefollowingcriteriatoanalysethesolution–1.Opportunity,2.
Feasibility.UnderOpportunity,welookatmarketsizeandmarketshare.In
Feasibility,welookatpotentialrisksandbarriers.
Excellentpoint.ThereisaregulationthatsaysanIndianbankmusthavea
controllingstakeintheventure.
Isuggestwecouldeitherpartnerupwithabankoracquireabank.Ofthesetwo
options,partneringupwithabankseemstobethemostviableone,asacquiringa
bankisamuchcostlieraffair.Also,thebankcanbenefitfromtheassociationinthe
formofourexpertiseinthemarket.Good.Whatnext?
ThatmarkstheendoftheanalysisofOpportunity.Nowlet’slookatFeasibility.First
thingistolookatpossiblerisksorbarriers.Isthereanyregulatorybarrier,sinceitis
afinanceventure?
Ajointventurewithabankistherightwaytogo.What’spending?
Conundrum I IIM Ranchi 9

13. TheUPIPayment/Walletplatformandthecustomeracquisitionarepending.
Creatingagreatplatformisnotaproblem,giventhatweareoneofthetop3
playersine-commerceinIndia.
Nowforcustomeracquisition,therearetwoparts.Firstisbringinginmerchants.
Further,therearetwoparts:existingmerchantsine-commerceandnew
merchants.Theexistingmerchantscanbetheinitialusers,whocanspreadthe
wordabouttheoffering.Newmerchantscanbeattractedbyprovidingzero-
commissionschemesforinitialfewdays.Thiswillattractsmallvendorstoo.
Okay.Forgeneralcustomers?
Foracquiringgeneralcustomers,wecantargetcustomersofthee-commerce
service,byofferingcashback,discounts,etc.
Withallthis,weshouldalsoheavilyfocusonsecurity,asitisthemostimportant
featureinafintechsolution.
Ithinkwehavecoveredalmosteverything.Wecanstophere.Thatwasgood.
Conundrum I IIM Ranchi 10
FintechCompany–InterviewTranscript

14. MarketEntry
Case facts/ Notes
•30% Market share,
among the top 3 firms in
e-commerce.
•Understand the verticals
and business model
•Use comparable from
similar products in the
market
•Cover the value chain
•Identify barriers to entry
Problem Statement
•Client is an e-commerce firm wanting to enter the fintech market.
•To recommend an action plan.
Recommendations:
•Theclientshouldventureintothefintechmarket
Fintech Market EntryStrategy/Framework
Opportunity Analysis Feasibility Analysis
•Becomprehensivewiththeanalysis,coveringtheentirevaluechain
•Usemarketcomparablefromsimilarproducts
Key Takeaways:
Market Size Market Share
Use data from current UPI/wallet apps in India
Market size = No. of customers * No. of transactions
per customer * Value per transaction
Segmentation: population, age and internet and
mobile phone usage
Regulations
Joint Venture
Acquisition
Local Ownership
Application
Platform
Leverage e-commerce success
Acquiring
Merchants and
General
Customers
Acquiring Existing
Acquiring New
Conundrum I IIM Ranchi 11
FintechCompany

15. PharmaceuticalCompany–InterviewTranscript
MarketEntry
Yourclientisaglobalpharmaceuticalcompany.ThefirmwantstoentertheIndian
marketandisseekingyouradvice.
Canyoupleasetellmemoreaboutthecompany?Whatproductsdotheysell?Is
thereanyparticularareaoffocus?
Thecompanyshouldevaluateonthesefactors:1.MarketPotential,2.Regulatory
Barriers,3.Operations.
Inmarketpotential,let’sanalysemarketsizeandshare.Marketsizecanbe
estimatedusinghistoricaldatainthiscalculation:
Population(Age22+)*Probabilityofbeingdiagnosedwithdiabetes/hypertension*
Averagedoseperday
Ourclientsellsgeneraldrugsforday-to-dayailmentslikefever,headache,common
coldandindigestion.Theyareoneofthehouseholdnamesacrossmanycountries.
TheywanttoventureintotheIndianmarketnow.
Isee.Couldyoupleaseexplainabouttheircompetitionindifferentgeographies?
Thecompanyhasamarketshareofroughly30%ingeneraldrugs,onaverageinthe
countriestheyoperate.Theindustryhasfewplayerswithmarketsharessimilarto
this.
Gotit.Now,isthecompanyplanningtofocusonday-to-dayailmentsgeneraldrugs
inIndia,ordotheyhavesomethingelseinmind?
PrimarilytheywanttoentertheIndianmarket.Thecompanywouldliketoexpand
thesegmentsifneeded.What’syoursuggestion?
Enteringthegeneraldrugssegmentwillbechallenging.Becauseofthenatureof
theindustry,peoplewanttoconsumemedicinesofknownnamesonly.Itishardto
replacetheestablisheddrugsinthissegment.
But,ifweenterspecialitydrugs,theconceptofhouseholdnamesdiminishes.So,
myrecommendationistostartbymanufacturingmedicinesforsomeprevalent
diseasesinthecountry.
Goodpoint.Pleasespecifywhichdiseasesorconditionsourclientcanpreparethe
medicinesfor.Howdoweproceedthen?
Gotit.Now,isthecompanyplanningtofocusonday-to-dayailmentsgeneraldrugs
inIndia,ordotheyhavesomethingelseinmind?
Diabetesandhypertensionaretwoofthemostcommonhealth-relatedproblemsin
India.
Fairenough.Then?
Gotit.Now,isthecompanyplanningtofocusonday-to-dayailmentsgeneraldrugs
inIndia,ordotheyhavesomethingelseinmind?
Nextcomesregulatorybarriers.Sinceit’shealthcare,theregulationsarestringent.
Arethereanypossiblechallengesforthecompanyonthisfront?
Assumetherearesuchchallengesandthecompanycompletesallrelevant
procedures.Proceedwiththeoperations.
Sure.Therearetwooperations–1.R&D,2.Manufacturing,3.Sales
ForR&D,thelabsneednotnecessarilybelocatedinIndia.However,testingneeds
tobedoneinIndia.ManufacturingoperationscantakeplaceinIndia.Or,theycan
importthemedicinesfromotherlocations.Withsettingupplants,itwilltakesome
timetobreakeven.Butinthelongrun,settingplantswillbeviable.Importing
meansadditionaldutypaidtothegovernment.So,Irecommendsettingupplants
inIndia.
Saleswillfirstinvolveacquiringendorsementsfromdoctors.Employingmedical
representativeswillseetothat.
Alright.Ithinkwehavecoveredeverything.Thankyou.
Conundrum I IIM Ranchi 12

16. PharmaceuticalCompany
MarketEntry
Case facts/ Notes
•Client has a 30% market
share globally.
•Client is open to enter
into new segment of
drugs.
•Determine the market
size for considering each
age segment
Problem Statement
•Client is a pharmaceutical company wanting to enter the Indian market.
•Client specialises in general-purpose drugs.
Recommendations:
•TheclientshoulddeliverdrugsforDiabetesandHypertension.
Pharma Market EntryStrategy/Framework
Product Regulations
•Considerdifferentaspectsandaskopen-endedquestions.
•Havesufficientreasonsforanysuggestionyoumake.
Key Takeaways:
Special
Drugs
General
Drugs
Diabetes
Hypertension
Market Potential
Market Size Market Share
Operations
R&D Sales
Manufacturing
Set up manufacturing plants in India
Import drugs from other locations
Population(Age22+)*Probabilityofbeingdiagnosedwith
diabetes/hypertension*Averagedoseperday
Conundrum I IIM Ranchi 13

17. PRICING
FRAMEWORK
CONSULTING CASE BOOK

18. PricingFramework
Conundrum I IIM Ranchi 15
Pricing a service/
product
Cost Based Value Based
Breakeven
analysis
Manufacturing
cost
R&D Cost
Perceived value
and benefits
Substitutes/
Complements
Parity Pricing
Willingness to
pay
Opportunity Cost
Differentiating
factors and cost
Competitor
analysis
Profit Margin

19. ApartmentsinaTier2city–InterviewTranscript
PricingStrategy
ArealestatecompanyisbuildingpremiumapartmentsinLucknow.Allflatsareof
1500squarefeet.Howwouldyougoaboutpricingthem?
Firstofall,pleasesharethelocationoftheapartments,andwhendoweexpect
themtogoforsale.
Theyarelocatedintherapidlydevelopingeasternendofthecity.Theapartments
willbelivebyJan’23.
Canyoupleaseshedlightonmorethelocalityinthevicinityoftheapartmentsand
theconnectivitytootherpartsofthecity??
GomtiNagaristhemostdevelopedregionofLucknow,ithasexpandedeastward
overthelast5years.Therearegovernmentandprivateofficesintheregion,the
finestrestaurantsofthecityarealsocloseby.Thereisalsoaproposedmetroroute
forthearea.
Thebuildingconsistsof4towersand50flatsineachofthem.Weareoffering
beautifulhomeswithamenitiessuchasgym,swimmingpool,recreationalarea.
Whatisthenumberofflatsandtowers?Whataretheamenitiesoffered?
Let’sbeginwiththecostbasedapproach.
Wecanlookatthreepricingmethodsandthentakeacallonhowtoproceed.We
willlookatcostbased,valuebased,andparitypricingmethods.
AtotalcostofRs.150Crorehasbeenincurredsincethefoundation.Theexpected
profitmarginis20%.Maintenancecostsaretopaidannuallyandnottobefactored
infortheinitialprice.WhilealltheflatswillbereadybyDec’22,flatswillbesold
beginningwithTowerAandwewillgoalongasflatsaresold.
We should set a price factoring in the costs incurred and expected profit margins.
For profit to be 20% of the investment, the expected revenue should be around Rs.
180 Crores. Expected Revenue= Number of flats * Price per flat. This gives us a price
of Rs. 90 Lakh/ flat. To begin with, Tower A flats can be sold at Rs. 90 Lakh, we
should factor in inflation and maintenance costs for flats sold after 2023.
Whataboutparitypricing?
TheapartmentsandflatsysteminLucknowisagrowingbusiness,thereare
apartmentsbeingbuiltinotherendsofthecitywhicharenotasdevelopedand
hencearepricedlower.PremiumFlatsaround1500sqft.inthisregionarepriced
similarly.
CanyouelaborateonValueBasedCosts?
Giventhefactthatthesearepremiumpropertiesinthemostdevelopedregionof
thecity,itisapttopricethemwithapremiumcost.Thematerialsandthelookand
feeloftheflatspointtohighperceivedvalueoftheflats.
That’sgreat.Ithinkwecanclosethenowasallthepointshavebeendiscussed.
Thankssir,itwasniceinteractingwithyou.
I would like to clarify some details, what are the total costs incurred for the project,
and the expected profit margin and the maintenance cost? Will the flats be sold in
phases or all at once?
Conundrum I IIM Ranchi 16

20. ApartmentsinaTier2city
PricingStrategy
Case facts/ Notes
•Number of apartments is
200.
•1500 square feet flats
•Premium apartments
•Cost incurred is Rs.150
Crores.
Problem Statement
•Client has built apartments in Lucknow
•To suggest a price for the flats when they go on sale
Recommendations:
•Clientshouldpricetheflatsat90Lakhastheyofferthebestamenitiesina
developedregion.
•Itisimportanttoattractcustomersthroughawarenesscampaignsaboutthe
propertyfeatures.
Strategy/Framework
•Forflats,locationandamenitiesareimportantfactorsforpricing.
•Itisimportanttolookatinvestorexpectationsandindustryoutlooktoarrive
atthefinalprice.
Key Takeaways:
Conundrum I IIM Ranchi 17
Pricing of Apartments
Cost Based Value Based
Expected Profit
Most Developed
region of the city
Parity Pricing
Competitor Profit
and offerings
Proximity to
Offices
Building costs
Premium homes
and amenities

21. NewMedicineLaunch–InterviewTranscript
PricingStrategy
Theclienthascompletedthetrialsforadrugwhichwilldecreasetheriskofcardiac
arrestinpatientswithhypertension.Itisapreventivedrugthatwillbe
administeredtopatientswithenduringhealthissues.
Iwouldliketoclarifysomemoredetails,beforeweproceed.
Yessure,goahead.
ThedrugsarepricedfromRs.500toRs.1000.Arethereanyotherfactorsyou
wouldconsider,whataboutthecostsforresearchanddevelopment?
Whatvolumesofthedrugareweexpectingtoputinthemarket,isitalowvolume
drugorahighvolumedrug?
Itwillinitiallybealowvolumedrug,astimegoesonandthedrugbecomesmore
successful,wewilllookatinternationalexpansionandhighvolumes.
Isitaliquid,tablet,orainjectionbasedtablet?Whatisthecompetitivelandscape
inthisdomain?
Itisanorallyadministeredtablet.InIndia,thismarketisnewwithahighscopeof
growth.Therearesomeothercompanieswithlowvolumesinthepreventivedrug
spaceforheartattacks.Ithasverylowsideeffectsascomparedtocompetitive
drugs.
So,wecanlookatthreepricingmethods,costbasedpricing,valuebasedpricing
andparitypricing.Howmuchcostswereincurredintomakingthedrugandwhatis
thefrequencyofconsumption?
EachdrugcostRs.500tomakeandwearelookingtohaveaprofitof20%.Thedrug
hastobeconsumedtwiceamonthforfouryears.
Toachievethedesiredprofit,wewouldhavetopriceeachtabletatRs.600.
ConsideringthatthisisanewspaceinIndia,thedrugshouldaimathighincome
groupstobeginwith.Whatarethepricesofotherpreventivedrugsforheart
attacks?
Okay,pleaseexpandonthis.
Soundsgood.
ThecostofaBypasssurgeryinIndiacanvaryfrom1-3Lakhs.Thefouryearcourse
ofthemedicinewillcosttheclientRs.57600.Evenwithinflation,themedicineis
pricedwellbelowthecostsofthesurgeryandisperfectlyplacedtoencourage
peopletoshifttopreventivemedicinestolowercholesterolandpreventsurgeries.
Isthedrugpatented,andarethereanygovernmentregulations?
Yes,thedrugispatented.ThegovernmenthasimposedamaximumpriceofRs.
1000onsuchdrugs.Canyousuggestyourfinalrecommendationsplease?
Yesma’am.Consideringthefactthatwearecateringtoanichemarketwitha
patenteddrug,thedrugcanbepricedfromRs.600toRs.700.Thiswouldbeinline
withcompetitorpricesbutstillsignificantlylesserthanasurgery.Itisimportant
thatthedrugispromotedthroughhospitalsandcardiologistsaremadeawareof
theadvantagesofthedrugstoreachthenichemarket.
Okay,thatwillbeall,thankyou.
R&D being sunk cost is not factored into final pricing. I would also want to look at
the overall cost of a Bypass surgery since it is a surgery that prevents heart attacks.
Conundrum I IIM Ranchi 18

22. Newmedicinelaunch
PricingStrategy
Case facts/ Notes
•Preventive drug that
reduces risk of cardiac
arrest
•Orally administered
drug, minimal side
effects
•Relatively low
competition, high scope
of growth
•Cost incurred is Rs.150
Crores.
Problem Statement
•Client is looking to price a drug that can prevent heart attacks, suggest a price utilizing pricing frameworks
Recommendations:
•Clarifysupportingdetailsbeforegettingtothecosts,asksquestionstodecidethe
framework.
•Decidetheframeworkasperthecase,somecasesutilizeallthreeframeworks,
othersdon’t..
Strategy/Framework
•SunkCostsareirrelevantwhilepricing.
•Itisimportanttolookatproductswhicharen’tyourexactsubstitutesbutstill
achievethesameobjective.
Key Takeaways:
Conundrum I IIM Ranchi 19
Pricing of Drug
Cost Based Value Based
Expected Profit Lesser side effects
Parity Pricing
Comparison with
Bypass surgery costs
Premium homes
and amenities
Orally
administeredFrequency of
consumption
Comparison with
other preventive
drugs

23. Spacewalk–InterviewTranscript
PricingStrategy
TheclientisanAmericanprivatecompanythathasrecentlyearnedtherightsfor
conductingspacewalksfromtheInternationalSpaceStation.Fitindividualscansign
upforthejourney.Howwouldyougoaboutpricingit?
Factoringinthefixedandvariablecosts,withtheobjectiveof100%profitand
recoveringthefixedcostinthefirsttwoyears,weneedatotalrevenueof$2.2016
Bilinthefirstyear.Distributingthiscostbetween120customers,itcomesto$18.4
Millionpertrip.Thisgivesusalowerlimittosetourprices.Whatarethe
competitorscharging?
Great,beforewebegin,whatisthepurposeoftheservice?Isthereanylimitation
onthenumberoftrips?Hasatrialrunbeenconducted?
Thepurposeoftheserviceistomaximisetheprofitfortheclientandprovidea
onceinalifetimeexperiencetothecustomers.Initially,onetrippermonthwillbe
there.Oneachtrip,10customerswillbegivenatouroftheISSandhavethe
opportunitytospacewalk.Wehavesuccessfullyconductedmultipletrialrunsand
havebeenapprovedbytheconcernedauthorities.Ittakes2daystoreachtheISS
onanaverage.Theywillspend2daysintheISS.
Arethereanycompetitorsinthisspace?Isthemethodologypatented?
Yes,wehavetwocompetitorswhichareofferingastayintheISS,wearethefistto
getthepermissionforspacewalks.Yes,thetechnologyispatented.
Yes,wehaveputin$1Billionintheproject.Weexpecttoincurmaintenancecosts
of$50Millionperyear.Thefuelandvariablecostsforatripcometo$10Million
pertrip.Miscellaneouscostsworth$50Millionwillalsobeincurred.Weaimto
recoverthefixedcostof$1Billioninthefirsttwoyears.Aprofitmarginof100%is
expected.
Wehavethreeapproaches,costbased,valuebased,andparitypricing.Canyou
elaborateonthecostsincurredintheprojectandthefuturecosts?
Thecompetitorsarechargingmorethanus,buttheyarealsoofferingsignificantly
longerstaysintheISS.Iwouldsuggestwestickneartothisrange.Anyotherfactors
youwouldconsider?
Yes,sinceweareprovidingthecustomerwithanexperienceofthespacewalk,
premiumchargeswouldbeappropriate.Factoringinthecontinuouslyincreasing
costsandthehighlevelofprecisionandsafetyforeachtrip,myrecommendation
wouldbetocharge$20Millionpercustomer.
Okay,thatsoundsgood.Wecanclosethis,thanks.
Conundrum I IIM Ranchi 20

24. Spacewalk
PricingStrategy
Case facts/ Notes
•10 people/trip, one trip
in a month
•2 days of the stay at ISS
•First company to provide
spacewalking services
•Fixed cost-$1 Billion
•Variable cost-$ 10
Mil/year
•Maintenance cost-$50
Million/year
Problem Statement
•The client will be providing civilians a trip to the International Space Station. Customers will also have the
opportunity to spacewalk.
Recommendations:
•Understandthecomplexityofthecasebeforebeginning.Rarecaseslikethis
needtobelookedatthroughmultipleangles.
•Decidetheframeworkasperthecase,somecasesutilizeallthreeframeworks,
othersdon’t.
Strategy/Framework
•Inprojectswithveryhighdegreeofsafetyandprecision,itisadvisabletoadd
apremiumtofactorincontinuousimprovements.
•Itisimportanttolookatproductswhicharen’tyourexactsubstitutesbutstill
achievethesameobjective.
Key Takeaways:
Conundrum I IIM Ranchi 21
Pricing of Spacewalk
Cost Based Value Based
Fixed & variable
costs
The spacewalking
experience
Parity Pricing
Comparison with
other companies
offering space travel
Premium homes
and amenities
2 day stay at the
ISS
Number of trips
Pricing according to
the services offered
w.r.t competition
Expected profit

25. EVCarLaunchinIndia–InterviewTranscript
PricingStrategy
TheclientisaGermancompanywithplanstolaunchitsfirstEVCarinIndiain
Jan’23.Howwouldyoupriceitgiventheindustryscenarioandtheinfrastructure?
Sure,Iwouldliketogetsomemoredetailsbeforewegettothepricing.Canyou
sharesomespecificationsofthecar?
Yes,the5seatercarhasa32KWHLithiumIonBattery,withafullchargerangeof
350km.Thebatterycanbefullychargedin80mins.Itcanacceleratefrom0-100
Kmphin8seconds.Itisenabledwithandelectricsunroof,andcomeswithabuiltin
voicecommandsystem.Thecarisaimedtoprovidecomfortandluxuryinan
environmentallyconsciousmanner.Canyoulookattheindustryfactorswhichcan
contributetothepricing?
Okay.TheelectriccarindustryinIndiaisatanascentstage.Whilesomemajor
companieshaverolledouttheirElectriccars,therestillremainsaquestionmarkon
India’selectriccharginginfrastructure.Though,itistobenotedthattherearealot
ofgovernmentincentivestobuyEVsincludingIncomeTaxBenefits,RoadTax
Exemption,DiscountedInterestRatesonLoanandsoon.Whilethecurrent
industryisatitsinitialstage,itshowssignsoftremendousgrowth.
That’sgreat.Goaheadwiththepricingnow,notconsideringgovernmenttaxes.
Yessir,settingthepriceatRs.10,50,000seemslikeagoodidea.Itiswithinthe
rangeofourcompetitors,buttheamenitiesarebetter.Thiswillattractcustomers.
Aconservativepriceisgoodfornow,astheEVlandscapeisgrowinginIndiaand
customersneedtobemotivatedtoshifttoit.Hence,pricescanbeincreasedlater
onasthespacefurtherdevelopsandtheclientestablishesmarketshare.
Okay,thatsoundsreasonable.Ourcompetitorpricesareinthesamerange.Weare
offeringmoreamenitiesthanthemthough.Shouldthatbeafactor?
Yessir,thataddstothevalueofthecar.Featureslikesunroofandvoicecommand
systemsaddtotheperceivedvalue.PremiumchargesofRs.50,000canbeaddedto
thecar.
Okay,canyousummarizeyourrecommendations?
There are three frameworks for pricing: cost based, value based, and parity pricing.
Can you elaborate on the costs that go into making the car?
Rs.7,00,000areneededtomakeacar.OurfixedcostsareRs.500croretosetupthe
infrastructureinIndia.VariablecostsofRs.50croreareexpectedtobeincurredper
year.Weareexpectingtosell30,000unitsinthefirstyear.Weaimtorecoverthe
fixedcostsinthefirst4years.Wearelookingataprofitof30%percar.
The price per car factoring in the fixed and variable costs and making costs comes
out be around 7.6 Lakh. For 30% profit per car, before taxes and commissions, the
car should be priced at Rs. 10 Lakh initially. Inflation should be taken into account
for the four years.
Thatsoundsgood,thanks!
Conundrum I IIM Ranchi 22

26. EVCarlaunchinIndia
PricingStrategy
Case facts/ Notes
•32 KWH Lithium battery,
full charge range of 350
km.
•Comes with an electric
sunroof and a voice
command system
•Fixed cost-Rs. 500 crore
•Variable cost-Rs. 50
crore/year
Problem Statement
•The client is going to launch an Electric car in India. Suggest how should he go about pricing it.
Recommendations:
•Itisimportantfortheinitialpricetobesuchthatcustomersareattracted.Aprice
ofRs.10.5LakhwiththepremiumfeaturesoftheElectricCarwillsurelypullthe
uppermiddleclassandhighincomesegmentofthepopulation.
•TheclientshouldkeepaneyeoutfordevelopmentsintheEVspaceand
governmentinitiatives.
Strategy/Framework
•Forindustriesexpectedtogrow,evaluatetheindustryoutlookbeforepricing.
•Understandyourconsumers,lookattheirpreferencesbeforereachingafinal
price.
Key Takeaways:
Conundrum I IIM Ranchi 23
Pricing of EV
Cost Based Value Based
Fixed & variable
costs
Sunroof and the
voice command
system
Parity Pricing
Comparison with
other companies in
the EV space
Better for the
environment
Recovery of
investments
Pricing according to
the services offered
w.r.t competition
Expected profit

27. PROFITABILITY
FRAMEWORK
CONSULTING CASE BOOK

28. Profit
ProfitabilityFramework
Revenue Cost
No. of units sold Price/Units Variable CostFixed Cost
Customer
Distribution
Production
Raw Material Processing
Storage &
Transportation
Sales &
Marketing
R&D
Customer
Service
Cost Reduction Framework
25Conundrum I IIM Ranchi

29. ITFirm-InterviewTranscript
Profitability
Yourclient,aGurgaon-basedproviderofITservices,hasbeenexperiencingfalling
profitability.Diagnosetheissue.
Ifthat’sokay,IwouldliketoaskafewclarifyingquestionsbeforeIbegintoanalyze
thecase.
Goahead.
Sincewearefacingdecliningprofits,Iwanttounderstandiftheproblemisspecific
toourclientoranindustry-wideproblem.
Thisisspecifictoourclient.
TheyaremainlybasedintheUSandyoucanconsiderourclienttobeamarket
leaderintheindustry.
Canyoutellmewheretheclient'scustomersarelocated?Also,ifyoucansharethe
competitivelandscapeoftheindustry.
Sincethefirmisfacingprofitabilityproblem,I’llliketounderstandtheprofit
structureofthefirmandbreakitdownintorevenuesandcostswhicharethetwo
componentsofprofit.
Yes,youareright.Revenueshavebeensteady.Youcanfocusonthecosts.
Inthatcase,I’llliketolistbreakdownofthecostsources.Themajorcosts
associatedwiththefirmwouldbeHRcosts,Infrastructurecostsandany
Miscellaneouscosts.
WhatareInfrastructureCosts?
Infrastructurecostswouldbetheexpensesrelatedtolicensingsoftwareor
maintaininghardwaresuchasservers,desktops,andlaptops.Additionally,itmay
alsoincludetherentoftheoffice.
Let’stalkaboutHRcostsandthefactorsthatcontributetoit.
Accordingtome,thenumberofemployeesintheorganization,employeemixand
theiroverheadscanallaffectHRexpenditures.Areanyofthesefactorsresultedin
theissue?
Whydoyouthinkemployeemixcontributestowardsincreasingcosts?
Thenumberofemployeesneededforvariousroleswillhaveasignificantimpacton
theHRexpenditures.Forinstance,inaprojectteam,theremaybeamanagerand
fewdevelopers,eachofwhichgetspaiddifferently.Therefore,evenwithrelatively
lessnumberofemployees,costswillincreaseiftherearemoreemployeesattop.
Doyouthinktherecanbeanyotherwaybywhichemployeescangetpaid
differently?
Ifthereisaonshoreteamforthecompany,employeescanhavedifferentsalaries
duetoonshore-offshoremix,whichcanresultinhighercosts
Yes,youareright.Thatwasoneofthemajorissuesofourclient.
Thanks,we’llwrapithere.
26Conundrum I IIM Ranchi

30. ITFirm
Case facts/ Notes
•Client’s customer is
mainly based in US
•Client is a market leader
in the industry
Problem Statement
•Client is Gurgaon based IT services provider
•Diagnose the reasons for declining profitability
Key Takeaways:
•SegmentingtheHRcostsintovariouscomponents
•AspectofEmployeemixcanaffectHRcosts
Profit
Strategy/Framework
Revenue Cost
HR Costs Misc. Costs
Infrastructure
Costs
Profitability
Employee
Mix
Overheads
No. of
Employees
Hardware
Costs
Software
Costs
Office Rent
27Conundrum I IIM Ranchi

31. RetailBank-InterviewTranscript
Profitability
Ourclientisamajorretailbankfacingdecliningprofits.Ourgoalistofindthe
problemandsuggestchanges.
Beforewedelvedeeperinthecase,Iwouldwanttoaskafewclarifyingquestions
aboutourclient.
Sure,pleasegoahead.
Istheproblemspecifictoaparticularbranchofourclientorisitforallthe
branches?
Thisisspecifictoabranchlocatedinanurbanregion.
Theproblemisonlyfacedbyourclient.
Giventheproblemisspecifictoaparticularbranch,arethecompetitorslocatedin
theregionalsofacingthesameissue?
Sincehowlonghastheproblempersistedandbyhowmuchhastherebeena
declineofprofits?
Theprofithasdeclinedby15%andithasbeenaroundforthelast6months.
Thisbeingaprofitabilityissue,canyouhelpmeunderstandthetrendinrevenue
andcostofthatparticularbranchoverthelast6months.
Gotit.Inthatcase,I’ddelvedeepintothecoststructureofaretailbankbranch.
Thecostsaretypicallydividedintothreecomponents:Interestexpense,
ProvisioningandOperatingExpense.Dowehaveanyinformationifanyofthese
expenseswerenotinlinewiththeexpectedexpensebyourclient?
Theinterestexpenseandtheprovisioningcostsareatparwithotherbanksofthe
region.
Thissuggeststhattheissuemightbewiththeoperatingcostsofthebranch.The
majoroperatingcostsareemployee/agentssalary,rent,maintenanceand
depreciation.Dowehavedataonwhichoftheseelementsareaffected?
Therenthasremainedthesameforthepastyearandmaintenance,depreciation
andthesalarystructurehavealsoremainedthesame.
Inthatcase,theissueseemstobewithoverstaffing.Also,sincetherevenuehas
notgrownupproportionately,theissuecanalsobewithinefficiency.
Canyouthinkofapossiblereasonforefficiency?
Theremaybealackofpropertrainingfortheemployeesduetowhichtheymight
betakinglongertimetosolvethequeriesofthecustomer.
Whatwouldbeyoursuggestionstoovercomethis?
Revenuehassteadilygrownwhereasthecostsincreasedatamuchsteeperrate.
1.Traintheemployeessotheyarebetterequippedtounderstandandcaterto
theneedsofthecustomer
2.Demonstrateandencouragebranchcustomerstousethebank’smobileapp
foravailingbasicservices
Thankyou.Theyarelogicalsuggestions.
28Conundrum I IIM Ranchi

32. RetailBank Moderate
Case facts/ Notes
•Client is a major retail
bank
•Profitability issue due to
increasing costs
•Problem specific to a
particular branch
•Low Efficiency of
employees
Problem Statement
•Client is a major retail bank
•Diagnose the reasons for declining profits and recommend solutions
Recommendations:
•Givepropertrainingstotheemployees
•Promoteusageoftechnologytoavoidredundanttasks
Profit
Strategy/Framework
Revenue Cost
Fixed Costs Variable Costs
Profitability
Maintenance
Costs
Employee
Salaries
Rent
NPAs
Interest on
Deposits
Customer
Handling Costs
Total Working
Hours
Time taken by
employee /
customer
Employee
Efficiency
Key Takeaways:
•Understandtheconceptofcoststructureinabankingindustry
•Risingemployeesalariesareaprimaryfactorforincreasingcosts
29Conundrum I IIM Ranchi

33. ElectricityGenerationCompany-InterviewTranscript
Profitability
AnIndiabasedelectricitygenerationcompanyhasapproachedyoufordeclining
profits.Analyzehowwouldyouapproachthesolution.
Iwouldliketounderstandiftherehasbeenadecreaseintherevenuegenerated,
orincreasedcostsincurred,oracombinationofboth.
Thecostshaveincreasedwhiletherevenuehasmostlybeenthesame.
TheyareusingGasTurbineGenerators.Whatdoyouthinkarethevariouscost
driversingeneration?
Whichcosts,inyouropinion,aremorecontrollablefromtheclient'sperspective?
Inputfuelcosts,machineoperatingcosts,labourcosts,conversioncosts,andrepair
andmaintenancecostswouldbethekeyexpensesinthegenerationprocess.
Ingasturbines,naturalgasisthemaininputfuel.Thepricesaredependentonthe
priceofcrudeoilandasaresulthasanimpactonhowmuchtheycost.Thus,Client
controloverthesepriceswillbelimited.Thecostsassociatedwithoperating,
supervising,andmaintainingmachines;thecostsassociatedwithoperatingthose
machines;thecostsassociatedwithrepairsandmaintenance;thecostsassociated
withconversion;andtheefficiencyofthosemachinesdependingonthetypeof
machineusedareallwithincontrol.Therearedeviceswithefficienciesbetween
30%and60%.Highercapitalexpenditureswouldproducemoreeffectivemachinery
withloweroperatingexpenses.Additionally,theywillrequirelessupkeep.
Ourfocusshouldbeonanalyzingwhichofthesecontrollablecostshaveincreased.
Great.Canyoucalculatetheelectricitygeneratedinayearifourclienthas8
turbinesrequiringXunitsofnaturalgasperminuteand1unitofnaturalgas
producesapproximately15unitsofelectricity.
Assumingthattheturbinesworkfor15hourseachdayfor~300daysinayearand
theirefficiencyis40%.
Electricitygeneratedinayearwouldbe–8*X*60*15*15*300*0.4=
1,29,60,000Xunits
Great.Howdoyouthinkcanthepowergeneratedbeimproved?
Theefficiencywouldbethefirstthingthatcomestomind.Wemightconsider
purchasingnew,moreefficientmachinerytoincreasethenumberofunits
produced.
Thankyou!Itwasniceinteractingwithyou.
That’sallfromourside.Thankyouandallthebest!
I'dfocusonthecoststructureandanalyzeitacrossthevaluechain.Anelectricity
generationcompany'sprimaryvaluechainactivitieswouldbeGeneration,
TransmissionandDistribution.Forageneration,whatkindofturbineisbeingused?
30Conundrum I IIM Ranchi

34. ElectricityGenerationCompany
Case facts/ Notes
•Client is electric
generation company
•Profitability issue due to
increasing costs
•Analyzing the
controllable costs
Problem Statement
•Client is an India based electric generation company
•Diagnose the reasons for declining profits and analyze the cost value chain
Key Takeaways:
•Itisessentialtohaveasolidunderstandingofthevaluechainanddifferentcost
driverstoanalyzetheproblem
Profit
Strategy/Framework
Revenue Cost
Generation Distribution
Profitability
Controllable
Costs
Uncontrollable
Costs
Transmission
Machine
Operating
Manpower
Conversion
Repair &
Maintenance
31Conundrum I IIM Ranchi

35. PrintMedia-InterviewTranscript
Profitability
OurclientisafamousnewspaperpublisherinIndiaandarefacingdeclining
profitability.Theyhavereachedustohelpthem.
Thanksfortheproblemstatement.Iwouldwanttounderstandhowlongtheyhave
beenfacingthisissue.
Theissuehascontinuedforthepastsixmonths.
Okay.I’dalsoliketounderstandwhichsegmentslikeDailyNewspapers,Online
News,Journalsetc.theyarepresentin?
Theyarepresentonlyinthedailynewspapersegment.
Revenueshavebeensteadywhilethecostshaveincreased.
Sincethisisaprofitabilityissue,I’dfirstliketoknowwhethertheirrevenueshave
declinedortheircostshaveincreased.
Thevariablecosthasgoneup.
Thevariablecostcomponentswithrespecttoprintmediawouldconsist–
Rawmaterials,Content,Printing&Packaging,Distribution,Marketing.Didwe
observeanincreaseinanyoftheseexpenses?
Thedistributioncostswouldconsistofagentssellingnewspapers(door-to-door)
andvendorsdistributingthenewspapers.I’dliketounderstandwhichonehasbeen
impacted.
Theirhasbeenanincreaseinthecostincurredbyagents.
Totalcostonagentswouldbeafunctionofcostincurredperagentandthetotal
numberofagents.Hasanyofthesegoneup?
Thecostincurredperagenthasgoneup.Canyousuggestwhyisthisthecase?
Sincetheagentsaremainlyresponsiblefordeliveringnewspapers,I’dthinkthe
increasedcostperagentwouldbeduetoadditionalresponsibilitiesshoulderedby
theminprovidingqualityservice.
Whatfactorscanberesponsibleforqualityinservice.
Thedistributioncostshaveincreased.
Thefollowingfactorscanberesponsible–
1.Givingthemadditionalresponsibilitytomarketandpushournewspapers
2.Expectingthemtocoveralargerareathanmarketcompetitors
3.Askingthemtodeliverthenewspapersatanearliertime
Great.Youareright.Theiragentsarebeingpaidhigherastheyareexpectedto
coveralargerareathantheircompetitors.Wecanwrapituphere.Thankyou!
Beforewedeepdiveintothevaluechain,doweknowwhichbetweenthefixedand
thevariablecosthasbeenimpacted.
32Conundrum I IIM Ranchi

36. PrintMedia
Case facts/ Notes
•Client is a famous
newspaper publisher
•Profitability issue due to
increasing costs
•Analyzing the newspaper
cost value chain
•Rising cost per agent
Problem Statement
•Client is a famous newspaper publisher
•Diagnose the reasons for declining profits
Key Takeaways:
•Creatingtheprocessmaptolocatedifferentcosts
•Analyzingeachcomponentofthecostthoroughlyandtryingtounderstandthe
rootcauseoftheissue
Profit
Strategy/Framework
Revenue Cost
Fixed Costs Variable Costs
Profitability
Printing &
Packaging
Distribution MarketingContentRaw materials
Agents Vendors
Cost/Agent No. of Agents
33Conundrum I IIM Ranchi

37. MARKET GROWTH
FRAMEWORK
CONSULTING CASE BOOK

38. Growth
MarketGrowthFramework
Organic Growth Inorganic Growth
Revenue per
Customer
No. of Customers
Merger &
Acquisitions
Joint Ventures
Promotions
Cross-selling
Life Span/ Usage
Price Charged Existing Channels
New Channels
DemandSupply
Customer
Segments
Geography
35

39. RestaurantChain-InterviewTranscript
GrowthStrategy
TheclientisarestaurantownerinBangaloreandwantstoexpanditstoplineand
needyoursuggestiontoachievethegrowth.
So,beforewegetintothecase,Iwouldliketoaskfewpreliminaryquestionslike
whatisthemainobjectiveofclient.
Yes,sure.Clientwantstodoublehissalesinnexttwomonths.
Okay,whereistherestaurantlocatedandwhatistherevenuebreakupintermsof
dine-inandtake-away.
TherestaurantislocatedinFoodStreet.60%oftherevenuecomesfromdine-in
and40%comesfromtake-aways.
ThemenuhashighproportionofsouthIndiandishesandfewnorthIndiandishes
andtherestaurantisknownforitsBiryani.
So,whatdifferentcuisinedoweoffertoourcustomersanddowehaveany
particularspecialty.
Aswehavetherelevantinformation,wecanstartthecase.Inordertoincreasethe
revenue,wegenerallyfollowtwoapproaches-OrganicgrowthandInorganic
growth.Butasthetimelineisshortweshallfocusontheorganicgrowthstrategies.
Yes,youareright,goahead.
RevenuecanbechangedbyeithervaryingNoofBillingsorAverageBillper
customer.Firstly,talkingaboutthedine-insegmentasmajorpartofrevenue
comesfromit,wecanmakesomechangesintheinteriorsoftherestaurantto
providegoodambiencetoitscustomersandweshallalsodiversifyourmenu
optionssoastocatertheneedsofdiversesetofcustomers.Itwillhelpexpandthe
customerbaseandalsoincreasethevisitingrateofexistingcustomers.
Anyotherstrategyforimprovingrevenuefromdine-in.
Wecandolifestylemarketingtocreateanemotionalconnectwiththepotential
customersandcreateanengagingcontentonsocialmediahandleswhichwillagain
expandourcustomerbase.
Okay,wecannowmovetotake-awaysegment.
Beforeexploringthissegment,Iwouldliketoknowwhethertherestauranthas
partneredwithanyfooddeliveryserviceorithasitsowndistributionchanneland
whatisthegeographicalareacoveredbyit.
Asofnowthecompanyisdeliveringfoodthroughitsdistributionchannelandis
deliveringwithin10kmsofradius
Great,wecanpartnerwithfewfooddeliveringpartnerslikeZomato,Swiggyto
leveragetheirsupplychainandwidenetwork.Partnershipwithsuchappswillnot
onlyincreaseourcustomeroutreachbutwillalsohelpinmarketingourrestaurant.
Itwillhelpincreasingtherevenuefromtake-awayaswellasdine-in.Sohowdowe
packageouritemsfortake-away,dowehavefoodgradeboxesanddowedobrand
onourboxes?
No,currentlytherestaurantpacksitsfoodinsimpleboxes.
Weshouldlabelallthepackagesanditshouldcontainproperbrandingofthe
restaurant.Weshouldalsousefoodgradepackagesinordertosignifythe
restaurant'svaluesofprovidinghighqualityfoodtoitscustomers.
That’sgreat.Ithinkwecanclosethenowasallthepointshavebeendiscussed.
Thankssir,itwasniceinteractingwithyou.
Conundrum I IIM Ranchi 36

40. RestaurantChain
GrowthStrategy
Case facts/ Notes
•Revenue breakup-60%
from dine-in and 40%
from take-away.
•Limited items in menu.
•It delivers within 10 km
through its own delivery
channel.
•Packaged food is in
unlabeled box.
Problem Statement
•Client is a restaurant owner in Bangalore
•To evaluate a growth strategy to double its sale in 2 months
Recommendations:
•Clientshouldmakesomechangesininteriorofitsrestaurantanddiversifyits
menu.
•Itshouldtieupwithfooddeliverypartners,whichwillalsobetoolformarketing.
Revenue
Strategy/Framework
Dine-in Take-away
Revenue per
Customer
No. of
Customers
Organic
Growth
Inorganic
Growth
•Itisimportanttogetaclarityontheobjectiveandthetimelineforgrowth
strategy.
•Ashorttermgrowthstrategydiffersfromlongtermgrowthstrategy.
Key Takeaways:
Interior
Modifications
Expand Menu
Partnership with
delivery apps
Horizontal
Integration
Conundrum I IIM Ranchi 37

41. AutomotiveBatteryManufacturer-InterviewTranscript
GrowthStrategy
Theclientisleadinganautomotive-batterymanufacturerinUS.Theyarecurrently
operatingatafullproductioncapacity,andareworriedthattheywillnotbeableto
serveitiftheproductdemandrises.Deviseastrategytocatertherisingdemand.
So,beforewegetintothecase,Iwouldliketoaskfewpreliminaryquestions.
Yessure,goahead.
Whatwillthesupplysideforthesecountries?
Sure.SoasChinaisthehubofseveralproductionfacilitiesitprovidestheright
technologicalenvironmentandIndiaisknownforprovidingcheaplabor.Boththe
countrieswillprovidethecostbenefitsaswecanproduceandsellthelargeunitsof
theproductinthesamecountryavoidinganyimportrestrictions.
Istheclientwillingtoexpanditsproductionglobally,whatpartofvaluechaindo
weoperateinandwhatisthecurrentmarketshare.
Yes,theclientiswillingtoexpandglobally,currentlyitismanufacturingonly
automotivebatteriesandithold70%ofthemarketshare.
Iwouldalsoliketoknowiftheclienthasaspecificobjective-uninterruptedsupply
orlowcostofproduction.
Thereisnosuchdefinedobjective,weshallexploreboth.
Alsoarethereanydemandforecaststhatwehaveandwhethertheclientis
currentlysellinggloballyorinUSmarkets.
So,theautomotiveindustryisexpectingamoderategrowthof–8-10%.Currentlyit
issellinginUSmarketsbutislookingtoexpanditsmarketglobally.
So,asweknowallthefactsnow,wecanlooktheproblemwithtwodifferent
growthstrategies-Organicgrowthstrategyandinorganicgrowthstrategy.
Let’s,firstlookatorganicgrowthstrategy.
So,inordertoexpandglobally,clientcanstartitsproductionfacilitiesincountries
likeChinaandIndia.Thesearetheemergingeconomieswheretheautomotive
industryisgrowingatafasterpaceascomparedtoglobalgrowthrate.
HowwillrisingdemandofUSbecatered?
Fairenough.
So,tocatertheneedofUSmarketwecanexportthebatteriesfromChinaand
IndiaasitwillreducetheoverallcostascomparedtoopeninganewunitinUS.
So,aswehavecoveredthemajoraspectsoforganicgrowth,socanwelookinto
inorganicgrowthstrategies?
Yes,goahead.
So,wecanalsogoforthehorizontalintegrationwhereinwecanacquirethelocal
manufacturerswhohavetheunutilizedproductioncapacitywhichcanbeusedfor
servingtherisingdemand.Wecanalsogoforupwardintegrationandacquirethe
suppliers,whichwillhelpustoreducetheaveragecostofproductionandmore
controlonthesupplyofrawmaterial.
Good.Summarizethecasenow.
So,wehavelookedatopeningthenewproductionfacilitiesinChinaandIndiato
catertherisingdemandinthesecountiesaswellasinUS.Then,weexploredthe
possibilityofacquiringtheexistingmanufacturers.
Goodjob.
Conundrum I IIM Ranchi 38

42. Case facts/ Notes
•Leading automotive
battery manufacturer in
US holding 70 % of
market share.
•Strategy for rising
demand.
•Automotive Industry
expected to grow at 8-
10%.
•Client looking to expand
its business globally.
Problem Statement
•Client is a automotive battery manufacturer in US
•To evaluate a strategy for serving the rising demand
Recommendations:
•ClientshouldexpandtoemergingeconomieslikeChinaandIndiawhichwillnot
onlybethelargecustomersegments,butwillalsobecostefficient.
•Itcangoformergerandacquisitionseitherverticallyorhorizontally.
Increasing
Sales
Strategy/Framework
Organic
Growth
Inorganic
Growth
Global
markets
US Markets
•Casemaydemandanopen-endedgrowthstrategytoevaluatethecandidates
structuredapproach.
•Interviewermaysometimegivenonverbalcueswhichareimportanttonote.
Key Takeaways:
Rising
demand
Advanced
Technology
Cheap Labor
Global
markets
US Markets
Horizontal
Integration
Vertical
Integration
Automotive Battery Manufacturer
Growth Strategy
Conundrum I IIM Ranchi 39

43. OTTPlatform-InterviewTranscript
GrowthStrategy
TheclientisanationwideIndianOTTvideostreamingplatform.Itisfacing
stagnationintermsofitssales.Deviseastrategytoincreaseitstopline.
Thankyouforthecase.Ihavefewpreliminaryquestions.Isthereanyspecific
timelineorbudgetandistheclientwillingtoexpandglobally.
That’samajorshift,isthereanywaytoachieveobjectivewithitsexistingbusiness.
WecanfocusonimprovingourplatforminterfacewiththehelpofUI/UX,
suggestionalgorithmsandmarketingourplatform.Also,asitacompetitive
segment,wecanpriceourservicesatparwithcompetitorswhichwillhelpin
increasingthenumberofpremiumcustomers.Iwouldliketoknowhere,what
contentisproducedin-houseandwhatislicensed?
Devisebothshort-andlong-termstrategies.Therearenobudgetconstraintsand
currentlyclientisnotwillingtoexpandgloballyasitfeelsthatthereislotof
untappedpotentialinexistingmarkets.
Great.Iwouldtoliketoknowmoreabouttheplatform-whatkindofcontentdowe
offer,inhowmanylanguagesandwhatisthebusinessmodelandhowitspriced.
Thecompanyhasafreemiummodel.Itmonetizesitsfreeversionbyadvertisement
revenueandhasuserbaseof20M.Thepremiumversionhasauserbaseof2M.It
offersin-houseproducedandlicensedentertainmentcontentlikemovies,TVshows
acrossseveralgenresinEnglishandHindianditispricedhigherthanitscompetitor.
Isthereanydifferencebetweenthefreeandpremiumcontent,whoarethemajor
targetcustomersegmentandwhatiscompetitioninmarket?
In-housecontentisavailableonlyforpremiumusers.Mostoftheusersareurban
youthsfromTier1&2cities.85%ofthemarketisbeingcapturedbylargeplayers.
Okay,sowecandeviseanorganicandinorganicgrowthstrategytoachieveourgoal
Let’sfocusonorganicstrategynowandthenmovetotheothersegment.
So,revenuecanbeclassifiedundertwoheads-numberofcustomersandrevenue
percustomer.Astheseareinterlinkedandworkshandinhand,wewillfocusmore
onincreasingthecustomerbase.Wecandiversifyourcontentbyincludingsports
andnews.Itwillrequirecontentacquisitionswhichisalong-termplan.
SomeoftheEnglishcontentisproducedandHindicontentiscompletelylicensed.
So,whichofthecontentisbeingpreferredbythecustomers?
Englishin-housecontentislikedbylargesegmentofcustomers.
Okay,asourin-housecontentisperformingwell,weshallstartproducingHindi
contentaswellasandenterintosomeofthecontentacquisitionsaspartofour
inorganicgrowthstrategy.
Great,whatfactorswillyouconsiderforthat?
Iwillevaluatethefinancialandnon-financialfactors.Underfinancialfactorswewill
dothecostbenefitanalysis.Weshalllookforthecurrentcustomeracquisitioncost
andcomparewiththeacquisitionpricefortheircustomers.Undernon-financial
factorsweshalllookforthelegalities,managementculturesandcontentquality.
Whatcanbethepotentialriskspostacquisition?
Great,nowwecanclosethecasehere.
ThevaluesandcontentcreationmayvaryfortwofirmsandacquiringmoreHindi
contentmaybringanegativeimpactontheexistingEnglishcontentusers.
Conundrum I IIM Ranchi 40

44. Case facts/ Notes
•Indian OTT platform
with 20M free users and
2M premium users.
•It has both in-house
produced and licensed
content of which
English is in-housed.
•Urban Youth of Tier 1&2
cities are its major
customers.
•85% of the market
share is held by big
players.
Problem Statement
•Client is a nationwide Indian OTT video streaming platform.
•Devise a short and long term strategy to increase its top line.
Recommendations:
•Inshort-term,clientshallreviseitspriceandmakesomechangesintheplatform
interfacetomakeitmoreuser-friendly.
•Inlongterm,clientshallgoforcontentacquisition,startin-houseproductionof
Hindicontent.
RevenueStrategy/Framework
Organic
Growth
Inorganic
Growth
•Inmergerandacquisitioncases,trytodocostbenefitanalysistoconfirm
whetheritwillbefeasibleoptionornotfortheclient.
•Understandtheobjectiveanddevisetheshort-andlong-termstrategies
accordingly.
Key Takeaways:
Growth Strategy
OTT Platform
M & A
Revenue per
Customer
Joint Venture
No of
Customers
Market ShareMarket Size
New
Geography
New Content
Pricing
Platform
Interface
Content
Variety
Conundrum I IIM Ranchi 41

45. CoffeeProducer-InterviewTranscript
GrowthStrategy
Theclientisaglobalcoffeeproducer.Itislookingfordoublingitssalesinnext
3years.Formulateagrowthstrategy.
So,beforegettingintothecaseIwouldliketoknowmoreaboutourclientandthe
industry.Whatpartofvaluechaindoweoperatein.Doestheclientownplantation
orwebuythegreenbeansandprocessthemandatwhatratetheindustryis
growing.
Weshalldothecostbenefitanalysisforpurchasingaland.Wecancompare
countriesonthebasisofperhectareyield,costofland,laboravailability,
transportationfacilities.
Theclientoperatesinboth.Weownplantationsfromwhichwemaketheroasted
groundcoffeeandalsobuyhighqualitygreencoffeebeansfromothersand
processittoinstantcoffee.Industryisgrowingat7%.
Great,whatistheshareofrevenueofeachunit,inwhichcountriesdoestheclient
operatesinandarethereanycostconstraintswhichweneedtonote?
60%oftherevenuecomesfromthecoffeebeansfromourownedplantationsand
40%fromtheinstantcoffee.CurrentlytheclientownsfieldsinBrazilandVietnam
butsellsglobally.Ignorethecostsasofnow.
So,asnowIhavetherelevantinformation,Iwouldliketoapproachthiscasefrom
twoaspects-demandandsupplybydevisingorganicandinorganicgrowth
strategies.ShallIcontinuewithsupplysidefirst?
Sure,goahead
Okay,asthemajorpartofrevenuecomesfromtheroastedgroundcoffee,weshall
startwithit.Wecaneitherincreasethenumberofplantationsorwecanincrease
thedistribution.Currentlytheclienthasfieldsinonlytwocountries,butwecan
acquiremorefieldincountrylikeIndiawherewecangetfertilelands.
Whatallfactorstobeconsideredwhileacquiringland.
Interesting,goahead.
Tofocusonourdistributionstrategies,wecantiewithlocaldistributorsandmake
ourcoffeeavailableacrossthecountry.Weshallalsoensurethatthewholesalers
maintaintheadequatestockstoensureuninterruptedsupply.
Let’snowlookintodemandside.
Sure,atwhatrateourclientisgrowing?
Theclientisgrowingat6%.
Asthecompanyisunderperformingascomparedtotheindustrygrowththereisa
potentialtogrow.Weshallfocusonproducinggoodqualitybeansatourown
plantationsandalsosourcehighqualityofgreenbeansforinstantcoffee.
Isthereanyotherwayofincreasingthesales
Wecanpriceourproductsdifferentlyfromourcompetitors.Weshallchargea
premiumpriceforourhigh-qualityproductsandcanchargeacompetitivepricefor
thebeanssourcedfromthirdparty.Itwillboostthebrandimageofthecompany.In
termsofinorganicgrowthstrategy,wecanacquireourcompetitorsofferingsame
valuetoitscustomersandwecanpurchasetheplantationsfromwhichwesource.
That’sgreat.Ithinkwecanclosethecasenow.
Thankssir,itwasniceinteractingwithyou.
Conundrum I IIM Ranchi 42

46. Case facts/ Notes
•The client has its
production facilities in
Brazil and Vietnam.
•60% of the revenue
come from coffee beans
sourced from own
plantation and rest
comes from beans
sourced from third
party.
•Industry is growing at
7% whereas the client is
growing at 6%.
Problem Statement
•Client is a global coffee producer
•Formulate a 3-year plan to double its sales.
Recommendations:
•Theclientshouldpurchasemorelandandproducequalitybeanstoincreasethe
salesfromroastedcoffeebeans.
•Theclientcanacquireitscompetitorsortheplantationsfromwhichitsourceits
greenbeans.
RevenueStrategy/Framework
Organic
Growth
Inorganic
Growth
•Thepreliminaryquestionsandvaluechainarekeytoanalyzetheproblemina
rightway.
•Takeaclosenoteoftheimpactofdemandandsupplyfactors.
Key Takeaways:
Growth Strategy
M & ADemand
Joint Venture
Supply
DistributionLand Quality
Pricing
Land Price
Yield per
hectare
Capital &
Labor
CoffeeProducer
Conundrum I IIM Ranchi 43

47. YourclientisMyntra.Theyarefacingstagnationintheirsales.Formulatea2-year
growthstrategytoincreasetheirtoplineandbottomline.
Thisisaninterestingcase.Ihavesomepreliminaryquestions.Whatisthecurrent
marketshareofthecompany,whoareitsmajorcompetitorsandisthereany
specificobjectiveinmind?
Okay,wecanmovenext.
So,Iwouldliketoknowhowourcompetitors’productsaredifferentiatedandhow
aretheypriced.
Itenjoysamarketshareofaround20%andthebigtwoplayerstogetherhold70%
ofthemarket.Theclientwantstoincreaseitsmarketshareto30%.
Iwouldliketostartwiththetoplinescenariofirst.Revenuecanbedividedintwo
heads-noofcustomersandrevenuepercustomer.Whatisthetargetedcustomer
segment.
75%ofourcustomersarefromurbanareaswhichaccountsfor85%oftotalsales.
Ourmarketseemstobehighlyconcentrated.Firstly,wewilltrytoincreasethe
customerbasebyeitheracquiringmorecustomersorretainingtheexistingones.
Wecantapruralareasasthereislotofpotentialforgrowthandwecanimprove
theinterfaceoftheappbyalgorithms.
Whatmajorchallengesclientwouldfaceinruralareas?
Fewpeopledonothaveaccesstointernetanddonotknowaboutourplatform.
Companymightfacelogisticissuesandruralpeoplearestillnotcomfortablewith
shoppingonline.
Okay,howcanweovercometheseissues?
Forincreasingcreditworthiness,wecanappointapersoninasignificant
populationvillagewhowillbecoordinatingthetransactionsandwillbethefaceof
organization.Forlogisticswecanpartnerwithlocaldeliverypartners.
OurcompetitoralsoprovidesserviceslikeUPIandOTTplatformwhichisavailable
freeofcost.Thecompetitorshavepricedtheirproductsconservatively.
Toincreasethecustomerretention,wehavetofocusonprovidingmultipleservices
onourplatformslikeourcompetitorsandasthisisacompetitivemarketwehave
towehavekeepourpricesatparwiththem.Wehavetoalsoworkonplatform
interfacebymakingitmoreuser-friendly.
Okay,goahead.
Nowwehavediscussedtherevenueside,wewillnowevaluatecostsidetostudy
thebottom-lineeffect.70%ofthecostinecommerceistowardsmarketing
(includingdiscounts)andlogistics.
Asdiscountsformedthemajorpartofmarketingandithelpstodrivecustomers
towardsecommerce,wewillhavetoincurtheseexpenses.So,toreduceour
expenses,weshallfocusonoptimizingoursupplychainandtrytoachievecost
efficiencyinourlogistics.
Okay,doyouwanttoaddanythingelse?
MyntrawasacquiredbyFlipkartanditknownforitssupplychain.Myntracanhave
accesstolargecustomerbaseandexistingsupplychainnetworkofFlipkart.
So,aswehavediscussedallthepoints,wecanclosethecase.
Thankyou,sir.Itwasniceinteractingwithyou.
Conundrum I IIM Ranchi
Growth Strategy
E-commercePlatform-InterviewTranscript
44

48. Case facts/ Notes
•Myntra holds 20% of
the market share and
two big players hold
70% market share.
•75% of the customers
are from urban areas
which accounts for 85%
of total sales.
•Competitors are also
providing services like
UPI and OTT platform.
Problem Statement
•Client is Myntra-an ecommerce platform.
•Formulate a 2 year growth strategy to increase their top line and bottom line.
Recommendations:
•Myntrashouldfocusonruralareastoexpandcustomerbaseandprovide
multipleservicesthroughsingleplatform.
•Itshouldoptimizeitssupplychaintoachievecostefficiency.
Growth
Strategy/Framework
Top line Bottom line
•Toplineandbottomlineapproacharethetwokeyaspectsformeasuringthe
changeinsalesandprofitability.
•PriorknowledgeofmeritsanddemeritsofM&Amighthelpinyourcase.
Key Takeaways:
Growth Strategy
Marketing
Costs
Logistics
Revenue
Revenue per
Customer
No. of
Customers
Platform
Interface
Pricing
Customer
Acquisition
Customer
Retention
Multiple
Services
E-commercePlatform
Conundrum I IIM Ranchi 45

49. GarmentManufacturer-InterviewTranscript
GrowthStrategy
YourclientisaGarmentManufacturerinIndiaandwantstoexpanditstopline.
Theyneedyoursuggestiontoachievethegrowthtargets.
So,beforewegetintothecase,Iwouldliketoaskfewpreliminaryquestionslike
whatisthemainobjectiveofclient. Whatwillbeyourdistributionstrategyforthepremiumbrand?
Astheclientisoneamongtop10players,wecanopenmorestoresindifferent
locationsandexpandourreach.Wecanalsolaunchapremiumbrandtoofferhigh
qualityproductsatapremiumpriceandexpandourcustomerbase.
Iwouldalsoliketounderstandabouttheproductofferings,pricesegmentwedeal
inandistheindustryfragmentedorconsolidated.
Clientwantstoincreasehisgrowthrateby30%.
Theclientisajeanmanufacturerknownforitsqualityproductataffordableprices.
Themarketishighlyfragmentedandweareamongthetop10players.
Okay,wecanachievethedesiredgrowthintwoways-organicgrowthwhichfocus
onincreasingtherevenuefromcustomersandinorganicgrowthwhichinvolves
M&Aandjointventures.Whichgrowthstrategyyouwantmetofocuson?
Wecandiscusstheorganicgrowthstrategies.
Sure,wewilldivideorganicstrategyintofurtherintotwosegments-numberof
customersandrevenuepercustomer.Toimprovethelatterwecanofferdiscounts,
engageloyaltyprograms.Toincreasethenumberofcustomers,wehaveto
strengthenourpositioningtoacquiremorecustomers.Wecandothisbylifestyle
marketingandchannelimprovement.
Okay,canyoucomeupwithanyotherway?
Wecanexpandourbusinessintermsofnewgeography,moreproductsandnew
customersegments.
Interesting,let’slookintothem.
WecanfocusonD2Candgowithomnichannelstrategy.Wecanleverageour
existingstoresandlaunchanewD2Cchannelasitoffershighermargins
Whatfactorswillyouconsiderforlaunchinganomnichannelforyourluxurybrand?
Iwouldconsiderthatourbrandconveysamessageofauthenticityandgood
experience,sothatcustomerscanrelatewiththebrand,haverobustpoliciesto
gaintheirtrustandinvestintechnologyandunderstandconsumerinsights.
Okay,howcanwebaseourdecisionstoexpandtootherregions?
Iwouldliketoconsiderthese4factors-sizeofthemarket,buyingpowerof
consumers,easeofsettingmanufacturingandcompetition.Thiswillhelpustodoa
costbenefitanalysis,whether,itwouldbefeasibletomovetootherregions.
IftheclientdecidestoexpanditsbusinesstoChina,whatwillbethechallenges?
Totakeourbusinessglobal,weneedtotakeseverallicensesandunderstandthe
presenceoflow-costcompetitors.Iwouldliketoknowwhethertheclientis
lookingonlyfordistributioninChinaoralsomovingitsproductionunits.
Whatshouldbethemoreprofitableoptionaccordingtoyou?
Weshallmoveourproductionunits,asitwillreduceourtotalproductioncosts.
Great.Wecanwrapupourcasehere.
Conundrum I IIM Ranchi 46

50. Case facts/ Notes
•Client is a jean
manufacturer and is
among top 10 leaders .
•Garment market is
highly fragmented.
•Client is known for its
good quality jeans at
affordable prices.
•Client looking to expand
its operations in China.
Problem Statement
•Client is a garment manufacturer in India.
•Devise a growth strategy to increase its growth rate to 30%
Recommendations:
•Clientshouldfocusonmarketinganditsdistributionforitsexistingcustomers
andexpandtonewgeographyandproductlineforitspotentialcustomers.
•Toimproveefficiencyclientcanorganizeloyaltyprogramandofferdiscounts.
RevenueStrategy/Framework
Organic
growth
Inorganic
growth
•TrytobringinsightswhicharerelevantincurrentmarketscenarioslikeD2C.
•Determinewithclaritywhethertheorganizationintendstoconcentrateon
increasingrevenuefromcurrentcustomersorattractnewconsumers.
Key Takeaways:
Growth Strategy
M & A
Joint Venture
Revenue per
Customer
No. of
Customers
Discounts
Existing
Markets
New markets
Loyalty
Programs
GarmentManufacturer
Marketing
Logistics
New
Geography
New product
line
Conundrum I IIM Ranchi 47

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governments, organizations, municipalities, groups and individuals -and ultimately provide them with resources to help
them make better choices. And with everyone making better choices, the world is a better place.”
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Conundrum –Consulting Club of IIM Ranchi
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