咨詢面試系列（2）：A1.T. Kearney案例分析

1、Firm: A.T. KearneyCase Number:Case setup (facts offered by interviewer):Your client is a manufacturer of bicyclesThey have been in business for 25 yearsThey manufacturer and sell three categories of bicycles:Racing bikes: High end, high performance bikes for sophisticated cyclistsMainstream bikes: D

2、urable, but not overly complicated bikes for everyday ridersChildrens bikes: Smaller, simpler versions of their mainstream bikes for childrenProfits at your client have decreased over the past five yearsQuestion:What is driving the decline in overall profits?What recommendations might correct the si

3、tuation?Suggested solutions:The first question is to determine what has caused overall profits to decrease. To accomplish this the candidate must first understand what has transpired in each of the three product categories over the past five years during which profitability has slipped. The followin

4、g are questions and answers that would be provided in an interview scenario.What are the clients margins for a bicycle in each of the three segments?Racing: Cost = $600/unit, Profit=$300/unitMainstream: Cost = $250/unit, Profit = $75/unitChildrens: Cost = $ 200/unit, Profit = $50/unitWhat has happen

5、ed to the market size of each of the three segments over the past five years?Racing: Has remained constant at its present size of $300MMMainstream: Has increased at 2% growth rate per year to its present size of $1.0BChildrens: Has increased at 3% growth rate per year to its present size of $400MMWh

6、at has happened to our clients market share in each of these segments?Racing: Market share has decreased from 60% to 30%Mainstream: Market share has increased from 0% to 5%Childrens: Market share has increased from 0% to 3% Who are the clients major competitors in each market segment? What has happe

7、ned to their market share in each segment over the past five years?Racing: There is one main competitor and a host of small firms. Your main competitor has increased market share from 30% to 50%Mainstream: There exist many, large competitors, none of which holds more than 10% of the marketChildrens:

8、 As in the mainstream segment, there are many competitors, none with more than 10% of the marketThe above information provides enough information to put together a picture of why profits have decreased over the past five years : Your client, with a commanding position in a flat market segment (racin

9、g), expanded into new segments (mainstream and childrens). As this occurred, market share decreased dramatically in the most lucrative segment (racing), creating an unfavorable mix. The extent to which profits have decreased can be deduced from some quick math : profits have slipped from $60MM five

10、years ago (=60% x $300MM x 33% racing margin) to $44MM today ( = (30% x $300MM x 33% racing margin) + (5% x $1B x 23% mainstream margin) + (3% x $400MM x 20% childrens margin).The dramatic decrease in market share in the racing segment is at this point still unexplained. Questions that would help fo

11、rmulate an explanation include:Have there been any major changes in product quality in your clients racing product? Or in its main competitors racing product?NoHave there been any major price changes in your clients racing product? Or in its main competitors racing product?NoHave there been any majo

12、r changes in distribution outlets for your clients racing product? Or for its main competitors racing product?Yes. Previously your client and its main competitor in the racing segment sold exclusively through small, specialty dealers. This remains unchanged for the competition. Your client, however,

13、 began to sell its racing bikes through mass distributors and discount stores (the distribution outlets for mainstream and childrens bikes) as it entered the mainstream and childrens segment.How do the mass distributors and discount stores price the racing bikes relative to the specialty stores?Pric

14、es at these stores tend to be 15 to 20% less.What percent of your clients racing sales occur in mass distributors and discount stores?Effectively none. This attempt to sell through these distributors has failedHow has the decision to sell through mass distributors and discount stores affected the im

15、age of the clients racing product?No studies have been done. How has the decision to sell through mass distributors and discount stores affected your clients relationship with the specialty outlets?Again, no formal analysis has been performed.Although some analysis and/or survey should be performed

16、to answer more conclusively the last two questions, a possible story can be put together. There has been no appreciable change in either quality or price (or any other tangible factor) of your clients racing product relative to its competition. It is not the product that is the problem, but rather i

17、ts image. As your client came out with lower end, mainstream and childrens products and began to push their racing segment through mass distributors and discount outlets, their reputation was compromised. Additionally, the presence of the racing products in the discount outlets has put your historic

18、 racing distributor (the specialty shops) in a precarious position. The specialty shops must now lower price to compete, thereby cutting their own profits. Instead, they are likely to push the competitions product. Remember, your client has no direct salesforce at the retail outlets. The specialty s

19、hops essentially serve as your clients sales force.The above analysis offers an explanation of what has affected the top side of the profitability problem. Still to be examined is the cost, or bottom side, of the profitability issue. Questions to uncover cost issues would include:How does the client

20、 account for its costs?The client has a single manufacturing and assembly plant. They have separate lines in this facility to produce racing, mainstream and childrens products. They divide their costs into the following categories: labor, material and overhead. Overall costs have been increasing at

21、a fairly hefty rate of 10% per year.What is the current breakdown of costs along these categories for each product segment?Racing: Labor = 30%, Material = 40%, Overhead = 30%Mainstream: Labor = 25%, Material = 40%, Overhead = 35%Childrens: Labor = 25%, Material = 40%, Overhead = 35%How has this mix

22、of expenses changed over the past five years?In all segments, labor is an increasing percentage of the costs. Does the basic approach to manufacturing (i.e. the mix of labor and technology) reflect that of its competition?Your client tells you that there is a continuing movement to automate and util

23、ize technology to improve efficiency throughout the industry, but it is his/her opinion that their approach, maintaining the “human touch”, is what differentiates them from the competition. (Unfortunately, hes right!)Is the workforce unionized?YesWhat is the average age of the workforce?52 and climb

24、ing. There is very little turnover in the workforce.What is the present throughput rating? How has it changed over the past five years?Presently the plant is producing at about 80% of capacity. This has been decreasing steadily over the last several years.What is the typical reason for equipment shu

25、tdown?Emergency repairDescribe the preventive maintenance program in effect at the clients facility?Preventive maintenance is performed informally based on the knowledge of senior technicians.How often has equipment been replaced? Is this consistent with the original equipment manufacturers recommen

26、dations?The client feels that most OEM recommendations are very conservative. They have followed a philosophy of maximizing the life of their equipment and have generally doubled OEM recommendations.The above information is sufficient to add some understanding to the cost side of the equation. Your

27、client has an aging workforce and plant that is behind the times in terms of technology and innovation. This has contributed to excessive breakdowns, decreased throughput, increased labor rates (wages increase with seniority) and greater labor hours (overtime to fix broken machines).In proposing rec

28、ommendations to improve the clients situation, there is no single correct approach. There are a number of approaches that might be explored and recommended. The following are some possibilities:Abandon the mainstream and childrens segment to recover leadership in the racing segmentIssues to consider

29、 in this approach:How much of the racing segment is “recoverable”?What are the expected growth rates of each segment?How badly damaged is the relationship with the specialty outlets?Are there alternative outlets to the specialty shops such as internet sales?How will this move affect overall utilizat

30、ion of the operating facilities?Maintain the mainstream and childrens segment, but sell under a different nameIssues to consider in this approach:Is there demand among the mass and discount distributors for bicycles under their name?What additional advertising and promotions costs might be incurred?

31、What are the expected growth rates of each segment?What is driving the buying habits of the mainstream and childrens market?Reduce costs through automation and innovationIssues to be considered:What technological improvements are to be made?What are the required investments? What are the expected returns on those investments?How will these investments affect throughput?To which lines are these investments appropriate? Are the mainstream and childrens segments potentially “over-engineered”