CONSULTING CASEBOOK

2024-25
Preface

Consulting Case Book, Strategist, MDI Gurgaon.

© 2024, Strategist, MDI Gurgaon.
All rights reserved.

Notice
No part of this document shall be reproduced or transmitted in part or in full, in any form or by any means –
electronic or mechanical, including photocopy, recording, transcription or any information storage and retrieval
system – without full and formal approval from Strategist, MDI Gurgaon.

First Edition: July 2021

Edition Authors: Aman Pratik, Himanshu Jain, Manjunath S Sastry

Second Edition: July 2022

Edition Authors: Aman Sikka, Indrasom Sinha, Smarajeet Das

Third Edition: July 2023

Edition Authors: Aarushi Mahawar, Piyusha Agrawal, Zain Rizwan

Fourth Edition: June 2024

Edition Authors: Mehul Choudhary, Naman Jain, Sarthak Bansal

© Management Development Institute, Gurgaon | 2024- 2025 2

Acknowledgement

The fourth edition of MDI Gurgaon’s Consulting Case Book, brought to you by Strategist, is the outcome of
consistent and coordinated efforts across the student and alumni community at MDI Gurgaon.

We would like to extend our sincere gratitude to Mehul Choudhary, Naman Jain and Sarthak Bansal for their
continued guidance and support to publish Strategist Casebook 2024-25. We would also like to thank
Sanskriti Dhandhania for her constant support in designing the Strategist Casebook 2024-25.

We have the PGP batches of 2020-22, 2021-23, 2022-24, 2023-25 to thank, for sharing their valuable
interview experiences and helping us produce the case transcripts that form a critical aspect of the Case
Book.

We are grateful to the alumni of Team Strategist, who have helped us review the content of the Casebook
and fine-tune its delivery. We would also like to thank the entire Team Strategist '25 for their continuous
support.

Strategist – The Strategy and Consulting Club

MDI Gurgaon

© Management Development Institute, Gurgaon | 2024- 2025 3

Authors

Mehul Choudhary Naman Jain Sarthak Bansal

(PGDM 23-25) (PGDM 23-25) (PGDM 23-25)

B.Tech: Chemical B.A. Economics Hons. B.Tech: Mechanical

Work-ex: Merilytics, Axxela Work-ex: ZS Associates, EY Work-ex: CDFI, ViewZen Labs

Summer Internship Summer Internship Summer Internship

Deloitte India Deloitte USI (Strategy) American Express

© Management Development Institute, Gurgaon | 2024- 2025 4

Content
Sl. No Particulars Page No. Sl. No Particulars Page No.

1 Consulting Primer 3.2.6 Case 5: Chinese Footwear Retailer 31

1.1 Consulting Overview 9 3.2.7 Case 6: Polyfilm Manufacturer 34

1.2 Frequently Used Concepts 10 3.2.8 Case 7: Electric Motors 36

2 Business Concepts and Ideas 3.2.9 Case 8: Hospital Chain 39

2.1 The 3C-P Framework 12 3.2.10 Case 9: Private Sector Bank 41

2.2 The 4P Framework 13 3.2.11 Case 10: 24/7 Store 44

2.3 Porter’s Five Forces 14 3.3 Market Entry

2.4 The BCG Matrix 15 3.3.1 Market Entry Framework 47

2.5 The Ansoff Matrix 16 3.3.2 Case 1: E-commerce 48

3 Frameworks and Cases 3.3.3 Case 2: Luxury Yacht Manufacturer 52

3.1 Approaching Case Interviews 18 3.3.4 Case 3: Li-Ion Batteries 55

3.2 Profitability 3.3.5 Case 4: Industrial AC Manufacturer 59

3.2.1 Profitability Framework 19 3.3.6 Case 5: High-End Fashion Retail 61

3.2.2 Case 1: Ice Cream Manufacturer 21 3.3.7 Case 6: Music Company 64

3.2.3 Case 2: Chemical Manufacturer 24 3.3.8 Case 7: Automobile Manufacturer 66

3.2.4 Case 3: Cooking Oil 26 3.3.9 Case 8: Hotel Chain 69

3.2.5 Case 4: Pump Manufacturer 29 3.4 Pricing

© Management Development Institute, Gurgaon | 2024- 2025 5
Content
Sl. No Particulars Page No. Sl. No Particulars Page No.

3.4.1 Pricing Framework 72 3.6.4 Case 3: Autonomous E-bike 107

3.4.2 Case 1: Fertilizers 73 3.6.5 Case 4: Anti Depressant 110

3.4.3 Case 2: Multi-purpose Furniture 75 3.6.6 Case 5: In-Flight Connectivity 113

3.4.4 Case 3: Hotel Business 78 3.6.7 Case 6: Men’s Magazine 116

3.4.5 Case 4: Pharmaceuticals Company 81 3.7 Growth Strategy

3.5 Merger and Acquisition 3.7.1 Growth Strategy Framework 118

3.5.1 Merger and Acquisition Framework 84 3.7.2 Case 1: International School 119

3.5.2 Case 1: Airline Acquisition 86 3.7.3 Case 2: Beverage Company 121

3.5.3 Case 2: Brand Integration 89 3.7.4 Case 3: Magic Show Company 124

3.5.4 Case 3: Buy-side DD (Due Diligence) 91 3.8 Unconventional cases

3.5.5 Case 4: Sell-side DD (Due Diligence) 94 3.8.1 Case 1: Manufacturing Plant 127

3.5.6 Case 5: Alliance Formation 96 3.8.2 Case 2: Retention rate 129

3.5.7 Case 6: Jewellery Acquisition 98 3.8.3 Case 3: HR Service Provider 131

3.6 New Product Launch 4 Guesstimates

3.6.1 New Product Launch Framework 100 4.1 Approaching Guesstimates 135

3.6.2 Case 1: Nicotine Gums 101 4.2 Example: Basic Guesstimate 136

3.6.3 Case 2: EV Manufacturer 104 4.3 Example: Solving via Supply & Demand 137
© Management Development Institute, Gurgaon | 2024- 2025 6
Content
Sl. No Particulars Page No.

4.4 Factsheet 138

4.5 Guesstimate 1: Fuel Consumption 139

4.6 Guesstimate 2: Maruti Suzuki Cars 140
4.7 Guesstimate 3: Mobile Recharge 141

4.8 Guesstimate 4: Cars on Mumbai Sea Link 142

4.9 Guesstimate 5: Metro Ridership 143

4.10 Guesstimate 6: Lakes in the World 144

4.11 Guesstimate 7: AC working hours 145

4.12 Guesstimate 8: Length of roads in Delhi 146

4.13 Guesstimate 9: Cold Drink Consumption 147

4.14 Guesstimate 10: T-shirts sold on Amazon 148

4.15 Guesstimate 11: Size of Tyre Industry 149

4.16 Guesstimate 12: Sports Shoes Market 150

4.17 Guesstimate 13: WhatsApp Messages 151

4.18 Guesstimate 14: People flying in/out from Delhi 152

Navigation Tip:
4.19 Guesstimate 15: Sauces sold in Europe 153 Cases for each section progress from beginner to advanced
levels.
Connect with Us! 154
© Management Development Institute, Gurgaon | 2024- 2025 7
01 Consulting Primer

02 Business Concepts and Ideas

03 Frameworks and Cases

04 Guesstimates
H
Shape

H Consulting Primer
Description automatically generated with low
confidence

Consulting Overview

What is Consulting?
• Consulting means being “engaged in the business of giving expert advice and recommending solutions to people working in
specific fields”

• Typical focus areas of consulting include business strategy, project and product management, organizational processes, operations
management, and technology enablement

Problem solving process for a business case

Develop issue
Define the Structure the Conduct Synthesize Develop
Prioritize issues and analysis
problem problem analyses findings recommendation
plan

❑ Think impact: ❑ Think ❑ Think speed: ❑ Think ❑ Think ❑ Think “so ❑ Think potential
What do we disaggregation Which issues efficiency: evidence: what”: What solution: What
need to know? and early are most Where and how What are we implications do should we do?
hypothesis: important to should the trying to prove our findings
What could be the problem? team spend its / disprove? have?
the key elements time?
of the problem?

How to ace consulting?

To excel in consulting, focus on expertise, problem-solving, communication, client-centricity, teamwork, adaptability, time
management, innovation, presentation skills and networking

© Management Development Institute, Gurgaon | 2024- 2025 9

H
Shape

H Consulting Primer
Description automatically generated with low
confidence

Frequently Used Concepts

MECE (Mutually Exclusive, Collectively Exhaustive) Initial Hypothesis based Problem Solving
• “Mutually Exclusive” means that one factor does not overlap with the • Once the problem is structured leveraging MECE ideas, Initial
other and “Collectively Exhaustive” means that several components Hypothesis (IH) is used
together complete a larger factor • Once the IH is verified, you can then move deeper in the analysis
• In a business case, at every level, the factors should be MECE. They to focus on one (or multiple) area(s) the IH was pointing to
should constitute (n-1) level completely & do not impact each other • If it turns out to be wrong, you would have acquired ample
• For eg: While dividing profit, revenue and cost are the MECE factors knowledge to arrive at the correct hypothesis

L0 Profit Defining the Generating the Testing the Initial

Initial Hypothesis Initial Hypothesis Hypothesis

L1 Revenue Cost
3-step process to proceed with Initial Hypothesis

L2 Distribution Sales &

No. of units Price / unit R&D Manufacturing
& Logistics Marketing
80/20 Rule – The Pareto Principle (Rule)
• According to 80/20 rule (also known as the Pareto Rule), 20% of
These factors constitute Cost has been broken down using a value chain
the factors result in the 80% of the results
revenue completely and approach. These factors complete the value chain
do not impact each • In business, it is used to identify the big fish and helps consultants
and do not impact each other
other filter through noise and identify high impact areas
• For eg: 80% of the profits come from 20% of the customers

Tip: While segmenting, try to ensure that the number of

segments is neither less than 2 nor more than 5 (3 or 4 is ideal) It is important to have a good understanding of these principles as
these help develop an initial hypothesis and structure the problem.
© Management Development Institute, Gurgaon | 2024- 2025 10
01 Consulting Primer

02 Business Concepts and Ideas

03 Frameworks and Cases

04 Guesstimates
H
Shape

H Business Concepts and Ideas

Description automatically generated with low
confidence

The 3C-P Framework

3C-P

Customers Company Competition Product

▪ Core Competencies – ▪ Number and Market Share of ▪ Product Specifications

▪ Identifying the Customer -
Business Line, Products and Competitors
Services ▪ Product Positioning
✓ Customer Segments and
▪ Industry Structure, Trends,
Personas
▪ Vertical Capabilities – Behaviour, and Best Practices
▪ Product Differentiation –
Sourcing and Selling Blue Ocean, Red Ocean, or
✓ Compare current customer
▪ Minimum Viable Product Whitespace
metrics with the past
▪ Capital Allocation – Core (MVP) and Unique Selling
Activities, R&D, CSR Propositions (USPs) of
competitors and the company ▪ Power of Substitutes
▪ Customer Needs

▪ Financial Situation and Key ▪ Brand Equity of the Product

▪ Price Sensitivity and Metrics (Ratios) ▪ Power of Suppliers and
Distributors – risk of brand dilution
Willingness to Pay

▪ Organizational Structure ▪ Product Lifecycle

▪ Bargaining Powers and Culture ▪ Regulations & Governance

© Management Development Institute, Gurgaon | 2024- 2025 12

H
Shape

H Business Concepts and Ideas

Description automatically generated with low
confidence

The 4P Framework

4P’s

Product Price Place Promotion

▪ Product Specifications ▪ Price Elasticity (sensitivity) ▪ Distribution Channels ▪ Objective of Promotion –

of the product (retail, wholesale, online, message to consumers
omnichannel)
▪ Product Positioning
▪ Target consumers and their ▪ Promotion Strategy: Pull vs
willingness to pay ▪ Alignment of channels with Push
▪ Product Differentiation – company’s strategy and
Blue Ocean, Red Ocean, or capabilities
Whitespace ▪ Customers’ perceived value ▪ Metrics to identify the
of the product effectiveness of campaigns
▪ Role of each of the
▪ Power of Substitutes intermediaries in the value
▪ Customers’ intention to chain ▪ Building long term
switch and ease of relationships with customers
▪ Brand Equity of the Product
– risk of brand dilution switching
▪ Company’s control over its
distribution channel ▪ Barriers to communication

▪ Product Lifecycle ▪ Historical pricing & price of

the substitutes ▪ Budget allocated to promotion

© Management Development Institute, Gurgaon | 2024- 2025 13

H
Shape

H Business Concepts and Ideas

Description automatically generated with low
confidence

Porter’s Five Forces

Porter’s Five Forces tool was created by Harvard Business School professor Michael E. Porter, to analyze an industry's attractiveness and likely
profitability. The forces (as mentioned below) are used to assess market attractiveness both for new entrants and existing
companies/incumbents. In general, the stronger the five forces are, the less attractive is the industry.

Each of Porter’s Forces increases as the following factors become more prominent

Buyer’s Bargaining Supplier’s

Industry Rivalry Threat of Substitutes Barriers to Entry
Power Bargaining Power

▪ Number of competitors ▪ Availability of ▪ Economies of scale ▪ Less number of ▪ Contribution to quality

substitutes powerful buyers
▪ Size of competitors ▪ High capital ▪ Contribution to cost
▪ Low switching cost requirement ▪ Lower switching cost
▪ High fixed cost ▪ High in switching cost
▪ Relative benefits of ▪ Product differentiation for buyers for the company
▪ Lower product
substitutes ▪ Substitutes’ availability
differentiation ▪ Regulatory constraints ▪ Suppliers’ threat to
▪ Higher buyer’s ▪ Low product forward integration
▪ Brand recognition ▪ Brand recognition
propensity to differentiation
▪ Highly specialized adopt/experiment with ▪ Hard to access
▪ Buyers’ ability to
assets substitutes distribution channels
integrate backward
▪ Barriers to exit ▪ High switching cost for
▪ High price elasticity
customers

Tip: Don’t use Porter’s Five Forces analysis as a forced approach to solving a specific case. Instead, you should resort to the forces with a
bigger, more general framework (e.g., cost benefit analysis, market entry analysis and so on)

© Management Development Institute, Gurgaon | 2024- 2025 14

H
Shape

H Business Concepts and Ideas

Description automatically generated with low
confidence

The BCG Matrix

Created by the Boston Consulting Group, the BCG matrix – also
known as the growth share matrix – provides a strategy for Matrix Strategy To Be
Description
analyzing products according to their growth potential and Element Adopted/Action Plan
relative market share.

Monopolies and First to Invest, Innovate,

Stars
Market Products Improve

High
Currently doing well with
Strengthen and
Cash Cows limited opportunities in
Leverage
Market Growth the future

Weak in the markets and

Dogs/Pets Liquidate and Exit
Low difficult to turn around

Uncertainties that can

Question Invest and push to
either becomes Stars or
Marks Stars/Exit as Dogs
High Low Dogs

Market Share
Example

Tip: Use the BCG Matrix to analyze product portfolios and Apple Inc. would classify the iPhone as a Star, iWatch and Apple
strategic decisions. The application can also be extended to TV as Question Marks, the iPad as a Cash Cow, and the iPod as a
cost analysis and new product development. Dog/Pet.

© Management Development Institute, Gurgaon | 2024- 2025 15

H
Shape

H Business Concepts and Ideas

Description automatically generated with low
confidence

The Ansoff Matrix

The Ansoff Matrix, also known as the product/market expansion
grid, helps lay out strategies for organizational growth. The Matrix Strategy To Be
Description
matrix posits a cost – benefit tradeoff analysis highlighting whether Element Adopted/Action Plan
the company should focus on new products or on new
markets.
Price Cuts, Increased
Market Increasing sales volumes
Promotion,
Penetration to existing customers
Acquisitions

New Market New Market Entry

Diversification Entering new markets
Markets Development (Domestic and
Market and selling to new
International), Market
Market Development customers with existing
and Customer
Axis products
Segmentation
Existing Market Product
Markets Penetration Development Identifying new lines of R&D, Investment, M&A
Diversification
business (Related or Unrelated)

Existing New
Products Products Develop and introduce R&D, Development,
Product new products into Collaboration and
Development existing markets and Partnerships, Inorganic
Product Axis customer bases Growth

Within the Ansoff matrix, moving up the market axis, and

moving right on the product axis is an indication of increasing Tip: Use the Ansoff Matrix to critically identify growth
organizational risk. New Products and New Markets are opportunities for the organization. Based on the organization's
always considered uncertain and hence increase the associated priorities, focus either on market or product strategies.
strategic risks.

© Management Development Institute, Gurgaon | 2024- 2025 16

01 Consulting Primer

02 Business Concepts and Ideas

03 Frameworks and Cases

04 Guesstimates
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Approaching Case Interviews

Step 1 Step 2 Step 3 Step 4

Understanding Case Developing Framework Analyses Recommendations & Closure

▪ Listen to the case carefully ▪ Provide roadmap before ➢ Structure your analyses well ▪ Summarize the case in the end
embarking on in-depth analysis
▪ Reiterate your understanding ▪ Probe for more information ▪ Final recommendation must be
▪ Start with high level questions ▪ Every case is unique and no and data points backed by supportive arguments
one perfect framework fits all ▪ Talk the interviewer through ➢ Address the risks & next steps
▪ Ask specific questions as you
the calculations
move along in your analyses ➢ Leverage the MECE principle
▪ Perform sanity checks
➢ Do not arrive at solutions and
conclusions at this point

Dos Don'ts

▪ Make sure to explain the reasons behind the choices ▪ Don’t rush into the analysis

▪ Take time to organize the thoughts and ideas ▪ Don’t stick to a standard framework at all times

▪ Be transparent about the thought process ▪ Don’t defend your solution at all costs; be accommodative

▪ Make quick calculations to form & guide decisions ▪ Don’t assume that a case that sounds familiar

▪ Conversational skills matter - Engage with the interviewer

© Management Development Institute, Gurgaon | 2024- 2025 18

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Framework

Framework

Profit

Split Profit into Revenues and

Revenue Cost Costs as per the framework and
dig deeper into each driver

For Costs, clearly lay out the

# of Units Sold Price per Unit Fixed Variable Unusual value chain of the process to
ensure you do not miss out on
any factor
❑ Internal ❑ Internal ❑ Example ❑ Example ❑ Example
Awareness Increased costs Depreciation Raw Material Write Offs
For Revenue, in addition to
Accessibility Transfer pricing Salaries Maintenance Standard Costs volume & price, also look at the
Availability Utility Expense Expenses product mix
Affordability Insurance Fuel Cost
❑ External
Price Wars Fixed and variable cost based
❑ External Distributor approach might not be MECE,
Economic Cycle Margin Reg. leverage the value chain analysis
Regulations Price Caps Cust.
in such cases
Competitors Sentiments
Industry Trends Supply Balance Basic accounting principles of
Geography costing and allocations might
come in handy while analysing
costs in detail
High Level Analysis

❑ Reiterate the problem to have a clear understanding of the case

❑ Use the 3C-P framework to develop ideas about the customer, the company and its capabilities, the competitive landscape and product/product portfolio
❑ Understand the timelines and context better – Since when is the company facing these issues? Is it an industry wide trend or is it specific to the company?

© Management Development Institute, Gurgaon | 2024- 2025 19

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Framework

Value Chain Approach

Planning Raw Material Processing Storage Transportation Distribution Customer Service

❑ Example ❑ Example ❑ Example ❑ Example ❑ Example ❑ Example ❑ Example

Forecasting Bulk Deals Machines LIFO/FIFO Inbound Log. Sales Channel Return Cost
Technology Alt. suppliers Labour Warehousing Outbound Log. Sales Personnel AMC
Equipment Plan Capacity Util. Network used Model used Replacement
Cost of Finance Packaging Mode used Marketing Tech. Spare Parts
Employee Train.

High Level Analysis

❑ Value chain approach is an exhaustive way of looking at costs involved in a product/service
❑ The idea is to split costs from the time of Raw material procurement to Customer service.
❑ This level of analysis can be done for both products & services.

P&L Approach
Types of Expenses

Cost of Sales SG&A Marketing R&D Interest, Taxes, Others

❑ Direct cost of ❑ All costs not ❑ Usually covered ❑ Costs incl. ❑ Expenses
producing goods directly related under SG&A development of usually with
to production of Expense the concept & more external
❑ Purchases +
business’s testing of new influence
Beginning Inv. – ❑ Expense related
goods/ services products
Ending Inv. to promotion

© Management Development Institute, Gurgaon | 2024- 2025 20

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 1: Ice Cream Manufacturer

Industry Manufacturing

Level Beginner

Prompt: Your Client is a Mumbai based Ice-Cream manufacturer. They are struggling with their profitability and have approached you to analyze their problem. You need to
identify the key issues and come up with recommendations.

Sure! I would like to start by understand more about the company. Is it only the Sure. The value chain for an ice cream manufacturer could be - Raw Material
manufacturer or the seller as well? Is it a franchise or an independent self run Procurement & Supplier >> Inbound Logistics >> Manufacturing >> Outbound
business? And what customers does it target? Logistics >> Distributors >> Retailers >> Customers
It is an independent self run business. It is both in the manufacturing and selling That’s good. How would you assess the demand for ice-cream?
business. The target customers can afford mid to premium price range products.
We can use historical data to forecast the demand, accounting for variations.
Is the problem specific to the client or is it an industry wide problem?
And based on this forecast you would be placing your order to your suppliers.
The problem is specific to the client. Where in the value chain do you think demand forecasting and placement of order
Can I also have an idea about the timelines? Since when are we facing this issue? would take place?

The client has observed this issue since past 2 months. It would be at the beginning of the value chain.

Have there been any price cuts in the product categories? Yes. It is at the beginning. Go ahead with your analysis.

No. The prices have remained the same. From supply side, we can consider the issues like availability of raw materials,
issues with inventory management, availability of vendors, and capabilities of
Okay. My understanding is that there could be two aspects to the issue. One is the employees to handle large customer base. The client could have also bought
demand side that could be affecting the revenue and other is the cost side. Since additional utilities for a forecasted rise in demand.
ice cream has seasonal/cyclic demand, has the profitability issue come up due to
these fluctuations? Are we looking at a low demand period? Manufacturing costs have remained the same and employees are able to handle the
customer demand.
No, the demand is as expected, like in the previous years. It is the peak of
summer, so the demand is high. Okay. I would then start with inbound logistics and move ahead. The major raw
material for ice cream is milk. Wrong demand forecast could lead to excess supply
Understood. Then it could be an issue with the rising cost of production. I would
of milk. Since the milk has a short shelf life, there could be wastage of milk, leading
like to explore the costs. It could be fixed costs like rent of the store, cost of raw
to additional costs and decreased profits.
materials, cost of new utilities for manufacturing or salaries of the employees. Has
any of these increased?
Alright. Can you think of other external reasons as why wastage of milk could be on
Before I tell you that, could you walk me through the value chain of our client? the rise?

© Management Development Institute, Gurgaon | 2024- 2025 21

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 1: Ice Cream Manufacturer

Industry Manufacturing

Level Beginner

Other reasons could the transportation time of milk being hire – leading to bad
product reaching the client. It’s also possible that there might be wastage arising
out of spillage of milk if the inbound logistics are not robust.

Yes. You have arrived at the solution. Two months ago, the company had switched
the milk vendor and it was taking more time for the milk to reach the destination
and as a result, the milk was going bad, as you have rightly pointed out. Can you
also tell me few KPIs to benchmark the operational capabilities of the client?

Sure. The KPIs could be delivery time, shipping time, shelf life of the product, order
accuracy, and inventory turnover.

Okay. Thank you. We can close the case here.

© Management Development Institute, Gurgaon | 2024- 2025 22

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 1: Summary

Prompt: Your Client is a Mumbai based Ice-Cream manufacturer. They are struggling with their profitability and have approached you to analyze their
problem. You need to identify the key issues and come up with recommendations.

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?

Company Specific Profit
▪ Concentrated and to the point
▪ Timeline clarifying questions
Past 2 months
▪ Quickly switching to value Revenue¹ Cost
▪ Affected by chain analysis
Internal/External factors
▪ Customization of value chain
Internal Raw
based on interview flow Price Quantity Forecasting Logistics Manufacturing³ Distributors⁴ Retailers⁴
▪ Revenue Trend Material²
Common Mistakes
Constant Revenue
▪ Direct assumption that
▪ Cost Trend Inbound Outbound⁴
demand might be a problem
Increased
considering seasonality
▪ Raw materials and
▪ Ask more questions about
manufacturing costs have
costs before directly splitting
remained stagnant
into fixed & variable
▪ Existing employees are able
to handle the current demand
▪ Inbound transportation time
has increased

Recommendations Uninvolved Branches

Conclusion: Recent change in the client’s logistic partner caused the 1. As the demand and price were constant, neglecting revenue side analysis
delay in delivering milk that resulted in wastage and in turn increase in 2. ”No issue with the availability of Raw Material” – mentioned in the case itself & Interviewer wanted to go
costs one step before raw material sourcing
3. Manufacturing costs remained the same
Short Term Recommendation
4. Not been explored in the case
▪ Work with an existing delivery partner to analyse the reason for the
delay – route, distance, operational efficiency
Long Term Recommendation
▪ Explore switching to a different delivery partner
▪ Increase investment in logistic management

© Management Development Institute, Gurgaon | 2024- 2025 23

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 2: Chemical Manufacturer

Industry Manufacturing

Level Beginner

Prompt: Your Client is a chemical manufacturer company which produces chemical used in food preservation. The client has been observing decline in profits since the past
3 years. How can you help them identify the root cause & recommend next steps?

Okay. I would start with enquiring about the overall industry. How many Okay. So lets go back to the revenue. You mentioned that the overall industry is on
competitors are there in the industry? What market share does the client hold? Is a decline due to changing consumer behaviour. Could this be due to the rising
the problem of declining profits specific to the client or is it across the entire awareness of healthier food alternatives which has caused consumers to shift away
industry? from foods which use alternative preservatives?
The client has increased their market share from 30% to 40% over the last 2
years. The number of competitors have been on a decline as the issue of Yes, that is correct.
declining profitability is across the entire industry.

Great! Profitability is defined as the difference of revenue and cost. I would focus Since the market is on a decline, what about the makers of such food? Have they
on the revenue first. also experienced a decline? If yes, have they been forced to lower prices?

Go ahead. Yes, the revenue of food manufacturers is also declining. Since they hold a strong
leveraging power, they have been able to renegotiate a new contract with reduced
Revenue further can be split as average revenue per order multiplied by the volume
prices of raw materials.
of orders. Do we have any information about the change in these 2 metrics?
Okay. So due to renegotiated prices, the revenue per order of the client has
The revenue per order has declined whereas the total volume of orders have declined and the costs have remained same. This has contributed to the decline in
increased recently. The overall market including the client’s business is on a profitability.
downwards trend due to changing consumer behaviour.
That is correct. What would you recommend to the client?
Got it. So the entire market is declining but we are declining at a lower pace than
the market, hence the rise in our market share as compared to competitors.
So, my recommendations would be to analyse the costs first. If there is any
Yes. That is correct. possibility to further reduce costs, that would help the client increase their
profitability. If not, the client should work with other competitors to renegotiate
Alright, next I would like to understand about the costs. Have the costs changed for contract prices to raise prices of chemical products.
the client? The client can also diversify their product portfolio and reduce the over-reliance on
food preservatives industry. The client can look for synergies in other industries
The costs have remained constant. which require such chemicals and venture into those possibilities.

© Management Development Institute, Gurgaon | 2024- 2025 24

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 2: Summary

Prompt: Your Client is a chemical manufacturer company which produces chemical used in food preservation. The client has been observing decline in profits
since the past 3 years. How can you help them identify the root cause & recommend next steps?

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?

Industry Specific Profit
▪ Comprehensive questions
▪ Market share
▪ Quickly asking about revenue
Increased market share from
and cost sides
30% to 40% over last 2 years
▪ Relating the increase in
▪ Revenue Trend Revenue Cost¹
market share to client’s
Decline in revenue
decline rate being slower than
▪ Cost Trend industry rate
Constant costs
Common Mistakes
▪ Total number of orders have Price Volume2
▪ Not splitting price into
increased
different branches
▪ Rising awareness of healthier
▪ Quickly jumping on possible
food alternatives
reasons without evaluating all
▪ Food manufacturers have the options External Internal
renegotiated to reduce prices
Factors Factors3
of raw materials
▪ Client’s decline rate is slower
than industry rate

Recommendations Uninvolved Branches

Conclusion: Food manufacturers due to decreased revenue have 1. As the costs were constant, neglecting cost side analysis
renegotiated to reduce prices of raw materials due to which the revenue 2. The total volume of orders has increased and hence, does not contribute to lower profitability
of the client has declined 3. Since the problem of declining revenue was industry specific, the internal factors while evaluating decrease
in prices was neglected
Short Term Recommendation
▪ Analyse and reduce costs to increase profits
Long Term Recommendation
▪ Lobby with competitors to raise the prices of chemical preservatives
▪ Diversify portfolio and look out for opportunities in other industries

© Management Development Institute, Gurgaon | 2024- 2025 25

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 3: Cooking Oil

Industry FMCG

Level Beginner

Prompt: Your Client is India’s major cooking oil processing and packaging company. It has observed a reduction in its operating profits. Can you find out why this is and
come up with suitable recommendations.

Sure! I would like to start with few questions to get my understanding right. For
No, you’ve mostly got it covered. You can focus on the packaging aspect because
how long has the client experienced declining profits?
traditionally, the producer has packaged the cooking oil in 1 litre packets. Recently,
The company has been seeing a decline since the past 6 months. in response to demand from the market, the producer purchased a machine that
packages the cooking oil in plastic gallons of 2 litres each.
Okay. Have our competitors also faced a similar decline in profits? If yes, there
could be external factors impacting the profits. Otherwise, it could be an issue
specific to our client. Okay, this is interesting. The machine could be a one-time investment which should
be recovered with time. However, as you mentioned, we are facing a steady decline
No, only our client is facing this issue. in profits with the rise in sales. So, we might not be making profits on the packet of
oil we are selling. The contribution margin could be negative. Can I know the price
And what other businesses is the client into? Are those businesses also impacted? at which we are selling the 1 litre packet and the 2 litre gallon?
The client is also into other FMCG products. But let us focus on their cooking oil
business and the potential problems they are facing. For 1 litre packet, the company is charging ₹150. For 2 litre gallon, the producer
figured he would provide an incentive to buy by selling them at ₹270 per gallon.
Okay I will begin my analysis by breaking down profits for the business into its
component parts: Revenues and Costs. Based on where the issue lies, I would like
How was the cost of the new equipment accounted for in the price?
to look at various internal and external factors. Does this sound okay?
Yes, sure go ahead. The producer has raised the price from ₹120 to ₹150 for the one litre packet.

Have we noticed any declining trend in the revenue? Okay but the increase in price have not impacted the sales. In fact, the sales have
No. The sales have continued to grow but as sales have increased, the profits have increased. What about cost of packaging? Does it cost the same to package the
declined steadily. cooking oil in packet as it does in gallons?

Okay. So there appears to be an issue with the cost. I will look at the steps in the
Well, not really. For the gallon we use a superior quality and higher quantity of
value chain and narrow down the possible areas where the costs may be rising. For
plastic. Also, we had to hire more experienced labour to operate the machine
a cooking oil producing company, the value chain can be broken into raw material
because it is more complicated than the packaging machine. We figured that
procurement, processing, packaging, storage, distribution and retail. Additionally,
because the demand was higher for the gallons – we would cover our costs through
there will be logistics between these processes. Is there any step that I am missing
increased volume.
and you would like me to focus on?

© Management Development Institute, Gurgaon | 2024- 2025 26

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 3: Cooking Oil

Industry FMCG

Level Beginner

How are we calculating the overhead costs?

All costs for the factory are added together and divided by the number of units
produced.

This looks like an issue with cost allocation. The price of the plastic gallons should be
higher due to higher costs of packaging. Now we need to see to what extent this is
affecting the profits.

Sure. Go ahead with your assessment.

What is the split between sales of 2 litre gallon versus 1 litre packets?

From the time the 2-litre gallon has come into the market, people are preferring that
over the packet. Of the overall sales volume, the 2-litre gallon’s contribution is 60%.

Even though it costs more to package in the gallons, yet the price is not higher on a
per litre basis. In fact, it's lower. Therefore, more the 2-litre gallon we sell, the more
would be the decline in profits.

Yes, that is an excellent observation. What do you recommend?

The price on per litre basis for the gallon packaging should be higher than that of
packet packaging. The gallon packaging is providing additional value to the customer
in terms of storage functionality and people would be willing to pay extra for the
same. To arrive at the optimal price points, the company should revisit its cost
allocation strategy. Evenly distributing the cost is not the right approach. They
should perform activity-based costing and allocate the overheads and direct
expenses to both the products separately.

Thank you for your recommendation. We can close the case here.

© Management Development Institute, Gurgaon | 2024- 2025 27

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 3: Summary

Prompt: Your Client is India’s major cooking oil processing and packaging company. It has observed a reduction in its operating profits. Can you find out why
this is and come up with suitable recommendations?

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?

Profit
Company Specific
▪ Concentrated and to the point
▪ Timeline clarifying questions
Past 6 months
▪ Quickly switching to value Revenue Cost
▪ Revenue Trend chain analysis and confirming
Increasing sales with the interviewer for any
missing step
▪ Cost Trend Raw
Increased- New equipment Common mistakes Price Quantity Processing Packaging Storage Distribution Retail
Material
installed, experienced labour
▪ Getting derailed with the
hired, costly raw materials
used FMCG business
Cost Per
Overhead
Litre
▪ Overhead costs: Total costs in
the factory / No . of unit
produced
▪ 2-litre packet has contributed
60% of the sales volume

Recommendations Uninvolved Branches

Conclusion: The new prices are lower on a per litre basis given that 1. As suggested by the interviewer during the case discussion, neglecting revenue side analysis
packaging costs have increased. 2. Not in the scope of the case discussion as the interviewer wanted the interviewee to focus only on the
packaging side
Short Term Recommendation
▪ People would pay extra for the gallon packaging as it
provides additional value to the customer. Hence its price on per litre
basis should be higher than packet packaging’s price
▪ Revisit cost allocation strategy and allocate overheads and
direct expenses to both packaging individually
Long Term Recommendation
▪ Zero-based budgeting can be explored

© Management Development Institute, Gurgaon | 2024- 2025 28

H Frameworks and Cases

Profitability Case 4: Pump Manufacturer

Industry Manufacturing

Level Beginner

Prompt: Your client is a pump manufacturer and is experiencing declining profits for the last 3 quarters. Can you please help your client to identify the root cause and
suggest some action plan?

Sure! First I would like to understand a bit more about client’s business. Can you The sales team ensures product availability through existing distribution channels.
give some more information about the same?
Have there been changes related to product awareness and acceptability?
The client is only a pump manufacturer dealing in B2B business.
Yes, the company recently began targeting larger industrial clients, where we've
Is this an industry-wide problem or only related to our client? Has there been any noticed a low acceptance rate, mainly due to our sales team's lack of product
significant change in the market for the client? knowledge.

No, it's only related to our client. The industry is growing at 45%, but our client is It seems the issue might be the sales team's inability to effectively communicate
growing at only a 10% rate. product features to this new segment due to a lack of in-depth product knowledge.
Thanks. Can you give the percentage decline of the client in comparison to our That seems accurate. Our sales team struggles to engage large-scale clients who
competitor? demand detailed product information. What would you recommend?
Cost has remained constant. Revenue increase observed with only a 10% rate. In the short term, training the sales team to improve their product knowledge will
help them better engage with large-scale clients. For the long term, I suggest
I would like to break profit into revenue and cost. Should I go with revenue analysis
increasing product awareness through digital marketing and industry expos,
first?
targeting the new market segment.
Sure, go ahead.
I would divide revenue into the number of units, price, and product mix. Does our
client have any information about these factors related to the decline or decreased
growth rate?
The price point is as per market trends. No change has been observed in the
product mix. The number of units sold has not been increasing as per other
competitors.
To understand the sales decline, I’ll focus on the following parameters: availability,
acceptability, awareness, and affordability. Has there been any notable change
related to product availability and affordability?

© Management Development Institute, Gurgaon | 2024- 2025 29

H Frameworks and Cases

Profitability Case 4: Summary

Prompt: Your client is a pump manufacturer and is experiencing declining profits for the last 3 quarters. Can you please help your client to identify the root
cause and suggest some action plans?

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?

Company Specific • Concentrated and to the point Profit
clarifying questions
▪ Timeline
Last 3 quarters
• Focus on detailed product
▪ Affected by information Revenue Cost
Internal/External factors
Mainly Internal • Understanding the impact of
the sales team on product
▪ Revenue Trend awareness Price Quantity Overheads Fixed Variable
Increased at a low rate (10%)
Common Mistakes
▪ Cost Trend • Neglecting the sales team's
Constant knowledge gap as a factor
▪ Industry Growth rate: 45%
• Not distinguishing between Affordability Availability Accessibility Awareness
product availability and
product knowledge

Recommendations Uninvolved Branches

Conclusion: The primary issue lies in the sales team's product
1. As suggested by the interviewer during the case discussion, neglecting cost side analysis
knowledge, impacting the acceptance rate of products in new market
2. There has been no change in the pricing of the products, so it is not a factor in the declining profits.
segments
3. The product mix remains as per market trends with no significant changes observed, indicating it is not a
Short Term Recommendation major contributor to the problem.
Sales Team Training:
• Enhance product knowledge and communication skills of the sales
team
• Conduct training programs to better engage with large-scale
industrial clients
Market Research:
• Understand specific needs and expectations of the new market
segment
• Align product features and marketing strategies accordingly

Long Term Recommendation

• Exploring digital marketing and product development © Management Development Institute, Gurgaon | 2024- 2025 30
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 5: Chinese Footwear Retailer

Industry Retailing

Level Intermediate

Prompt: Your Client, CSM Sports, is a Chinese footwear retailer attempting to establish a profitable presence in the European market. Since they arrived six years ago, they
have struggled to achieve their profitability goals. How can you help them identify the root cause and recommend next steps?

Sure! To reiterate my understanding of the case, a Chinese footwear company is The footwear is sold only in the offline stores. There are six stores across different
struggling to achieve its profitability goals in the European Market and we have to cities. Out of the six stores, 4 are located in the malls/supermarkets. The other two
find the reason for the same and advice on how to go about achieving the desired stores are flagship stores, located in prime locations with higher footfall. You can do
profitability results. Is my understanding correct? market sizing for the footwear sales. You need not go into the details of the exact
locations of these stores.
Yes, absolutely. Average Sales in the Mall/Supermarket based Stores – 1000 items/day
Average Sales in the Flagship stores – 4000 items/day
I would like to understand more about the products the client sells. Based on these data points we can calculate the yearly revenue for the company.
Total Revenue = 365*50*(4*1000 + 2*4000) = €219 Million
Sports shoes are the client’s major source of revenue. They also sell flip flops and
sandals. Ok, that’s good. We already have a number for total yearly cost. It was €225 Million
for the previous year. Can you look at the drivers for the cost and revenue one by
Where are these products manufactured? one to identify the scope for improvement?

They are manufactured in China itself. I would like to start my analysis with the costs. Per my understanding,
manufacturing cost is one of the primary cost. Do we have information if
Okay. How are the sport shoes priced? Are they premium products? manufacturing processes are efficient? Is there scope for improvement?
The company is manufacturing at the cheapest possible rate. What next?
The footwear is sold in the European market at an average price of around €50. It
is in line with the mid-tier competitors. How about the labour cost? Can we reduce that?

I would also like to understand the external factors a little. How is the footwear No. Labour in China is already cheap and cannot be reduced further. What next?
market doing and if there have been any disruptions in the industry/market? Next is the shipping cost. How are we shipping the products from China to Europe?
The market is stable and in recent times there has not been any economic Currently we are shipping through air.
downturn. There hasn’t been any disruption in the industry either.
Can we look at alternative option like shipping through sea routes?
Since we know the average price, I would first like to look at the revenue. Do we Yes, shipping through waterways will bring down the cost. However, that is not a
have information on how the footwear is sold? Is it sold in online or offline stores? concern for the company. Can you look at other costs?

© Management Development Institute, Gurgaon | 2024- 2025 31

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 5: Chinese Footwear Retailer

Industry Retailing

Level Intermediate

Yes. Next I would like to look at the rent. Since the flagship stores are located in
Sure. Currently the client is making an yearly loss of €6 Million. To address this, we
prime locations, the rent must be high. Is this the case? If so, is it possible to shift
looked at the costs and revenue. On cost side, I would recommend changing the
them to different locations to reduce this fixed expense?
shipping mode from air to water. Sea routes are less expensive and allow each
shipment to carry larger product volumes compared air-routes.
No that is not possible. Those are required for marketing purposes. On the revenue front, I would recommend rigorous customer study, R&D and
product development. This would help the client increase its sales volume and
Talking about the mall stores, since the sales are lower can we get away with them achieve profitability. The client can also look at online selling and hope to reach a
and have more flagship stores? wider customer base.

No, the mall stores are strategically functioning with expansion plans. We have
Excellent! Thank you for your recommendations. We can close the case here.
almost covered the cost. Let’s see if we can do anything on the revenue front.

Okay, sure. Revenue consists of price and sales volume. Can we change our price?
How price sensitive is the European customer?

No, the company does not want to change the price point. Increasing prices will
reduce the sales, while reducing price will not solve the profitability issue.

Looking at the sales volumes, can we have online channels for increasing sales?

The company does not want to invest in online channel, at this point in time.

Alright. How does customer perceive our products? Do they consider them trendy?
Since the company is based out of China, there is a possibility that it might not be
producing at per the latest trends in Europe.

Yes, recently the company has identified that the European customers feel that the
footwear colours are very basic and lack variety.

So this can be a primary reason for not meeting profitability goals. Product
innovation needs to be looked at. Another important factor could be the in-store
experience of customers. Can the staff be better trained to deal with customers.

They are already well trained. It is the product that needs work. You have nearly
covered all the aspects. Can you summarize your findings and recommendations?

© Management Development Institute, Gurgaon | 2024- 2025 32

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 5: Summary

Prompt: Your Client, CSM Sports, is a Chinese footwear retailer attempting to establish a profitable presence in the European market. Since they arrived six
years ago, they have struggled to achieve their profitability goals. How can you help them identify the root cause and recommend next steps?

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?

Company Specific
▪ Focus on numbers,
▪ Timeline calculation of yearly revenue Profit
6 Years figures
▪ Affected by ▪ Thinking on the go, once the
Revenue Cost
Internal/External factors interviewer asked for more
Both, but mainly internal reasons
▪ Cost Trend Common Mistakes Price1 Quantity Manufacturing2 Labour2 Distribution Retail4
Constant but higher than
▪ No clear structure of
Revenues
segregation of costs,
▪ Cost sides have remained eventually it was the value Air3 Sea Routes Online Offline
constantly high and the chain approach, however the
current revenue is unable to back and forth could have
match up been avoided
▪ European Customers feel ▪ When product was identified
product is not up to the mark as the problem, a sales
and can be improved recommendation wasn’t in Uninvolved Branches
line with the discussion
1. Client does not want to change the pricing strategy and wants to target the mid-tier European market.
Recommendations 2. Both are as cheap as possible, no scope of cost reduction
3. Existing strategy depends on Air travel, which is a costly and non-volume supportive distribution strategy
Conclusion: CSM sports is currently making a loss of 6Mn, which is 4. Client does not want to move into online space yet
attributed to lack of product innovation, quality & features.
Short Term Recommendation Revenue Calculation
▪ Change the marketing strategy of the product focusing on the
minimalist audience where something basic might appeal to the
customer base Yearly Yearly
Type Avg. Price Avg. Units No. of Stores
Revenue Cost
Long Term Recommendation
▪ Invest in R&D, Consumer surveys & Product development Supermarket 50 1,000 4
▪ Shipping mode change from air to water, since sea routes are 219 Mn 225 Mn
cheaper Flagship 50 4,000 2

© Management Development Institute, Gurgaon | 2024- 2025 33

H Frameworks and Cases

Profitability Case 6: Polyfilm Manufacturer

Industry Manufacturing

Level Intermediate

Prompt: Your client ABC Poly Ltd. is a polyfilm manufacturer. The revenue has increased by 10% YoY but the profits have declined. Please help them identify the root cause
and suggest next steps.

First, I would like to begin by understanding the business, what exactly is polyfilm Sure, go ahead.
manufacturing?
Starting from number of units, I would want to look into the demand and supply
Polyfilm manufacturers specialize in producing versatile plastic layers/films tailored side.
for diverse packaging applications.
The issue is with demand but can you take another approach to identify the issue?
Are there any specific regions client operates in? Think from a general perspective.
No, the client has a pan India presence. I’d like to look at macro-economic factors at play here. There are 6 lenses I’d
consider, i) Political, ii) Economic, iii) Social, iv) Technological, v) Environmental, &
Is the decline in profitability an industry wide issue or specific to our client?
vi) Legal. I will analyze these from the perspective of the manufacturer and not the
Yes, all major manufacturers are facing the same issue. shipment companies as they are the ultimate decision-maker on choice of port.

Who are the key customers in the market? Is our client for B2B or B2C or both? No there has been no recent change in any of the above factors related to industry.

In B2B, the main buyers are usually companies in the packaging sector, while in Is it that there are substitutes in the market that are taking up our share?
B2C, customers typically purchase plastic for use in automotives.
There are certain artificial materials available in the market but that is not the main
Is the mentioned problem prevalent in both the segments? Do we have any issue.
information regarding the revenue and cost breakdown for the segments?
Considering that all competitors are encountering difficulties, could this be
In the last fiscal year, total revenue amounted to ₹550 million. B2B revenue attributed to the entry of a new player in the market?
constituted ₹300 million, and B2C revenue accounted for ₹250 million. The
Yes, a recent entrant has begun offering the material at more affordable prices to
previous year's figures were ₹500 million, ₹320 million, and ₹180 million,
the automotive players leading to decline in revenues from the B2B segment. Could
respectively.
you please provide some recommendations to tackle the situation?
At first glance, it appears that the problem is related to the revenue generated
Sure, we can offer discounts or incentives for B2B customers who make bulk
from the B2B segment. Does the cost structure also contribute to the mentioned
purchases. Provide flexible and extended payment terms for B2B clients to ease
issue?
their cash flow concerns. This can encourage larger order sizes and increase overall
The issue is with a decline in revenue for the B2B segment. revenue.

I would like to explore both number of units, and revenue per unit for the B2B Excellent. We can close the discussion here.
segment. Should I go ahead?
© Management Development Institute, Gurgaon | 2024- 2025 34
H Frameworks and Cases

Profitability Case 6: Summary

Prompt: Your Client is a Mumbai based Ice-Cream manufacturer. They are struggling with their profitability and have approached you to analyze their
problem. You need to identify the key issues and come up with recommendations.

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?

Industry wide-issue • Clear understanding of the
business context Profit
▪ Timeline
Last fiscal year
• Effective identification of key
▪ Affected by issues related to demand
Internal/External factors Revenue Cost
Both (mainly external) • Consideration of macro-
economic factors and their
▪ Revenue Breakdown impact
1. B2B: ₹300 Million Price Quantity
2. B2C: ₹250 Million Common Mistakes
• Focusing too much on
▪ Cost Trend internal factors without
Not specified directly, but Demand
considering external
profits have declined competition
▪ Revenue Trend
Increased by 10% YoY (from • Neglecting the impact of new Supply
₹500 million to ₹550 million) market entrants

• Overlooking the specific

needs and concerns of B2B
clients
Recommendations Uninvolved Branches
Conclusion: The primary issue is the decline in revenue from the B2B 1. Discussion on cost structure irrelevant as the issue is on revenue side for B2B.
segment due to the entry of new competitors offering more affordable
products
Short Term Recommendation
• Offer discounts or incentives for B2B customers who make
bulk purchases
Long Term Recommendation
• Provide flexible and extended payment terms for B2B clients to
ease their cash flow concerns.
• Strengthen customer relationships through enhanced customer
service.
© Management Development Institute, Gurgaon | 2024- 2025 35
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 7: Electric Motors

Industry Automotive

Level Advanced

Prompt: The client is an Indian conglomerate which manufactures electric motors. Since the last 3-4 years, profitability is below the industry average. Diagnose the problem
and recommend solutions.

Sure! First, I would like to reiterate the problem to make sure that I am That looks good.
understanding it correctly. So the prompt is that the client is an Indian
conglomerate which manufactures electric motors. Since the last 3-4 years, We can further segment it as: Under R&D, there would be tech support and training
profitability is below the industry average. I need to diagnose the problem and support. Under procurement, it would be supplier and cost of raw materials. Under
recommend solutions. Is profitability the only problem for the firm? production, it would be machine efficiency and labour costs. Under storage &
transportation, it would be inventory costs, transportation and wastage during
Yes, that is correct. transportation. Should we look at these one by one?
I would like to start by asking a few initial questions. Which geography is the No, this looks good. The problem is with cost of raw material going up.
company situated in?
We can look at some external and internal factors in that case. Would you
The company has 3 manufacturing plants - 2 in North India and 1 in West India. recommend going down this path?
Which part of the value chain does the company operate in? You can look at what constitutes the major raw material for electric motors.
The client’s firm is only involved in manufacturing. The major raw materials for electric motors would primarily be steel and copper
wires. Do we have any information regarding the costs for these?
Do we have any data regarding the competition and the market share of the
company? Yes, the cost for copper wires has gone up by 30-35%. Can you come up with some
recommendations?
You can assume that the client is one of the top players.
We can use aluminium wires which are a cheaper alternative and better predict the
What does the product portfolio look like? demand for our product and accordingly buy copper when it is cheaper.
The client manufactures electric motors used in heavy motors (40%), engineering
Alright. Any financial instruments that can be used in this case?
parts (40%) and in power plants (20%).
Candlesticks and charts.
Since the profitability is going down, we can start by looking at the revenue and
cost. Do we have any data about either of these? Sounds good. We can close the case here.
The revenue has not changed but the cost has increased.
Since the cost has increased, I would like to look at the different heads under cost.
We can do this by looking at the value chain. Cost can be broken down as R&D ->
Procurement -> Production -> Storage & transportation.

© Management Development Institute, Gurgaon | 2024- 2025 36

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 7: Electric Motors

Industry Automotive

Level Advanced

Prompt: The client is an Indian conglomerate which manufactures electric motors. Since the last 3-4 years, profitability is below the industry average. Diagnose the problem
and recommend solutions.

Sure! First, I would like to reiterate the problem to make sure that I am That looks good.
understanding it correctly. So the prompt is that the client is an Indian
conglomerate which manufactures electric motors. Since the last 3-4 years, We can further segment it as: Under R&D, there would be tech support and training
profitability is below the industry average. I need to diagnose the problem and support. Under procurement, it would be supplier and cost of raw materials. Under
recommend solutions. Is profitability the only problem for the firm? production, it would be machine efficiency and labour costs. Under storage &
transportation, it would be inventory costs, transportation and wastage during
Yes, that is correct. transportation. Should we look at these one by one?
I would like to start by asking a few initial questions. Which geography is the No, this looks good. The problem is with cost of raw material going up.
company situated in?
We can look at some external and internal factors in that case. Would you
The company has 3 manufacturing plants - 2 in North India and 1 in West India. recommend going down this path?
Which part of the value chain does the company operate in? You can look at what constitutes the major raw material for electric motors.
The client’s firm is only involved in manufacturing. The major raw materials for electric motors would primarily be steel and copper
wires. Do we have any information regarding the costs for these?
Do we have any data regarding the competition and the market share of the
company? Yes, the cost for copper wires has gone up by 30-35%. Can you come up with some
recommendations?
You can assume that the client is one of the top players.
We can use aluminium wires which are a cheaper alternative and better predict the
What does the product portfolio look like? demand for our product and accordingly buy copper when it is cheaper.
The client manufactures electric motors used in heavy motors (40%), engineering
Alright. Any financial instruments that can be used in this case?
parts (40%) and in power plants (20%).
Candlesticks and charts.
Since the profitability is going down, we can start by looking at the revenue and
cost. Do we have any data about either of these? Sounds good. We can close the case here.
The revenue has not changed but the cost has increased.
Since the cost has increased, I would like to look at the different heads under cost.
We can do this by looking at the value chain. Cost can be broken down as R&D ->
Procurement -> Production -> Storage & transportation.

© Management Development Institute, Gurgaon | 2024- 2025 37

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 7: Summary

Prompt: The client is an Indian conglomerate that manufactures electric motors. Since the last 3-4 years, profitability is below the industry average.
Diagnose the problem and recommend solutions.

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?

Profit
Industry Specific
▪ Comprehensive questions
▪ Timeline
▪ Quickly asking about revenue
Last 3-4 years
and cost sides
▪ Revenue Trend Revenue¹ Cost
▪ Dividing the cost into
Constant revenue
different branches and sub-
▪ Cost Trend branches
Increase in cost Storage &
Common Mistakes R&D2 Procurement Production2
transportation2
▪ Client has 3 manufacturing
▪ Not listing down
plants in India
recommendations in points
▪ Client’s firm is only involved and not splitting them as
in manufacturing short-term and long term Technical support Raw materials Machine efficiency Inventory

▪ Product portfolio – motors

used in heavy motors (40%),
engineering (40%) and power Training support Labor Wastage during
Supplier3
plants (20%) transportation
▪ Cost of raw material has
increased by 30-35%

Recommendations Uninvolved Branches

Conclusion: Increase in costs due to an increase in the cost of copper 1. As the revenue was constant, neglecting revenue side analysis
wires which is one of the major raw materials for electric motors. 2. Since the interviewer mentioned that the problem was specific to procurement, neglecting other branches
3. Since the problem was specific to raw material cost going up, neglecting other sub-branches under
Short Term Recommendation
procurement
▪ Use aluminium wires since they are a cheaper alternative to copper
wires
▪ Better demand forecasting and buying copper according to demand
Long Term Recommendation
▪ Use financial instruments like candlesticks & charts to purchase
copper

© Management Development Institute, Gurgaon | 2024- 2025 38

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 8: Hospital Chain

Industry Healthcare

Level Advanced

Prompt: Your Client is the owner of a Hospital chain. Lately there has been a decline in their profits. Figure out the reasons and suggest possible solutions

Sure! I would like to start by understanding more about the client. How many Okay we are seeing a reduction in the first two buckets. 3rd one is largely self
hospitals does our client own and is the problem on an overall level or with a explanatory.
particular hospital?
First, starting with the surgical revenues, these can divided into No. of Surgeries x
The client owns 4 multi-speciality hospitals across the country. The problem is Cost/surgery. Do we know if either of the metric has seen a decline? And secondly,
with just one of the hospitals. in terms of medical patients, it depends on no. of days of stay.
Okay, can you tell me some more facts about the hospital. Where is it located and We are seeing a decline in the No. of surgeries that have happened in our hospital
what type of population segment does it cater to? and on the second point, try thinking deeper
It is located in a semi-urban area of Delhi and caters mostly to the middle to high For the decline in surgeries there, we can then analyse the awareness, accessibility,
income population segment affordability & customer experience factors of our hospital in terms of medical
patients, it could also depend on occupancy rate.
Understood. Also, can I get an idea since when has this problem started?
So there has been lately some negative reviews regarding our post-op care, which
We have seen this declining trend for the past 2 years.
has led to patients either getting their surgeries done in other hospitals & clinics.
Got it. To further deep dive on the issue, I’d like to split profitability into revenue &
This actually might also be the reason why there is a decline in occupancy rate of
costs. Any particular head that you would like me to start with?
beds given that the industry has a high word of mouth effects. There can be couple
Costs have largely remained the same or grown as per expectations. It’s the of ways to counter this. Internally we can work on improving our own Post-op care
revenues that have seen a decline. team, by identifying potential gaps and seeing where there has been an issue.
Externally, we can market the positives and conduct surveys over social media to
Sure, delving into revenues first, which can be divided into revenues from patients highlight this change more emphatically.
which would include surgery, medical check-ins etc and revenue from non-patient
driven activities like Research & academic activities. Thanks. You can close the case now.
It’s the patient driven revenue which has declined. Can you briefly discuss what you
mean by this segmentation?
Sure. Surgical revenue includes the charges on performing surgeries, which mostly
forms the bigger chunk of revenues. Medical patients are the ones who undergo
regular check ups and stays in the hospital. Others include food, medicine revenue

© Management Development Institute, Gurgaon | 2024- 2025 39

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 8: Summary

Prompt: Your Client is the owner of a Hospital chain. Lately there has been a decline in their profits. Figure out the reasons and suggest possible solutions.

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?

Company Specific Revenue
▪ Identifying the issue being
▪ Location standalone and not
Semi-Urban area consolidated
Patient Non Patient
▪ Revenue Trend ▪ P&L-based split for revenues Driven Driven
Decreasing
▪ Ability to think on two fronts
▪ Cost Trend simultaneously
Not Necessary Surgery Medical
Common mistakes Others1
▪ Middle to high income Revenue Revenue
segment ▪ Intimidated while bifurcating
the revenue split/branches
▪ Problem persisting for the for a technical industry
past 2 years No. of Occupancy No. of days of Additional
▪ Not producing answers when Cost/Surgery Medicine
Surgeries rate stay2 Food
▪ Standalone issue with 1 asked for alternate solutions
hospital
Customer
Accessibility Affordability Awareness
Experience
Recommendations

Conclusion: The drop in revenue was for both Surgical & Medical
patients, and this was majorly driven by consumer experience decline
which suggested a poor post-operation (post-op care) Uninvolved Branches
Short Term Recommendation
▪ Train the staff appropriately and maintain a strict quality check for The case specifically talks of revenue side analysis hence no costs are analysed here.
the time being 1. Ancillary revenues were not asked to analyse
▪ Benchmark the best post-op clinics and hospitals and identify gaps to 2. No. of days reflected a decline because of low occupancy rate.
fill
Long Term Recommendation
▪ Market the new changes extensively and take feedback from patients

© Management Development Institute, Gurgaon | 2024- 2025 40

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 9: Private Sector Bank

Industry Banking

Level Advanced

Prompt: The client is a private sector bank operating in India. It has seen a drop in profitability in the past 3-4 quarters and are keen to turn around the numbers to achieve
their goal. Identify the root causes and recommend solutions

Sure. Just so I have understood the problem correctly, the client is a private sector Good, you can proceed with the revenue-side analysis.
bank and has seen a drop in profitability in the past 9-12 months. Our objective is
to identify the causes and recommend solutions. Since we have already broken the revenue into interest income & other income, do
we have any data or indication as to what may have declined?
Yes, that’s correct.
The interest income has grown according to projections. It’s the share of other
Before I proceed, I need to understand the business and industry a bit better, so income which has decreased. Could you first list down some of the ways in which
would like to ask few preliminary question for clarity. banks generate this income?
Sure, Go ahead. That would be transaction based fees and charges, advisory services charges,
commission charges for selling other financial products
I’d like to start by understanding where the client is located at and where all do
they serve geography wise? Also is the problem being faced in any particular What exactly do you mean by commission charges?
branch or on an overall level.
Banks usually provide services but they also act as distributors for financial
The client is based out of Mumbai, but has operations Pan-India. It has a strong products like mutual funds & insurance products, on which they earn commissions.
presence in the southern and western markets. The problem is not from a branch For eg, in the mutual fund industry, Banks have to register with AMFI separately as
perspective. You can look at the company as a whole. a distributor and disclose commission amounts, which is usually a % of the AUM.
Do we have any data on how the competitors have faired in the similar time The commission revenue has declined for the bank.
period?
All major players have taken a hit however the client has seen more drop in profits Do we have split of product type, so as to ascertain where the commissions have
than any competitor. declined?

Okay, so to start with, we can split profitability drivers into Revenue and costs and The decline is evenly spread out across products. What else could be the reason?
I can move forward with the Revenue analysis. If the product is fine, then there might be an issue with the way the product is
Before you do that, could you list out the typical revenue and cost heads for a being sold. Do we know of the cross selling techniques being used by the client?
bank? We do not have that particular information, however we know that the client
Sure. For a bank, revenue is typically earned from Interest income and other recently shifted from a 100% in house cross selling team, to a 50% in-house and
income and the major cost heads include Interest expense, Operating expense and 50% outsourced team.
Provisions & Contingencies.

© Management Development Institute, Gurgaon | 2024- 2025 41

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 9: Private Sector Bank

Industry Banking

Level Advanced

This could be one of the reasons for decreased cross-selling. The newer teams That’s alright, we have seen for the past few quarters all banks have been a little
might be taking more time to adjust to the working methods and there might also more safe with their loans, considering a high default rate expected.
be a lack of follow-ups on cross-selling.
That’s probably the reason why management of not just the client but also
Those seem like fair reasons. How would you solve them? competitors felt the same and increased provisions leading to a cost hit.
I’d look into the training programs of our in-house team as well as the outsourcing Suggest some ways to counter this cost increase.
team. Usually with vendors, the onus on training is on them, but if we can train
them according to a systematic plan and divide the manpower capacity. It can help This can be looked at purely from Risk management perspective. The client needs
adjust to the problem quickly. Also have a set of protocols to be followed by each to split its portfolio across products, across geographies, across customer types to
distributor. minimize risk of default. There can also be investment in the collections side to
support the risk management initiatives for the client.
Good. You can move to the cost side analysis.
Sure, Thank you. You can close the case here.
Sure. As previously mentioned, the cost of a bank can be divided into Interest
expense, operating expense & provisions. Any indication which metric has gone up?

Before moving ahead, could you briefly tell me what all these cost factors are?

Interest expense is the interest being paid out by the bank (on deposits), operating
expense includes your rent, power, electricity, marketing expenses, admin
expenses, employee expenses & Provisions included the money kept aside for non-
performing assets.
Okay, Operating expenses have actually decreased and interest expense have
remained similar to previous years.
Sure, then the problem narrows down to Provisions and Contingencies for the
client. Has there been any regulatory ruling regarding the increase in the % to be
set aside for provisions?
You are correct about the Provisions part, but is it merely a mandatory
requirement?

Oh, yes I missed the management discretion angle for determining the provisions.

© Management Development Institute, Gurgaon | 2024- 2025 42

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Profitability Case 9: Summary

Prompt: The client is a private sector bank operating in India. It has seen a drop in profitability in the past 3-4 quarters and are keen to turn around the
numbers to achieve their goal. Identify the root causes and recommend solutions

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?

Company Specific
▪ Interviewee seemed to have
▪ Timeline some level of comfort with
Last 3-4 Quarters the banking sector Profit

▪ Revenue Trend ▪ Ability to quote examples

Declining
▪ Maintaining composure even
▪ Cost Trend when missed out on an Revenue Cost
Increasing obvious answer (Management
based discretion on
▪ Client has pan India
Provisions)
operations with strong Interest Provisions &
Interest Income1 Other Income Operating Costs2
foothold in southern & Common mistakes Expense2 Contingencies
western markets
▪ Could have asked more
▪ Competitors also faced similar preliminary questions to
issue of margins however understand the case better Transaction Commission Management Regulatory
client had a bigger hit Advisory Fees1
▪ Recommendations could be Fees1 (Distributor) Based Based3
▪ Both revenue and cost being split into short- and long-
affected term solutions

Recommendations Uninvolved Branches

Conclusion: The decrease in revenue was due to a fall in cross-selling 1. All the revenue streams were in line with the requirement/management goals
and the increase in costs was due to increased provisions made by 2. They either remained the same or decreased in the past
management 3. No mention of any regulatory changes
Short Term Recommendation
• Train the cross-selling agents for a short-term solution.
• Assess the need for high provisions every quarter and accordingly
manage risks.
Long Term Recommendation
• Design a training program to ensure a smooth transition between
agents

© Management Development Institute, Gurgaon | 2024- 2025 43

H Frameworks and Cases

Profitability Case 10: 24/7 Store

Industry Regular

Level Advanced

Prompt: You have been approached by the owner of a 24/7 store selling all regular daily use items established in Gurgaon. The 24/7 store is all over Gurgaon and has been
in business for the past 4-5 years and amongst the top 1-2 brands. However one particular store is facing reduction in profits for the past 6 months. What would you
recommend?

Okay just to clarify, I have been approached by the owner of a 24/7 store As I said that we were market leaders before this, so affordability can not change in
established in Gurgaon. The 24/7 store is all over Gurgaon and has been in the past 6 months only.
business for the past 4-5 years. However, one particular store is facing reduction in
Okay got it. So is there any problem with the promotional side recently maybe due
profits for the past 6 months. I need to give recommendations for that. Is my
to budget cuts or something?
understanding correct?
Yes. The visibility has decreased significantly because we have reduced promotional
Yes, please go on. budgets. However this is only 1 aspect of the problem as the profit decrease is
higher and this cannot be the only reason.
Sure. To start with, I would like to know whether this problem is persistent with all
the stores available or only to our store? Okay then I will focus on the ticket size of the products brought as well. Is there a
decrease in that?
So it is a problem with only our store.
Yes, the average value of the order has decreased. What do you think can be some
Okay, so the problem may arise either from the reduced sales or due to increased
of the reasons for the same?
costs.
Few of the issues I can think of right away can be with the type of products we are
Let us focus first on the sales side. You can assume costs to be same for the time selling or maybe the customers are switching to healthy foods etc.
being.
No, we have been selling for the past 4-5 years. I don’t think this is a problem.
Sure. The revenue generated from sales is a product of the ticket size multiplied by
the number of customers. Is there any one aspect I should focus on or should I Is there any problem with the perception of our products because sometimes low
explore both the aspects for the analysis. prices as compared to the competitors can generate a negative image?
Let’s focus on both the aspect for the analysis of this case. Yes, actually recently we ran a discount campaign in which we offered significantly
high discounts. However, due to the campaign our high priced products are
Sure. Let us analyze the number of customers first. Has there been a recent standing still in the shelves.
problem due to which accessibility to the place has been affected?
Yeah so these items results in lesser ticket size and the customers switching to
No nothing like that, we are present on google maps as well as have a good offline competitors.
connectivity. Great, can you think of any other reasons that the number of customers may be
Okay, is there any problem with affordability of the items with respect to decreasing?
customers.
© Management Development Institute, Gurgaon | 2024- 2025 44
H Frameworks and Cases

Profitability Case 10: 24/7 Store

Industry Regular

Level Advanced

Another reason maybe the advent of apps like blinkit.

Well we are on blinkit too, any other reasons?

An in-store less footfall may be due to attitude of the salespeople and cashiers
there

This can be another reason, right. Ok what are your suggestions then??

Ok I will recommend increasing promotional and marketing budget for the next
phase of operations, increased training for the workforce and competitive pricing
for the products to prevent any negative commotion around them

© Management Development Institute, Gurgaon | 2024- 2025 45

H Frameworks and Cases

Profitability Case 10: Summary

Prompt: You have been approached by the owner of a 24/7 store selling all regular daily use items established in Gurgaon. The 24/7 store is all over
Gurgaon and has been in business for the past 4-5 years and is amongst the top 1-2 brands. However, one particular store is facing a reduction in profits for
the past 6 months. What would you recommend?
Case Facts Interviewee Feedback Approach
▪ Problem Area What Went Well?
Store Specific • Clear differentiation between Profit
▪ Timeline store-specific and chain-wide
Last 6 months issues

▪ Affected by • Focusing on both the sales Revenue Cost

Internal/External factors side and customer numbers
Mainly Internal
• Identifying the impact of
▪ Revenue Trend
promotional activities on
Decreasing Average ticket
visibility and sales Customers
size
▪ Cost Trend
Assumed Constant Common Mistakes
• Not considering the specific
▪ Store Visibility issues faced by the store Customer
Decreased due Accessibility Affordability Awareness Service Product-mix
perception
to reduced promotional budgets • Assuming cost changes
without the data

Recommendations Uninvolved Branches

Conclusion: The primary issue is reduced visibility and decreased
1. Cost Structure: Assumed to be constant for the time being, hence not a primary focus
customer footfall at the specific store, compounded by ineffective
2. Chain-Wide issues: The problem is specific to one store, not affecting the entire chain
promotional activities and possibly internal factors like staff attitude
Short Term Recommendation
• Increase promotional budget
• Boost the visibility of the store through targeted local
advertising and promotions
• Staff Training
• Enhance training for salespeople and cashiers to improve
customer service and in-store experience.

Long Term Recommendation

• Review pricing strategies to ensure competitive pricing without
eroding the perception of value
• Use feedback to make data-driven improvements in store
operations and customer engagement © Management Development Institute, Gurgaon | 2024- 2025 46
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Framework

Framework
Application of MECE principle on Market entry cases is dependent on answering 2 major questions- Can you enter the new market? and if yes, then how?

Whether to enter or not? How to enter

About the Market Financial Viability Operational Feasibility Competition Regulations & Red tape Type of considerations

❑ Overall Market ❑ Investment ❑ Value chain ❑ Market Type ❑ Barriers to entry ❑ Greenfield/Brownfield
Size required availability (Monopolistic
❑ Barriers to exit ❑ M&A
etc)
❑ Market Growth ❑ Unit economics ❑ Raw material
❑ Licensing ease ❑ JV/Strategic Partnership
❑ Number, Size
❑ Typical Customer ❑ Typical ❑ Labour
of Comp. ❑ IP Safety
Profile revenues/costs
❑ Transportation
❑ USPs ❑ Positive/Negative
❑ Success Factors ❑ Type of funding
❑ In house capability reforms
of the Market ❑ Sustainable
❑ Expansion
❑ Expertise availability Advantage
❑ Past Performance scope – Product
or market
❑ Future Potential

High Level Analysis

❑ Reiterate the problem to have a clear understanding of the case

❑ Understand the motives of the market entry and keep them in mind throughout the case – essentially reaching the market entry target is important
❑ Additional considerations whilst deciding whether to enter or not, should also include company’s internal resources as well as past expansions
❑ Candidates can use the framework – Industry, Company, Customer & Competition framework
© Management Development Institute, Gurgaon | 2024- 2025 47
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 1: E-Commerce

Industry E-commerce

Level Beginner

Prompt: Your Client is a US based E-commerce giant and as part of their expansion strategy, they are looking to enter the same business in the Philippines market. You are
advising them on this activity. How should they go about it?

Just to reiterate the case understanding, our client is US based E-commerce giant, After performing the financial analysis it seems that it does make economic sense
and they are looking to enter the same business in the Philippines market, and we to enter the market.
have to advice them on how to go about it?
Alright, that’s good. You can proceed and discuss about the modes of entry.
Yes, precisely.
So broadly we could look at 3 ways of entry. Standalone, Merger/Acquisition or a
Alright. I would like to begin by asking a couple of clarifying questions before I get Joint Venture. Has the client performed some primary analysis related to the
into the analysis and recommendations. market dynamics of Philippines?
1) What is our client’s business model? Yes. So based on the client’s primary analysis there are two major barriers to entry.
2) Why Philippines? 1) Stiff Competition 2) Govt orders to levy more taxes on non-indigenous
3) What are their objectives post entering this new market? companies to give local firms greater operational flexibility.

Well they are like any other E-commerce chain and have been in business for the Alright, that would make a standalone entry difficult to pursue, since we would be
last 15 years. Why Philippines, because the market has shown a tremendous at a disadvantage compared to the existing firms and higher tax rates would eat
growth of 40% in the last 2 years. However not all players have seen the same kind into our profits. Moreover, the client does not have any experience of marketing in
of growth. The primary objective is to breakeven in the first year & then grow in Philippines. Do we have data on the possibility of an acquisition or a JV?
the subsequent years.
Yes. Company PQR is not eager to go into any partnership. They have launched
Alright, understood. I would break this problem into 3 parts. First, I would check if physical e-stores with cashless payments facility and goods takeaway capabilities.
the entry into the Philippines market makes economical sense or not. Next, if it Company XYZ has not done much in terms of marketing. It had gained a lot of
does, I would like to explore the different entry modes looking at our client market share at the time of its advent in Philippines owing to the lower prices
capabilities and the country’s dynamics. Finally, I would be looking at the go to offered as compared to Company PQR. However, now they are bleeding money due
market strategy for our client. to lower margins and are open to joint business options.

Alright, that sounds good. So you can begin with your first analysis then. Alright, so based on the facts you provided it seems that going with company XYZ
either through a Merger/Acquisition or JV route makes more sense. They have a
Sure. So, for assessing whether the entry makes business sense or not, I would like
strong position in the market with 40% market share but they are bleeding money
to look at the current market size of Philippines and also the competitive landscape.
at the same time and are open to a joint business opportunity. By partnering with
Do we have some data on that?
XYZ, we can gain a significant market share right away and achieve the breakeven
Yes, we do have some data related to that (Refer Annexure) in the first year as we have planned.

© Management Development Institute, Gurgaon | 2024- 2025 48

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 1: E-Commerce

Industry E-commerce

Level Beginner

Alright, point taken. So, what should the go-to-market strategy for our client be?

Okay, sure.
1) First, as discussed, our client should go with either an M&A or a JV based
strategy. Company XYZ is an ideal partner for this.
2) Figure out what the consumer needs are and if customers are experiencing any
problems/gaps with the existing players’ capabilities. The client needs to focus
on addressing these pain points.
3) We can market using similar strategies as Company XYZ had done 4 years ago.
Leverage 15 years of experience in the business while marketing.
4) Innovate in terms of offerings which are different and better than Company XYZ
and any other offerings of any other companies. Market that innovation
strongly.
5) Perform cost benefit analysis of opening e-stores similar to those of Company
PQR and if it makes sense then subsequently open the stores to grow in the
later years.

Alright, good. So, what are your final recommendations for our client, based on all
the analyses done so far?

1) Based on the cost-benefit analyses, it is clear that our client will break even
within the first year. So the client should go ahead with the launch (as financial
break-even is one of the top objectives).
2) Further we looked at various mode of entries and conclude that going with a
joint business operating model with the company XYZ is the best possible
option at hand. There we would need to further look at integration challenges
and other gaps that could arise.
3) Finally, talking about the go-to-market strategy, our client should leverage their
15 years of E-commerce business experience and innovate in terms of offerings
so as to gain competitive advantage over PQR and other players.

Okay that’s good. We can end the case discussion here. Thank you.

© Management Development Institute, Gurgaon | 2024- 2025 49

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 1: Calculations

Industry E-commerce

Level Beginner

Annexure 1 Candidate’s Calculations

Potential Market Size Since the current market size in terms of revenues is $ 1000 Million and it
is expected to increase by 40% in the next year.
Philippines has a population of about of 100 Million and an internet
penetration of 60%
Therefore, total revenue for the next year => 1000 x 1.4 = $ 1400 Million
Market Size of the competitors in the industry
Client’s expected market share = 20%
Market Size Operation
Competitor
Competition (in revenue duration in Remarks Client’s expected revenue in the next year = 1400 x 20% = $ 280 Million
Origin
terms) Philippines
Now to calculate the breakeven :
PQR 60% Philippines 8 years Rise in Profits
Fixed cost = $ 50 Million

XYZ 40% China 4 years (Total 12) Decline in Profits Variable cost (Considering 20% profit margin) = 280 x (100% - 20%)

= $ 224 Million
Revenue & Profit margin of the competition in this industry
Total Cost = Fixed cost + Variable Cost
Avg. Profit margin
Competition Annual revenue ($)
(Last year) = $ 50 Million + $ 224 Million
PQR 600 Million 30%
= $ 274 Million
XYZ 400 Million 20%
Since the Total Revenue is greater than the Total Cost in the first
year, the client would be able to achieve breakeven in the first year itself.
The overall market (in revenue terms) is expected to grow by 40% in the
next year. And the client is expecting to capture 20% market share this
year
Price of products across all goods segments has been same for both
competitors. For a start, the client can operate with a minimum of 20%
profit margin. Fixed investment cost for the client is $50 Million.

© Management Development Institute, Gurgaon | 2024- 2025 50

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 1: Summary

Prompt: Your Client is a US based E-commerce giant and as part of their expansion strategy, they are looking to enter the same business in the Philippines
market. You are advising them on this activity. How should they go about it?

Case Facts Interviewee Feedback Approach

▪ Reason for market entry What Went Well? Market Financial Operational Strategy for
Growing market Market Entry
▪ Concentrated and to the point attractiveness feasibility feasibility entering
▪ Target objective clarifying questions
Breakeven in the first year &
▪ Quickly identifying points to
grow in the following years
calculate market Costs incurred by
Reason Market size Regulations Standalone2
▪ Barriers to entry attractiveness, feasibility and client
Stiff competition and excess the go to market strategy
tax for non-indigenous firms
Common Mistakes
▪ Market size & growth: Market growth Resource
Recommendations could be Objective Break-even point Joint Venture
$1000 million & 40%
▪ potential availability1
more concise
▪ Client’s expected market
share: 20% Client’s expected Mergers &
▪ Costs: $274 million market share Acquisitions

▪ PQR uninterested in
partnership; XYZ gained Increase
market share but bleeding in market
money & looking for JV share per year

Recommendations
Uninvolved Branches
Conclusion: Based on the cost-benefit analyses, since the client will
break even within the first year it should go ahead with the launch as a 1. Resource availability has not been discussed in the case; it has been assumed that the client has the
joint business operating model with the company XYZ required resources to expand
Short Term Recommendation 2. Due to stiff competition and government levying more taxes on non-indigenous firms, standalone entry is
▪ Invest in innovation and marketing of new product offerings difficult for the client and hence, not been discussed
▪ Leverage experience in marketing to produce different schemes
Long Term Recommendation
▪ Analyze the cost-benefit relationship for the possibility of opening e-
stores to grow in the future years

© Management Development Institute, Gurgaon | 2024- 2025 51

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 2: Luxury Yacht Manufacturer

Industry Manufacturing

Level Beginner

Prompt: Your Client is an Italy based multi billion-dollar luxury yacht manufacturer. Their business is majorly based in Italy, but they are seeing a decline in profitability over
the past 3 years. The client has been planning to enter a new market for a while and now with this profitability problem, they have decided to enter one of the following
countries: Netherlands, France, or Taiwan. The client would like you to evaluate which of these countries it should enter. How would you assist them with this exercise?

Just to reiterate the case understanding, our client is an Italy based luxury yacht Alright, that sounds good. Go on!
giant and they are looking to enter a new market – either Netherlands, France or
Taiwan owing to a decline in profitability in their domestic market, and we have to Do we have any data on the market size in these 3 countries, the growth potential
advice them on how to go about it? and what percentage the client is likely to capture?
Yes, that’s right. Please proceed.
Yes, we do have some data on this. (Refer Annexure 1)
Alright. I would like to have a few clarifications first.
So upon calculating the revenue over 3 years we see that France has the biggest
1) Why are our client seeing a decline in profitability in the Italian market? 2) What
luxury yacht market (€3B), the client’s potential market share is highest in the
is the basis for choosing these 3 specific countries? 3) What are their objectives
Netherlands, and the overall revenues are highest in France (€1.73B).
post entering this new market?

Alright, that’s good. So would you recommend that the client enter the France
Well as far as the decline in profitability is concerned,
market then?
1. The overall economic downturn in Italy has caused the luxury yacht market to
shrink from €4B to €2.5B over the last five years. Not yet, now since we are done with the economical analysis, I would like to
2. Italy implemented a new tax on luxury boats 2 years ago that has increased the analyse the market entry scenario based on the qualitative aspects.
costs for the client.
Yes, sure. Go ahead.
Each of the 3 proposed countries has a huge market for luxury yachts, similar to
that of Italy, and they show good growth prospects.
Coming to objectives, there are no fixed objectives, the client just wants to Alright, so I would break down the qualitative analysis in 3 aspects for each of the
increase their overall revenue as well as profitability. target countries.
1) I would analyse any barriers to entry from regulatory and legal points of view.
Alright, understood. I would like to analyse the three potential markets both from a
quantitative as well as qualitative point of view. Quantitively speaking, I would like 2) I would like to look at the competitive landscape and map out the players.
to analyse the market size as well as potential revenues that our client could 3) I would analyse the labour market in each of the countries, since the auto
generate in these 3 markets, and on the qualitative front I would like to analyse industry requires both highly skilled as well as cheap semi-skilled labour
these 3 markets in terms of barriers to entry and the competitive landscape.

© Management Development Institute, Gurgaon | 2024- 2025 52

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 2: Luxury Yacht Manufacturer

Industry Manufacturing

Level Beginner

Alright, that’s good enough for now. Do you have anything else to add? Annexure 1

Well, our primary analysis tells us that the client should enter the French luxury Increase in
Luxury Yacht 3 year CAGR Potential
yacht market for two main reasons: first, the client’s potential revenues in France Market market share/yr.
Market Size predictions Market share
are higher than either of the other two countries. (Absolute)

Next, on the qualitative side, we can also look at geographical factors like - Taiwan
is geographically isolated from Italy, increasing operational complexity and adding Netherlands €2B 5% 15% 5%
to costs. Cultural imbalance is a challenge too. So, at this point if I were to make a
recommendation, the client should target the French market.
France €3B 10% 10% 7%
And once if we have established that entering France makes the most sense, then
we could look at various modes of entry and how operational efficiency can be
established.
Taiwan €2B 10% 10% 6%

That’s a very good analysis. Alright, I think we can stop the case here. Well done!

Candidate’s Calculations

Market Size * Growth Rate * Potential Revenue

Market
Market Share (3 years)

€2B * 15% + €2B * 1.05 * 20% + €2B X

Netherlands €1.271B
1.05 * 1.05 * 25%

€3B * 10% + €3B * 1.10 * 17% + €3B *

France €1.732B
1.10 * 1.10 * 24%

€2B * 10% + €2B * 1.10 * 16% + €2B *

Taiwan €1.084B
1.10 * 1.10 * 22%

© Management Development Institute, Gurgaon | 2024- 2025 53

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 2: Summary

Prompt: Your Client is an Italy based multi billion-dollar luxury yacht manufacturer. Their business is majorly based in Italy, but they are seeing a decline in
profitability over the past 3 years. The client has been planning to enter a new market for a while and now with this profitability problem, they have decided
to enter one of the following countries: Netherlands, France, or Taiwan. The client would like you to evaluate which of these countries it should enter. How
would you assist them with this exercise?

Case Facts Interviewee Feedback Approach

▪ Reason for market entry What Went Well? Market Financial Operational Strategy for
Declining profitability in Market Entry
▪ Tried to understand the attractiveness feasibility feasibility entering
domestic market
reason for declining
▪ Target objective profitability in the domestic
Choose 1 out of Netherlands, market and the respective
France and Taiwan to enter objective in the new market Costs incurred by
Reason Market size Regulations1 Standalone2
client1
▪ Reason for declining ▪ Ability to calculate the market
profitability size based on the given data
i.Economic downturn in Italy of market share and future Market growth Resource
ii.New tax on luxury boats projections Objective Break-even point Joint Venture
potential availability
▪ Market size, growth & ▪ Also touched on the
potential market share qualitative aspects
Annexure 1 Client’s expected Mergers &
Common Mistakes market share Acquisitions
▪ Qualitative Analysis
▪ Focusing only on calculations
Geographical location,
and not considering other
operational complexity and Increase
qualitative aspects
cultural balances need to be in market
analysed share per year

Recommendations Uninvolved Branches

Conclusion : Enter the market of France as it is providing the maximum 1. Financial and operational feasibility have not been discussed in the case; it has been assumed that the
benefits both quantitatively and qualitatively client has the required resources to expand
2. Strategy for entering has not been discussed in the case and is out of scope for this case
Short Term Recommendation
▪ Explore the various modes of entry (JV/organic) basis the
competitive landscape of France Market Market Size * Growth Rate * Potential Market Share Revenue (3 years)
▪ Decide how well the operational efficiencies could be established Netherlands €2B * 15% + €2B * 1.05 * 20% + €2B X 1.05 * 1.05 * 25% €1.271B
Long Term Recommendation France €3B * 10% + €3B * 1.10 * 17% + €3B * 1.10 * 1.10 * 24% €1.732B
▪ Analyze if the client could enter in the remaining markets/other new
Taiwan €2B * 10% + €2B * 1.10 * 16% + €2B * 1.10 * 1.10 * 22% €1.084B
markets after getting established in France
© Management Development Institute, Gurgaon | 2024- 2025 54
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 3: Li-Ion Batteries

Industry Energy

Level Intermediate

Prompt: Your Client is an Indian renewable energy company that primarily operates in Solar and Wind Energy. They are the fastest growing private player in this market
and to further expand their portfolio they are thinking of entering the Li-ion battery business. Should they enter this business and if yes, how should they go about it?

Just to clarify my understanding of the case, our client is an Indian renewable Alright, that sounds good. We can proceed with this.
energy company that primarily operates in Solar and Wind energy. They are the
fastest growing private player in this market & they are thinking of entering the Li- As I understand, in India Li-ion batteries are primarily used in EVs and as a storage
ion battery business. So, we need to advise them on whether they should enter this solution for renewables energy such as wind & solar. Do we have data regarding
business or not? the current market size of Li-ion batteries in India and its growth rate?

Yes. And also if they do decide to enter, then how should they do about that. Yes, you’re right and we do have some data regarding that. I would like you to
calculate the addressable market size of Li-ion for the year 2021 based on the
Alright, understood. I would like to begin by asking a few clarifying questions following data. (Refer Annexure 1)
1) What is the client’s current business model?
2) Why are they thinking of entering the Li-ion battery business ? As per my calculation, the addressable market size for the year 2021 is
approximately US $ 4.7 Billion & 39 GWH. (Refer to Annexure 2 for candidate’s
3) What are their objectives & success criteria post entering this new market? calculation)
The growth prospects looks promising. The renewable energy market is expected to
Our client builds, owns and operates utility scale solar and wind projects that
grow by 10% Y-o-Y and the expected growth in the share of EV mix is 75%.
generate energy for commercial and industrial customers. As far as diversifying into
Therefore, this look like a promising market to enter and if our client can
the Li-ion business is concerned, our client believes that Li-ion storage solutions are
strategically enter and expand in this market, it could turn out to be a profitable
the future with high integration capabilities with EVs. Their objective is to gain
venture in the long run.
considerable market share (at least 20%) in the next 5 years.

Alright, understood. So, to begin with I would to like to understand more about the Alright, now that we have established the addressable market size and proposed
current Li-ion market in India. There, I would look at the areas where Li-ion that the client should enter the Li-ion battery market, what would the client
batteries are being used, market size, market growth and competitive landscape. strategy be for this exercise?
Further, after assessing whether this is a good market to enter or not, I would like
to explore the various modes of entry and see which would make the most sense in To analyse different entry strategies, I would like to know more about the current
order to achieve the targets set by our client. Does this sound right to you? Or capabilities of our client in the battery space and what part of value chain they are
would you like me to explore any more domains? looking to enter?

© Management Development Institute, Gurgaon | 2024- 2025 55

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 3: Li-Ion Batteries

Industry Energy

Level Intermediate

Our client does not have any know-how related to Li-ion battery business as of Option 2 (Acquisition): The client would get the head start by leveraging the
now, and Li-ion batteries being a relatively complex business in terms of technology target’s capabilities, knowledge and supplier base and would be able to enter the
capabilities required, our client is looking to enter the final battery pack assembly market right away, thus reducing the risk of losing the market share. But initial
stage of the value chain to start with, and not the cell manufacturing or RM capital cost might be high, and there are possibilities of a buying the liabilities of
formulation business. the target company. Other risks associated M&A are also significant.

Has our client performed any market study to assess the entry strategies in terms Option 3 (Joint Venture): The client could join hands with an international player
of a greenfield venture or strategic alliances/JVs? with technical expertise on Li-ion batteries and save on the 3 years development
time. But, acquiring the technology and recalibrating it to the Indian market would
Yes, based on the primary analysis done by our client we have two observations: require time and capability building exercises. Moreover, there are possibilities of
conflicts in operation, and growth would be slower compared to the acquisition route.
1. If they decide to enter the market organically, it will take 3 years to develop the
expertise and then 1 year after that to set up an assembly plant. That is a comprehensive analysis. Which option would you recommend?
2. If they decide to enter the market through an acquisition or a strategic alliance, Looking at the potential and growth prospects of the Li-ion battery business,
they can essentially hit the ground running based upon the partnership. waiting for another 3-4 years and losing out on the market would not be
advisable. Our client should therefore go with the acquisition route in my opinion.
Okay. According to me, there are 3 ways the client could enter this new business.
Option 1 – Enter organically through developing own expertise and manufacturing And what should be the go-to-market strategy and what would the roadmap look
plant. This is going to have a long gestation period for the business. like for next 10 years if the client decides to go through the acquisition route?

Option 2 - They can acquire a company with the required expertise & capabilities Going with the acquisition route, it could take one year to look for a potential
and hit the ground running after the deal finalization. target, finalize the deal, and implement it. The client could then start the
production. For the initial 4-5 years, they should leverage their own expertise in
Option 3 - They could go through with Joint Venture and look for a partner having the renewable energy sector, being the leaders, and focus primarily on renewable
the technical know-how, with our client providing their expertise in renewables and integration to gain market share and a competitive advantage. At the same time,
a strong brand name in the market. since we have seen massive growth in the 2 & 3 wheeler EV segment in recent
Right. What are the advantages and risks associated with each of these options? times, the client could focus on providing battery solution for that segment.
After gaining enough market share and brand recognition in 5 years or so, the
Sure, so we can discuss these three options one by one and see which one makes client should expand their portfolio and enter into other applications such as the 4
the most sense. Wheeler market, telecom, IOT devices an so on.
Option 1 (Organic Growth): The client would have the most control over their Finally in the long run, the client should look at the possibility of backward
operations and better understanding of the on-ground issues. But, because it would integration and develop expertise in the cell manufacturing stage as well.
take our client 4 years to start selling in the market, it could lead to a substantial
market share loss, as we had seen previously that the market is growing rapidly. That’s a very good analysis. Alright, I think we can stop the case here. Well done!

© Management Development Institute, Gurgaon | 2024- 2025 56

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Industry Energy

Market Entry Case 3: Li-Ion Batteries Level Intermediate

Annexure 1 – Key Data Points Annexure 2 – Candidate’s Calculations

Renewables integration market Renewables integration market Unit 2021

Renewable Energy Capacity (GW) 150
Large-scale renewable energy capacity in India as of January 2021 (GW) 150 Percentage of renewable energy capacity linked to 2-
(GW) 15
hour battery systems (10% of 150)
Annual growth of renewable energy capacity starting January 2022 10% Renewables’ integration battery storage market
(GWH) 30.00
size (15GW * 2Hr)
Per kWh rate of battery, capex, in 2021 (USD/kWh) $120.00
Percentage of renewable energy capacity linked to 2-hour battery Renewables’ integration battery storage market
10% ($) $3,60,00,00,000
systems size (30 GWH*120$/KWH)

Per kWh rate of battery, capex, in 2021 (USD/kWh) $120 Electric Vehicles market Unit 2021
Number of automobiles manufactured in India (million) 30
Annual per kWh price reduction in battery capex 10%
No. of 2 and 3-wheelers (80% of 30M) (million) 24.00
Electric Vehicles market No. of 4-wheelers (20% of 30M) (million) 6.00
Share of EV in the automobile mix 2%
Number of automobiles manufactured in India 30 million
No. of EV 2 and 3 wheelers (2% of 24M) (million) 0.48
Percentage of automobiles that are 2 and 3-wheelers 80% No. of EV 4 wheelers (2% of 6M) (million) 0.12
Battery storage market 2&3 wheelers (0.48M*10KWH) (GWH) 4.80
Percentage of automobiles that are 4-wheelers1 20%
Battery storage market 4 wheelers (0.12*35KWH) (GWH) 4.20
Average battery size of 2 and 3-wheelers (kWh) 10 kWh
Electric Vehicles’ Battery storage market size (GWH) 9.00
Average battery size of 4-wheelers (kWh) 35 kWh
Per kWh rate of battery, capex, in 2021 (USD/kWh) $120.00
Annual growth in the automobile manufacturing sector in India 3% Electric Vehicles’ Battery storage market size ($) $1,08,00,00,000

Percentage EV sales in 2021 2%

Total addressable market size (GWH) 39.00
Annual growth of EV share of automobile mix 75% Total addressable market size ($) $4,68,00,00,000

© Management Development Institute, Gurgaon | 2024- 2025 57

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 3: Summary

Prompt: Your Client is an Indian renewable energy company that primarily operates in Solar and Wind Energy. They are the fastest-growing private player in
this market and to further expand their portfolio they are thinking of entering the Li-ion battery business. Should they enter this business and if yes, how
should they go about it?

Case Facts Interviewee Feedback Approach

▪ About client What Went Well? Market Financial Operational Strategy for
Builds, owns & operates Market Entry
▪ Quickly identifying points to attractiveness feasibility feasibility entering
utility scale solar and wind
calculate market
projects that generate energy
attractiveness, feasibility and
for commercial and industrial
the go to market strategy
customers Costs incurred by Value chain
Reason Market size Standalone
▪ Comprehensive analysis of client1 analysis
▪ Reason for market entry
the different mode of entry
High growth prospects in Li-
options and deciding the
ion storage solutions with
suitable option as per the Market growth
high integration capabilities Objective Break-even point Regulations2 Joint Venture
client objective for the entry potential
with EVs
Common Mistakes
▪ Target objective
Gain market share (at least ▪ Focusing only on calculations Resource
Client’s expected Mergers &
20%) in the next 5 years and not considering other market share availability2 Acquisitions
qualitative aspects
▪ Market size & growth
Annexure 2- candidate’s
calculation Increase
in market
share per year

Recommendations
Uninvolved Branches
Conclusion : Client should enter the market by acquiring a company
with the required expertise & capabilities 1. Financial feasibility has not been discussed in the case; it has been assumed that the client has the required
Short Term Recommendation financial capability to expand
▪ For the initial years, they should leverage their own expertise in the 2. Regulations and resource availability were not mentioned in the case and were assumed to not be obstacles
renewable energy sector, and focus primarily on renewable during the entry
integration to gain market share and a competitive advantage
Long Term Recommendation
▪ Client should look at the possibility of backward integration and
develop expertise in the cell manufacturing stage as well

© Management Development Institute, Gurgaon | 2024- 2025 58

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 4: Industrial AC Manufacturer

Industry Manufacturing

Level Intermediate

Prompt: Your client is an industrial air conditioner manufacturer. Currently, the customer sells products throughout the United States. They've asked us to look at whether
they should start taking overall plant air-conditioning contracts. Should the client go into this business or not?

Just to clarify my understanding of the case, the client is an industrial air That clarifies the client's business and capabilities. Do we have some information on
conditioner manufacturer with plants across the country. They want to explore the the competitive landscape and market growth in this sector?
proposal of taking over air conditioning contracts of mills and plants. I would like to
understand the business and the idea a bit more. What does a plant air- There are 3 other national firms that manufacture and provide air conditioners.
conditioning contract mean? Their market shares are smaller than that of our client. The product is a commodity
for these plants so it grows along with GDP which is steadily going upwards.
The client currently manufactures and sells industrial heavy duty air conditioners.
Their clients are majorly industrial goods plants and mills which uses these air These factors seem to work for the client. I would like to understand from a
conditioners to create human working conditions in their plants. customer point of view what they look in 3rd party air conditioning maintenance?

Some of these mills and plants need extra manpower and training to maintain air The cost of the operations for the customers is a small % of their total direct
conditioning of their units. The client wants to take over these operations under production costs. It is just extremely important for the customers to have minimal
maintenance contracts which gives them recurring constant revenue and scope for downtime as a plant shutdown is extremely expensive for them. They have been
more units of their make to be purchased. looking for expert operators to minimize this downtime.

That clarifies the business model and proposal. Since the client is looking to run My understanding is that the client can create value by taking over maintenance
maintenance operations I would like to understand the operational capabilities of operations and lowering the operational cost for customers. More importantly their
the client which makes them think they can take over such a business. capabilities can minimize the downtime adding more significant value. Therefore,
based on the value proposition, the client should enter into this business.
The client currently has the highest market share (30%) in the industrial air
conditioning market. By being the largest producer they have achieved highest Also the client gets a running revenue stream and more exposure to problems
economies of scale giving it a cost structure that is the lowest in the industry. This faced in industrial air conditioning for product development.
also gives them cheap access to every kind of AC equipment and chemicals. How should the client enter the market and implement this plan?
They have also perfected the technique of remote monitoring air conditioners and
The client’s capabilities are unique in the industry and they have a favourable value
have the minimum average plant downtime/breakdown in the industry.
proposition in their favour. They can sign exclusive third party contracts to take
So I can infer that the client will have a clear pricing advantage against the over managing plant air conditioning operations clubbed with making use of their
competition. Also a technology of remote monitoring will be crucial in having an products. They should initially target plants where they can leverage remote
upper hand in plant operations. monitoring and then gradually expand.

That is a reasonable assumption. I think we can close the case with that.

© Management Development Institute, Gurgaon | 2024- 2025 59

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 4: Summary

Prompt: Your client is an industrial air conditioner manufacturer. Currently, the customer sells products throughout the United States. They've asked us to
look at whether they should start taking overall plant air-conditioning contracts. Should the client go into this business or not?

Case Facts Interviewee Feedback Approach

▪ About client What Went Well? Market Financial Operational Strategy for
Industrial air conditioner Market Entry
▪ Analysis of value proposition attractiveness feasibility feasibility entering
manufacturer
was very detailed and
▪ Reason for market entry coherent
Maintenance contracts will
▪ Ability to understand the Costs incurred by
give recurring constant Reason Market size1 Regulations Standalone
concepts of Annual client2
revenue and scope for more
Maintenance Contract (AMC)
units to be purchased
was reflected in the
▪ Current client edge discussion Market growth Resource
Highest market share (30%) Objective Break-even point Joint Venture3
Common Mistakes potential availability
in the industrial air
conditioning ▪ Focusing solely on the
i. Pricing advantage standard method of Client’s expected Mergers &
ii.Technology of remote addressing a market entry market share Acquisitions
monitoring case could be problematic
because this case required
▪ Market size & growth
more innovative thinking than Increase
No quantitative data given
usual in market
but opportunities look solid share per year

Recommendations Uninvolved Branches

Conclusion: The client should take over maintenance operations and 1. No quantitative data was discussed for understanding the market attractiveness, it has been assumed that
lower the operational cost for customers the opportunities in the concerned segment are solid for the entry
2. Financial feasibility has not been discussed in the case; it has been assumed that the client has the required
Short Term Recommendation
financial capability to expand
▪ Sign exclusive third-party contracts to take over managing plant air
3. Since the client has the capability and resources to enter into contracts, they don’t need to think about
conditioning operations clubbed with making use of their products
entering in any JV or alliances
▪ Initially target plants where they can leverage remote monitoring and
then gradually expand
Long Term Recommendation
▪ Utilise the knowledge learned about industrial air conditioning issues
to help design new products

© Management Development Institute, Gurgaon | 2024- 2025 60

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 5: High-End Fashion Retail

Industry Retailing

Level Advanced

Prompt: Your client manufactures, import/exports and retails high-end branded apparel in the US. They are considering entering the Indian market, and you have been
hired to determine whether they should enter this new market or not.

Just to clarify my understanding, our client is an American retail brand that We can estimate the size of the high end market to be worth about $200m which
primarily deals in high end branded apparel right through manufacturing to would grow to 220m where the client expects to capture 20% or $44m of revenue.
distributing. They are thinking of entering the Indian market. So, we need to advise Do we have any information on expected costs and will this figure make sense
them on whether they should enter this business or not? against that?

Yes. And also if they do decide to go ahead, what should be their strategy in this Yes, your calculations looks good, and the client is happy to work with a revenue of
entry. $44m in the first year.

Can I begin by gaining some more understanding about the client, its current Since we see that the market is growing at a rate of 10% and current global
capabilities in the US market and its target segment? players are operating with comfortable margins, it does make economic sense to
enter the market. Furthermore, our target group being concentrated allows us to
Our client is currently the third biggest high-end apparel retailer in the US by make well directed isolated efforts making entry efforts simpler and focused.
revenue and they have been in the business for over 50 years. The target segment
for the client is individuals in the high income group. Now if the client is happy with the economic returns in the market broadly we could
look at 3 ways of entry. Standalone, Merger/Acquisition or a Joint Venture. Has the
Before I look to estimate a potential target market size for our client in India, can I client looked into any of these options and analysed the current players in the
know why the client wishes to enter the country? market?
The client has been looking at the fast growing demand for high-end fashion in the Yes the client has analysed the competitors and would like to make a standalone
country which aligns with positive macroeconomic trends. The client also likes the entry, the other players are direct competitors for the client globally. If the client
opportunities in distribution and retail in the country which gives them multiple does make a standalone entry, what channels should they consider for a potential
growth avenues. go-to-market?
Alright, understood. I would break this problem into 3 parts. First, I would check if The client should enter the market by distributing to department stores coupled
the entry into the Indian market makes economical sense or not. Next, if it does, I with online options, limiting costs of testing the market. Once this has proven
would like to explore the different entry modes looking at our client capabilities and successful, they should think about rolling out a series of brick-and-mortar stores,
the market dynamics. Finally, I would be looking at the go to market strategy for beginning by flagships stores for the brand which will help them position in the new
our client. market.
That makes sense. Please try to analyse the economic sense in this venture using When going for a brick and mortar store network the client could again explore
the given data (Annexure 1). partnership options to develop a network faster.

© Management Development Institute, Gurgaon | 2024- 2025 61

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 5: High-End Fashion Retail

Industry Retailing

Level Advanced

The launch strategy makes sense. Could you list some major factors and risks for Annexure 1
the client in this business.
Revenue & Profit margin of the competition in this industry
Some of the major factors and risk that could be considered are new organizational
culture compared to US and Europe, exchange rate risks, logistics times and costs. Total Revenue = $1B

What are some future opportunities that the client could look at to grow in the
Category Market Share
market?
High End 20%
So, since the client has complete control in the value chain right from
manufacturing to retailing they should look at moving more parts of the value chain Traditional 30%
into India and cut down on costs. This would also allow them to provide better
prices to consumers by saving on import duties. To start on this the client could Value Driven 50%
also partner with local high-end designers where it would be easier to start a local
value chain.
Current Players in the High-End Market
I think that satisfies me we can summarise and close the case here.

Sure, based on the economic analysis and client’s expectations on returns we Market Size Competitor
Competition Gross Margin Remarks
identified that it makes sense to enter the market. The available information (Revenue) Origin
indicates that our entry strategy should be through a standalone entity.
The client should start by distributing to departmental stores and online stores to ABC 40% China 45% Steady Margins
understand market behaviour before launching brick-and-mortar stores in targeted
locations. We should also consider risks and opportunities associated with this Dropping
venture and identify how to minimize them. XYZ 25% India 10%
Margins
Thank you I think that sums it up well.
PQR 35% UK 30% Steady Margins

The overall market (in revenue terms) is expected to grow by 10% in the
next year. And the client is expecting to capture 20% market share in one
year due to its access to high end brand retail.

© Management Development Institute, Gurgaon | 2024- 2025 62

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 5: Summary

Prompt: Your client manufactures, import/exports and retails high-end branded apparel in the US. They are considering entering the Indian market, and you
have been hired to determine whether they should enter this new market or not.

Case Facts Interviewee Feedback Approach

▪ About client What Went Well? Market Financial Operational Strategy for
Third biggest high-end Market Entry
▪ Identified risks and attractiveness feasibility feasibility entering
apparel retailer in the US by
opportunities very well and
revenue and they have been
covered most of the points
in the business for over 50
coherently
years Costs incurred by
Reason Market size Regulations2 Standalone
▪ Developed a very effective client1
▪ Target segment
go-to-market strategy
Individuals in the high-
considering the important
income group
requirements in the fashion Market growth Resource
▪ Reason for market entry segment Objective Break-even point Joint Venture3
potential availability
i. Fast growing demand for
Common Mistakes
high-end fashion in India
ii.Positive macroeconomic ▪ Focusing only on quantitative Client’s expected Mergers &
trends analysis and not considering market share Acquisitions
other qualitative aspects
▪ Market size & growth
potential
Annexure 2 Increase in
market share per
year
Recommendations

Conclusion: Client should enter the market as the calculated returns Uninvolved Branches
match their expectations and should focus on a standalone entry
Short Term Recommendation 1. Financial feasibility has not been discussed in the case; it has been assumed that the client has the required
▪ The client should start by distributing to departmental stores and financial capability to expand
online stores to understand market behavior before launching brick- 2. Regulations and resource availability were not mentioned in the case and were assumed to not be obstacles
and-mortar stores in targeted locations during the entry
▪ Perform analysis of risks and opportunities based on client 3. Since the client has the required capability and resources, they don’t need to think about entering in any JV
capabilities or alliances

Long Term Recommendation

▪ Client should look at moving more parts of the value chain into India
and cut down on costs

© Management Development Institute, Gurgaon | 2024- 2025 63

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 6: Music company

Industry Music

Level Advanced

Prompt: Our client, a prominent music company with an annual revenue of $250 million, is considering a strategic expansion into the theatre industry. Could you guide us
through this?

Just to clarify my understanding, our client is a prominent music company with an So, the weekly revenue potential is $100 x 500 seats x 70% occupancy x 5 shows
annual revenue of $250 million. They are thinking of a strategic expansion into the = $175,000. Annually, that would be around $9.1 million, considering operational
theatre industry. weeks. This is below the $20 million target. It highlights the need for additional
revenue streams such as merchandise, sponsorships, or special performances.
That is correct.
Precisely. Now, what’s your take on the competitive landscape?
Let’s begin with an in-depth market analysis. Do we have specific data on the size,
growth trends, segmentation, and customer demographics of the theatre industry? With major players dominating 60% of the market through traditional productions,
Yes, the theatre industry is currently valued at $12 billion with an expected annual our client’s focus on innovative, tech-enhanced theatre could differentiate them.
growth rate of 5%. The key segments include traditional theatre goers, making up However, they need to be wary of the competitive response to their entry.
50% of the market, and a growing segment interested in tech-driven, immersive
experiences, accounting for 30%. The primary age group is 25-45 years. And the regulatory aspect?

Noted. Now, let's move to financial feasibility. What's the client's budget for this Licensing costs and compliance with regulations could add up to $3 million in the
venture and their revenue targets? first year. Ongoing compliance costs should be around 5% of the operational costs
annually.
The client is willing to invest $60 million initially. They aim for a $20 million
revenue in the first year, projecting a 20% annual increase in subsequent years. Based on this, what’s your recommendation?

Interesting. Regarding operational feasibility, what's the plan for resource The venture is challenging yet promising. The client has the financial capability, but
allocation, infrastructure, and staffing for theatre operations? the initial revenue target seems optimistic given the unit economics. A more
realistic approach would be to start with a lower revenue expectation, focusing on
They intend to invest $25 million in infrastructure, including a state-of-the-art building a strong brand presence in the market. They should explore additional
theatre. Staffing and initial productions are estimated to cost another $15 million. Annexure
revenue streams to meet financial goals. A pilot production could validate the
They'll hire experienced theatre personnel and leverage their existing music concept and provide valuable market insights.
production team.
Any final thoughts?
Let's delve into unit economics. What are the expected ticket prices, average
attendance, and frequency of shows? The client should proceed cautiously. They need to monitor market response closely
and be ready to adapt their strategy. Building partnerships with established theatre
companies could offer critical insights and aid in navigating the competitive and
The average ticket price is set at $100. They aim for a 70% occupancy rate in a
regulatory landscape. It’s also vital to continuously analyze and adjust unit
500-seat theatre. Initially, there will be 5 shows per week.
economics to ensure long-term profitability.
© Management Development Institute, Gurgaon | 2024- 2025 64
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 6: Summary

Prompt: Our client, a prominent music company with an annual revenue of $250 million, is considering a strategic expansion into the theatre industry. Could
you guide us through this?

Case Facts Interviewee Feedback Approach

• Reason for market entry What Went Well? Market Financial Operational Strategy for
i. Theatre industry valued at $12 • Identified market size, Market Entry
attractiveness feasibility feasibility entering
billion with an expected annual segmentation, and
growth rate of 5%. growth trends.
ii. Opportunity to differentiate
with innovative, tech-enhanced • Calculated break-even Costs incurred by
theatre productions. analysis. Reason Market size Regulations Standalone1
client

• Considered additional
• Market size & growth potential Resource
revenue streams Market growth
$12 billion industry size. 5% annual Objective Break-even point availability and Joint Venture
(merchandise, potential
growth rate. Expected revenue: $20 allocation
sponsorships).
million in the first year with 20%
annual increase. Common Mistakes
• Underestimating Client’s expected Mergers &
competitive response. growth in revenue Acquisitions
• Cost and Pricing
Initial investment: $60 million,
• Not fully considering
Infrastructure: $25 million, Staffing Increase in
licensing costs and
and productions: $15 million, Ticket market share per
compliance.
price: $100, Occupancy rate: 70%, year
Show frequency: 5 shows per week
Recommendations
Uninvolved Branches
Conclusion: Proceed cautiously with a focus on innovative productions
and additional revenue streams. Monitor market response and adjust
strategy accordingly. 1. Strategy for entering: Details on entry strategy not discussed and thus out of scope.

Short Term Recommendation

• Start with a lower revenue expectation and build a strong brand
presence.
• Explore additional revenue streams (merchandise, sponsorships).
• Pilot productions to validate the concept.
Long Term Recommendation
• Continuously analyse and adjust business strategies to ensure long-
term profitability.
• Build partnerships and navigate competitive market dynamics.
© Management Development Institute, Gurgaon | 2024- 2025 65
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 7: Automobile manufacturer

Industry Automobile

Level Advanced

Prompt: Your client is a premium American automobile manufacturer aiming to enter the Indian market with their latest electric SUV priced at ₹28 lakh. As part of their
expansion strategy, you've been tasked to advise them. How should they go about it?

To confirm my understanding, the client is already established in the electric SUV For a new entrant in a competitive market like India's, a 5-10% share in the first 2-
segment and now wants to expand into India, correct? 3 years is aggressive but achievable. That would be around 225-450 vehicles per
year. To reach this, we must ensure a strong value proposition.
Yes, precisely.
Do we have insights on consumer behaviour in this segment ?
I'd like to start by asking a few clarifying questions. First, what is the client's value
proposition for the Indian market? Yes, consumers in the premium segment value brand image, after-sales service,
and exclusivity.
The client's SUVs are known for their luxury and high-tech features.
Our client can leverage their global brand image and focus on providing an
Why has the client chosen India for expansion? What are their objectives post exceptional customer experience to differentiate themselves.
entering the Indian market?
Considering stiff competition and potential higher taxes, how should they enter?
They are interested in India due to its growing economy and interest in electric
A Joint Venture with a local player could be beneficial. For example, if we partner
vehicles. The primary objective is to establish a strong market presence and
with company ABC, which has a 2% share of the premium car market but is
capture a share of the luxury EV market.
struggling with their EV models, we could target a combined market share of 7% in
Understood. I'd approach this in three parts. First, assess whether entering the the premium EV segment within the first year, translating to approximately 315
Indian market makes economic sense. Next, understand local market dynamics and vehicles.
consumer behaviour.
How would the financials work out in this Joint Venture?
Alright, let's start with the economic sense.
If we're aiming to sell 315 vehicles in the first year at ₹28 lakh each, that's a
Do we have data on the current market size for electric SUVs in India and the revenue of ₹88.2 crores. Assuming a net margin of 10% after all expenses,
competitive landscape? including the JV setup, we’re looking at a profit of ₹8.82 crores in the first year.
We’d need to ensure that the operational costs, including the JV investment, don't
India's premium vehicle segment is about 1.5% of the total market, with electric exceed this margin.
vehicles accounting for a small but growing fraction. Assuming a total annual car
market of 3 million units, that's around 45,000 premium cars. If the electric And what about the risks?
segment captures even 10% of this over the next 5 years, that’s 4,500 premium
The major risks include market acceptance, competition response, and operational
electric vehicles annually.
execution. We can mitigate these through thorough market research, a phased
That's a good starting point. What market share does the client aim for? rollout plan starting in metropolitan areas, and leveraging ABC's existing
infrastructure.
© Management Development Institute, Gurgaon | 2024- 2025 66
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 7: Automobile manufacturer

Industry Automobile

Level Advanced

Could you elaborate on the roll-out plan?

We could start in Delhi and Mumbai, which have the highest density of premium car
buyers. A phased approach allows us to gauge customer response and refine our
strategy. If we capture 3% market share in these cities, which sell about 15,000
premium cars annually, that would mean 450 cars, aligning with our targets.

That's a comprehensive analysis. How would you position the SUV?

Positioning should emphasize sustainability, luxury, and performance. We can

conduct marketing campaigns highlighting the SUV's features, such as its range,
charging speed, and luxury interiors, which cater specifically to the Indian
consumer's aspirations and lifestyle.

Interesting approach. We can end the case here.

© Management Development Institute, Gurgaon | 2024- 2025 67

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 7: Summary

Prompt: Our client, a prominent music company with an annual revenue of $250 million, is considering a strategic expansion into the theatre industry. Could
you guide us through this?

Case Facts Interviewee Feedback Approach

• Reason for market entry What Went Well? Market Financial Operational Strategy for
• Growing economy and interest in • Clarified value Market Entry
attractiveness feasibility feasibility entering
electric vehicles in India. proposition: Luxury
• Objective to establish a strong and high-tech
market presence and capture a features.
share of the luxury EV market. • Assessed economic Costs incurred by
Market size & growth potential sense of entering the Reason Market size Regulations1 Standalone
• client
Premium vehicle segment is 1.5% of Indian market.
the total market, with electric • Analysed consumer
vehicles accounting for a small but behaviour and Market growth Resource
growing fraction, Total annual car competitive landscape Objective Break-even point Joint Venture
potential availability1
market: 3 million units, Potential:
Common Mistakes
45,000 premium cars annually, Goal:
• Not considering the
Capture 10% of this segment over
potential competitive Client’s expected Mergers &
the next 5 years, approximately
response and higher market share Acquisitions2
4,500 premium electric vehicles
taxes.
annually
• Overlooking the
• Cost and Pricing Increase in
operational costs,
SUV price: ₹28 lakh, Initial target: market share per
including JV
Sell 315 vehicles in the first year, year
investment.
Revenue target: ₹88.2 crores in the
first year, Net margin target: 10%,
yielding a profit of ₹8.82 crores.
Uninvolved Branches
Recommendations
1. Regulations and Resource availability: Assumed not to be obstacles during entry.
Conclusion: Proceed with a phased approach, starting in Delhi and
Mumbai to gauge customer response and refine strategy. 2. Strategy for entering: Details on mergers & acquisitions not discussed and thus out of scope.

Short Term Recommendation

• Emphasize sustainability, luxury, and performance in marketing.
• Capture 3% market share in initial cities.
• Conduct market research to mitigate risks
Long Term Recommendation
• Leverage partnerships to enhance market presence and operational
efficiency.
© Management Development Institute, Gurgaon | 2024- 2025 68
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 8: Hotel chain

Industry Hotel

Level Advanced

Prompt: Your client is a hotel chain based in Gurugram, looking to expand into a new city. They've narrowed it down to three prospects: New Delhi, Pune, and Hyderabad.
They need a recommendation on which city to choose for expansion.

To start, we should evaluate each city based on a set of criteria such as market Assuming they can achieve a similar occupancy rate and ADR in the new location,
demand, competition, cost of expansion, and potential return on investment. Could the annual revenue potential for each city would be the product of the ADR,
we begin by discussing the current performance of our client’s hotels in Gurugram? occupancy rate, and number of rooms. Shall we use a hypothetical number of 200
rooms for our calculations?
Of course. In Gurugram, their occupancy rate averages 75% with an average daily
rate (ADR) of ₹10,000. They are known for excellent service and have a strong Yes, let's proceed with that assumption.
brand presence in the luxury segment. They expect to replicate this success in the
new city. Taking New Delhi's competitive market into account, a conservative estimate of a
60% occupancy rate might be realistic, resulting in potential annual revenue of
Good to know. Let's look at the market size and growth potential in each target ₹43.8 crore. For Pune, with a moderate competition, let's estimate a 65%
city. Do we have data on the number of tourists and business travellers visiting occupancy rate, which would lead to ₹47.45 crore in revenue. Hyderabad, with the
New Delhi, Pune, and Hyderabad? least competition, could potentially achieve a 70% occupancy rate, resulting in
₹51.1 crore.
Yes, New Delhi sees approximately 2 million tourists annually, Pune 1.2 million, and
Hyderabad 1.5 million. All cities are expected to grow at a rate of 5-7% per year. Interesting. And how would you suggest we weigh these revenue potentials against
the costs and risks?
Let's consider the competition. What is the current saturation of luxury hotels in
these cities? We should perform a break-even analysis. For instance, if New Delhi's high cost of
expansion means it would take 10 years to break even, while Pune and Hyderabad
New Delhi is highly competitive with a luxury hotel occupancy rate of about 70%, would take 7 and 8 years respectively, Pune presents the most attractive option
Pune is moderately competitive at 65%, and Hyderabad is less so at 60%. from a financial perspective.
Now, regarding the cost of expansion, we'd need to factor in the cost of acquiring And what about the qualitative factors, such as brand alignment and market
land or a building, construction or renovation costs, and the cost of obtaining potential?
necessary permits and licenses. Any insights on these?
Brand alignment is crucial. New Delhi offers the prestige of the capital city, but the
Preliminary estimates suggest a total expansion cost of ₹150 crore for New Delhi, high competition might dilute our client’s brand. Pune, being an educational and IT
₹100 crore for Pune, and ₹120 crore for Hyderabad, given real estate and hub, has a growing market with a younger demographic that could be a good brand
construction costs. fit. Hyderabad, with its mix of tourism and business travel, also aligns well with our
client's luxury positioning.
With those figures, we can calculate expected returns based on our client's
performance in Gurugram. Taking all this into account, which city would you recommend for expansion and
why?
© Management Development Institute, Gurgaon | 2024- 2025 69
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 8: Hotel chain

Industry Hotel

Level Advanced

Considering the balance between cost, competition, and market potential, I would
recommend Pune. It has a favorable market for luxury services, a growing
economy, and the cost and time to break even are the most attractive. It offers a
strong opportunity for brand growth without the intensity of competition found in
New Delhi.

© Management Development Institute, Gurgaon | 2024- 2025 70

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Market Entry Case 8: Summary

Prompt: Hotel chain known for excellent service and strong brand presence in the luxury segment, with an average occupancy rate of 75% and an average
daily rate (ADR) of ₹10,000 in Gurugram.

Case Facts Interviewee Feedback Approach

• Reason for market entry What Went Well? Market Financial Operational Strategy for
i. Expanding brand presence in • Evaluated market size Market Entry
attractiveness feasibility feasibility entering
new markets. and growth potential.
ii. Leveraging growth potential in • Considered
major Indian cities. competition and cost
of expansion. Costs incurred by
Market size & growth potential • Conducted break- Reason Market size Regulations1 Standalone
• client
New Delhi: 2 million tourists even analysis for each
annually; Pune: 1.2 million tourists city.
annually; Hyderabad: 1.5 million Resource
tourists annually; Growth rate for all Objective Market potential Break-even point Joint Venture2
Common Mistakes availability1
cities: 5-7% per year.
• Not weighing revenue
potentials against
• Cost and Pricing
costs and risks. Client’s expected Mergers &
Expansion cost: New Delhi: ₹150
• Overlooking market share Acquisitions2
crore; Pune: ₹100 crore; Hyderabad:
qualitative factors like
₹120 crore.
brand alignment and
Occupancy rate: New Delhi: 60% Increase in
market potential.
Pune:65%; Hyderabad: 70%. market share per
ADR: ₹10,000. year
Hypothetical number of rooms: 200

Recommendations Uninvolved Branches

Conclusion: Considering the balance between cost, competition, and 1. Regulations and Resource availability: Assumed not to be obstacles during entry.
market potential, Pune is recommended for expansion
2. Strategy for entering: Details on mergers & acquisitions, and JV not discussed and thus out of scope.
Short Term Recommendation
• Focus on capturing a moderate market share in Pune.
• Leverage existing brand strength and service quality.
• Conduct market research to refine strategy.

Long Term Recommendation

• Continuously analyze market response and adjust strategy.
• Explore further expansion opportunities based on initial success.
© Management Development Institute, Gurgaon | 2024- 2025 71
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Framework

Framework
Types of cases where in you are to price a product, commodity or service. The idea is to reach an optimal range of price points using the pricing models

Pricing Models

Minimum Cost : Cost

Cost Based Pricing Competitor Pricing Value based Pricing based pricing
Maximum Cost : Value
based pricing
❑ Cost of Goods Sold (COGS) - ❑ Availability of Substitutes ❑ Value proposition of the Product
Fixed Costs and Variable Costs
❑ Competitor’s Price Points ❑ How much does the customer Competitor based pricing
❑ Expected break-even Point spend on a similar utility? would require analysis on
❑ Company’s positioning – the difference between the
Supply and Demand
❑ Profit Margin over Break-even Premium or Economy competitors offerings and
❑ How much is the customer the clients
❑ R&D Expense – Does the ❑ Company’s vision – Profit
willing to pay for such a
company plan to recover it or is Margins vs. Market Share
product?
it a sunk cost?
❑ Price = ~ Competitor’s Price
❑ Price = Value Appropriate to
❑ Price = COGS + Profit Margin (in line with organization
the Product
goals)

High Level Analysis

❑ Reiterate the problem to have a clear understanding of the case. Understand the motives of the pricing
❑ Start with a cost based pricing in order to get the minimum cost that the product, commodity or service would require. Pricing would need to be greater than
this cost. CBP method is heavy on guesstimate and can be a make or break
❑ Between competitor and Value based pricing, choose the one appropriate to the case in order to get the required upper limit

© Management Development Institute, Gurgaon | 2024- 2025 72

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 1: Fertilizers

Industry Chemicals

Level Beginner

Prompt: Your Client is a US based chemicals manufacturing company and wants to launch a new fertilizer brand in the Indian market. You are required to suggest an
optimal price point for this product. How would you go about it? What are your considerations?

I would like to start with a few questions. I would like to know more about the Okay. So, at 20% margin over the break-even, the price of the produce would be
client. What is the main business of the client? What are its products? Rs. 480. Now to check if this price is viable, I would like to do a competitor
benchmarking exercise. Do we have any data on the competitors in this market –
The client manufactures chemicals and fertilizers. They currently operate in the US their products and price points?
and now have come up with a new type of fertilizer for the Indian market.
Competitors’ products sell for an average price between Rs 500/kg to Rs 600/kg.
Okay. Is there any particular customer segment in India that they are targeting? But let’s look at the value that the client’s product creates.
They are targeting Punjab and Haryana based farmers, as this fertilizer is for rice Okay. How much area of land does the 1 kg packet of fertilizer cover?
and wheat farming.
1 kg packet of the fertilizer can be used over 1000 sq. ft area of land. Also, do note
Is it different from the fertilizers people generally use in Punjab and Haryana? that for one cycle of crops, the fertilizer needs to be used twice.
Yes. It enhances the growth by 20% and there are no similar products in the Noted. I’d like to quantify the value addition that our product is capable of. Wheat
market – either locally or globally produced. and rice are sown in different seasons. I’ll assume the entire period from sowing to
Understood. So, there are three ways we can approach the pricing exercise – a harvesting to be 5 months for both rice and wheat. Since our fertilizer enhances
cost-based model, a competitor driven pricing model, and a values-based pricing growth by 20%, the total cycle time of 10 months will reduce to 8 months. So we
model. We can start with cost-based pricing as it will act as a benchmark. have farming land available for an extra 2 months. Suppose, the area of land is
1000 sq. ft. for one cycle of wheat and rice farming, in one year we would need 4
Sure. Sounds good. Please start with cost-based pricing. kg of the fertilizer.
I expect there were R&D costs in development. Do we have any data for the same? 4 kg of fertilizer is equivalent to 1000 sq. ft. land for two months. 1 kg would be
equivalent to 250 sq. ft. land for 2 months. We could calculate the value created
While this is a good point to start with, I would like you to consider R&D and out of 250 sq. ft. of land for two months. Farmers can use this land for farming
product development costs to be sunk costs for time being. crops with shorter cycle times. Is there any data on this monetization capability?
Alright. I would then like to focus on the value chain of the fertilizer. I would That’s good. Assume the value to be Rs 100 for 250 sq. ft of land for 2 months.
assume it involves the same steps to deliver a packet of fertilizers as any packaged
product. Do we know if we are going to be manufacturing in India? And what would Okay, thank you for that data. So we can sell the product for a premium. My
be the cost of the product? recommendation for price would be between Rs. 650 to Rs. 700. This takes into
account the premium quality of our product and extra value that it is creating.
Yes we will be manufacturing in India. The cost of 1kg packet of the fertilizer is
expected to be Rs. 400. Assume a 20% post break-even profit margin. Okay. That helps. Thank you. We can close the case here.

© Management Development Institute, Gurgaon | 2024- 2025 73

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 1: Summary

Prompt: Your Client is a US based chemicals manufacturing company and wants to launch a new fertilizer brand in the Indian market. You are required to
suggest an optimal price point for this product. How would you go about it? What are your considerations?

Case Facts Interviewee Feedback Approach

▪ Product Portfolio What Went Well?

Pricing
Chemicals and fertilizers ▪ Interviewee was able to start
with cost-based pricing and
▪ Targeted Market Segment
then move on to competitor-
Punjab and Haryana for rice
based pricing and value-
and wheat farming Competitor
based pricing Cost based Value based
based
▪ Product enhances growth by
▪ Good with the quantitative
20%
aspect of the case
▪ R&D and product
Common Mistakes R&D1 Price2
development costs are sunk
▪ Not asking more preliminary
▪ Expected: Price: ₹400/kg,
questions to understand the
Margin: 20% post break-even
case better
▪ Competitors’ products Other fixed
▪ Calculations can be more Efficiency
pricing: ₹500/kg to ₹600/kg costs1
structured
▪ 1 kg packet used on 1000 sq.
ft area; 1 crop cycle needs a
2 rounds Variable costs
▪ Value of 250 sq. ft of land for
2 months is ₹100
Recommendations Uninvolved Branches

Conclusion: The product may be priced at a premium over the 1. R&D costs are sunk costs
expected Rs 480 (20% margin over the price of ₹400) at around ₹650 2. Product development costs are sunk costs
to ₹700 3. Since the client’s product is a unique product, approach should be focussed on value-based pricing rather
than competitive pricing
Short Term Recommendation
▪ 1 kg of fertilizer would give an extra value of 250 sq. ft of land for 2
months to the farmers
Long Term Recommendation
▪ Price at an initial price of ₹650 to ₹700 (which would be a premium
price)

© Management Development Institute, Gurgaon | 2024- 2025 74

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 2: Multipurpose Furnitures

Industry Manufacturing

Level Beginner

Prompt: Your Client is a major steel manufacturer. The company plans to expand its business and move into the home furnishing space. It wishes to launch a multipurpose
furniture – a bed cum sofa and a workstation, all in one. At what price point should the company launch this product?

Sure. I’d like to ask a few preliminary questions to understand the situation and the The cost of the product is Rs. 10,000 for one set. The company has spent Rs
requirements better. How exactly does the product function? What other utility 1,00,00,000 on R&D and Product Development.
does it have?
Does the company plan to recover the R&D cost through its pricing? If so over how
many years?
It is a modular system. It is a sofa with workstation capabilities that can be
extended to form a single bed. The value proposition is that it is multipurpose and Yes. The client wants to recover the product development costs. They wish to do so
provides space saving. The product is made up of 70% steel and 30% wood. in 2 years or earlier. You can assume break-even as both necessary and sufficient.

That’s interesting. What geographies is the client targeting? Alright, thank you. So there are both fixed and variable costs that have to be
recovered. However, since break-even is sufficient over two years, only the fixed
Our client is based out of India and we are targeting Indian market. Since it is a costs will have to be recovered over this time period. I’m assuming the contribution
premium product our target customer belongs to tier 1 cities in India. margin to be zero. Do you have any data points on how many such sets the client
is expected to sell this year and the one that follows?
Okay. Who are the competitors? Does this kind of multipurpose furniture exist in
the market? For the first two year, the client will only be selling in the NCR region. Initial
research shows that the client will be able to sell about 150 of these units in the
first. Assume a 10% Y-O-Y on the sale volume for the subsequent year.
The furniture industry is 20% organised retail and while 80% of it is unorganised.
We have one major competitor who enjoys a market share of ~60% in organized
retail. The others are small players. No one among the major players have Okay. That’s helpful. I’ve assumed the Contribution Margin (Selling Price/Unit –
introduced this kind of furniture. However, furniture makers in the unorganised Variable Cost/Unit) to be zero. Year 1 Sales = 150 Units. Year 2 Sales (@10%
sector have made such product based on customer’s demand. growth) = 165 Units. Total = 315 Units. Cost to be Recovered = 1,00,00,000.
Per Unit Selling Price = Rs. 32,000. Per Unit Variable Cost = Rs. 10,000. Total Sale
Price for a 2-year Break-even = Rs. 42,000
Alright. There are three ways we can approach the pricing exercise – cost-based
pricing, competitor driven pricing, and values-based pricing. I would first like to So, the client can look at pricing the product between Rs. 40,000 and 45,000. I’d
start with the cost-based pricing because it will give me a minimum price point. like to do a sanity check at this point. What are the price points at which our
Can I get an idea about the COGS? competitors sell their products?

© Management Development Institute, Gurgaon | 2024- 2025 75

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 2: Multipurpose Furnitures

Industry Manufacturing

Level Beginner

Our major competitor sells single metallic bed for Rs. 20,000 and the sofa set for
Rs 25,000.

Alright, that helps. We have a multi-purpose convertible product. Basis the

competitor’s price we can price the product between the price of the more
expensive product (the sofa set) and sum of both products. So, we should consider
pricing it between Rs. 25,000 and Rs. 45,000.
However, there are two reasons why the price should be on the higher end of the
price range. First, it is offering a unique value proposition (saving space) which the
competitor is not offering. Further, it is a premium product targeted only towards
the tier 1 city customers. This pricing is also in alignment with the price points we
arrived at to recover the R&D costs.

Yes, that makes sense. Good. What is your final recommendation? Anything you’d
like to call out explicitly?

The client can look at pricing the product between Rs. 40,000 and 45,000. This is in
line with both the analyses – recovering R&D costs and value based pricing.
However the client needs to run an initial analysis to understand the willingness of
the customer to pay this amount for such a product. Off the bat, it seems
reasonable, but further analysis will be needed. Accordingly, recovery periods and
profit margins may have to be adjusted. The client can also look at other selling
opportunities and use cases for this product – such as hotel chains, airport lounges,
SPAs and so on. These B2B sales may have higher revenue generating potential for
the client.

Great. That’s a good analysis. We can stop here. Thank you!

© Management Development Institute, Gurgaon | 2024- 2025 76

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 2: Summary

Prompt: Your Client is a major steel manufacturer. The company plans to expand its business and move into the home furnishing space. It wishes to launch
multipurpose furniture – a bed cum sofa and a workstation, all in one. At what price point should the company launch this product?

Case Facts Interviewee Feedback Approach

▪ Product Portfolio: Bed cum What Went Well?

sofa and a workstation Pricing
▪ Asked all the important
▪ Targeted Market Segment: preliminary questions
Tier 1 cities only since it is a
▪ Interviewee was able to start
premium product
with cost-based pricing and Competitor
Cost based Value based
▪ Industry: 20% organized then factor in competitor- based
retail & 80% unorganized and based pricing and value-
one major competitor with a based pricing
market share of ~60% in
Common mistakes R&D Price Space saving
organized retail
▪ The questions throughout the
▪ Competitor Price: Metallic
case can be more pointed
bed for Rs 20,000 & Sofa set
for Rs 25,000
Other fixed
Efficiency2
▪ COGS/set = Rs 10,000, R&D costs
= Rs 1,00,00,000
▪ Expected Sales: 150 for the
first year, 10% YoY increase Variable costs1
in sale volume, the
subsequent year

Recommendations Uninvolved Branches

Conclusion: As per R&D recovery and value-proposition analysis, the 1. Variable costs can be ignored since break-even is sufficient over two years
pricing of the product can be between Rs 40,000 and Rs 45,000 2. Efficiency of the product does not need to be compared to the competitor’s product since the client’s
product is a premium category product
Short Term Recommendation
▪ Space-saving value proposition and alignment with the price
calculated to recover the R&D costs
Long Term Recommendation
▪ B2B opportunities such as hotel chains, airport lounges, SPAs, and so
on need to be explored since they may have a high revenue-
generating potential

© Management Development Institute, Gurgaon | 2024- 2025 77

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 3: Hotel Business

Industry Tourism

Level Intermediate

Prompt: Your client is a multi-hotel chain franchise and is planning to add waterpark facilities in one of the hotels. You have been staffed to help the client identify if this is
the right investment opportunity or not.

I would like to start with a few questions. What is the client’s objective behind Client is looking to recoup his capital in 4 years.
opening a waterpark in their hotel? Which hotel they have chosen? What is the
client’s current clientele? Okay. Let’s move to variable costs then. For this aspect, could you share the
information on no. of rooms in the hotel, the average occupancy rate, variable cost
After a lot of consideration, the client is able to narrow down to the hotel in per room for a night?
Gurgaon. The current clientele consists primarily of business travelers. The client
believes that there are a lot of potential benefits of opening up a waterpark like Sure! There are total 150 rooms in a hotel and the average occupancy rate for the
creating family friendly image, year-round business and potential to expand their year is 40%. The average cost of a room per night is ₹1,000.
customer base to families.
Thank you. Based on these numbers, total fixed cost is ₹10 Cr + ₹2 Cr x 4 + ₹50 L
Thanks! Next I would like to understand if the client has any competitors and what x 4 = ₹20 Cr
is our differentiating factor against the competitors. And Total variable cost for 4 years duration is 150 x 365 x 40% x ₹1,000 x 4 yrs. =
₹8.76 Cr
There are no competitors near our Gurgaon hotel currently and there is no Therefore, the total cost for 4 years = ₹28.76 Cr
indication for a new competitor to come up in the short run either. In order to achieve break even, the hotel must charge = ₹28.76 Cr / (150 x 365 x
Okay. So to analyze if this is the right investment opportunity, I will first do a 40% x 4) = ₹3,283 per room per night.
break-even analysis and find the pricing of hotel services. If the pricing is in sync That is correct. Go ahead.
with the customer and market expectations, then we can go ahead with this
planned investment. So, based on the cost based pricing model, the revenue which hotel must charge
per room per night is ₹3,283 in order to break even in 4 years. By taking a 20%
Makes sense.
Profit Margin, the price will come out to ₹3,940 per room per night.
I will first start with calculating the costs. Cost component can be broken into 2 Based on my real life experience, I believe this is very cheap for a franchise based
parts – fixed and variable. Here, fixed costs would be one time equipment and hotel chain in Delhi NCR Region which has no competition currently or in the near
setting up cost, SG&A, insurance and variable costs would be a room’s maintenance future. Hence, we should proceed ahead with a premium pricing model by charging
cost. Do you have any relevant data for the same? a premium of ~52% and pricing a room at ₹5,000 per night.
Yes. Let’s first analyse the fixed costs. The one time equipment and setting up cost This is a standard price for hotels in this region and people would be willing to pay
is ₹10 Cr, SG&A cost per year is ₹2 Cr and insurance cost per year is ₹50 lakh. this amount.

Thank you. What payback period is the client looking at? Apart from this, is there any other way for client to monetize this business?

© Management Development Institute, Gurgaon | 2024- 2025 78

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 3: Hotel Business

Industry Tourism

Level Intermediate

Yes. The client can proceed in the following ways:

1) Include a separate ticket/fee for waterpark entry only
2) merchandising and sales of swimming suits and accessories
3) Promotional ventures in collaboration with other brands
4) Food and beverage in the waterpark
Great. Are there any challenges which the client might face while going in this
direction of a waterpark?
First of all, the major challenge for the client will be to asses the requirements for
setting up a waterpark, if the client possess the required competency or not.
Then, there are a lot of regulatory and health risks involved in such a business
model. The hotel will open its doors to potential lawsuits in case of any mishaps in
the waterpark.
Also, the hotel’s clientele is currently business focused and there is a possibility
that this waterpark might end up alienating these customers.

Perfect. Very well thought out. Let’s end the case here.

© Management Development Institute, Gurgaon | 2024- 2025 79

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 3: Summary

Prompt: Your client is a multi-hotel chain franchise and is planning to add water park facilities in one of the hotels. You have been staffed to help the client
identify if this is the right investment opportunity or not.

Case Facts Interviewee Feedback Approach

▪ About the client: Client is a What Went Well?

multi-hotel chain franchise Pricing
▪ Asked all the important
with business travellers
preliminary questions
clientele planning to add
waterpark facilities in one of ▪ Interviewee was able to
the hotels divide the costs into fixed and Competitor
Cost based Value based
variable and then move based2
▪ Competitors: No current or
forward
potential competitors
▪ Also added touched the
▪ Fixed Costs: One time
concept of insurance Premium price
equipment & setting up cost R&D1 Price2
for UVP
is ₹10 Cr, Annual SG&A & Common Mistakes
insurance costs of ₹2cr. &
₹50 lakh respectively to be ▪ Not breaking down the
recovered in 4 years opportunities into buckets
before delving into each Fixed costs Efficiency2
▪ Variable Costs: 150 rooms further
in a hotel and the average
occupancy rate for the year is
40%. The average cost of a Variable costs
room per night is ₹1,000
Recommendations
Uninvolved Branches
Conclusion: As per the breakeven analysis and ensuring value-based
premium pricing - each hotel room could be charged ₹5,000 for a night
1. Since the case is related to a service, there are no R&D costs involved
Short Term Recommendation 2. No competitors near the client’s hotel and no indication of any hotel coming up in the near term either
▪ Major challenges for setting up waterpark facilities would include set-
up requirements, regulatory and health risks, alienating existing
clientele
Long Term Recommendation
▪ Additional revenue potentials: Admission fee, swimsuit
merchandising & sales, food & beverage, promotional ventures with
other brands

© Management Development Institute, Gurgaon | 2024- 2025 80

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 4: Pharmaceuticals Company

Industry Healthcare

Level Intermediate

Prompt: Your client is a United States based Pharmaceutical company who has just developed a drug for AIDS. You have been staffed to help the client identify the correct
pricing strategy for this drug in Emerging Markets.

Thank you. I’ll start with clarifying a few aspects about the client. Is our client the Consider the total R&D cost as $5B and the client wants to recover 40% of the cost
first corporation to have develop such a drug? Is the drug covered under US FDA from Emerging Markets. Also, it has been 10 years since the patent was issued.
Copyright laws? Which all geographies does the client cater to? What is the client’s
So, the aim is to recoup the $2B investment from Emerging Markets. And since the
objective?
drug patent limit is 20 years, the client has only 10 more years before generic
The client is the largest pharmaceutical company of the world with presence in drugs flood the market. Do we have any information on the dosage taken by a
over 200 countries. The AIDs drug is a novel drug and covered under the US FDA patient?
Copyright laws as well. The client wants to ensure that the drug is easily available
This drug is taken by a patient once a year. Assume only adult population.
to everyone as soon and easily as possible.
Let’s start with Emerging Asia first. The adult population would be ~ 3B. Since
Thank You! As the goal is to develop a pricing strategy for Emerging Markets, I’ll
education and access to healthcare is low in these countries, we can consider 0.2%
first break down Emerging Markets into relevant clusters with similar sociographic
people who have verified AIDS cases. Of this, our targetable audience should be
trends. Also, since the aim is to ensure quick and maximum reach of drugs, we
50% to give us the addressable market size as 3B x 0.2% x 50% = 3M
should go with a cost based pricing approach.
Correct. Let’s move on to the other two. And let’s assume 70% attainable market
Makes sense. Which countries do you think fall under Emerging Markets? and 300M adult population in Africa and 40% attainable market with 600M adult
Emerging Markets can be classified into : Emerging Asia, Latin America, Africa And population in Latin America.
Middle East. Could you please confirm if we are aligned on the geographies? Sure! For Africa, taking adult population of 300M with 9% AIDS patients and 70%
First, I would like to understand what all countries you are considering under attainable market, we get the total market size as 300M x 9% x 70% = 18.9M
Emerging Asia. For Latin America, taking adult population of 600M with 0.4% AIDS patients and
40% attainable market, we get the total market size as 600 M x 0.4% x 40% =
Sure! So Emerging Asia should have all the Asian countries except Australia, New 960K.
Zealand, South Korea and Japan. These markets have grown significantly and don’t This gives us total addressable market across all regions as 3M + 18.9M + 0.96M =
follow trends of the remaining developing countries. 22.8M
Okay, great! The overall alignment is correct. However, for this example, let’s just The addressable market is correct. Let’s move ahead.
exclude Middle East from the calculation.
Okay! Considering 1 dose given per year to a patient, the break even cost in the 10
Sure! First, I would like to understand the R&D cost associated to this drug and the years life cycle would be around $8.75 per dose. As the purchasing power in
time taken to develop the drug. Emerging Markets is low, what is the profit % client is aiming for?

© Management Development Institute, Gurgaon | 2024- 2025 81

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 4: Pharmaceuticals Company

Industry Healthcare

Level Intermediate

Client would get the majority of profits from the Developed Markets. From
Emerging Markets, they are aiming for only 10% profits.

Alright. So based on this assumption, The client should price this drug at $9.6. This
pricing is reasonable for the developing countries as well as this is being paid once
an year. Also, for the very poor population, the governments would be easily able
to include this cost in their welfare schemes.

Great! Can you summarize the case?

The client is looking to launch a novel AIDS drug and required our assistance in
pricing it in Emerging Markets. Since the objective for the client is to get maximum
profits from the Developed market and ensure maximum reach in Emerging
Markets, we decided to choose a cost based pricing model with 10% profits for the
client. This results in a final cost of around $9.6 per dose which fits in the
economical situation of these countries.

Thank you! We are done here.

© Management Development Institute, Gurgaon | 2024- 2025 82

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Pricing Case 4: Summary

Prompt: Your client is a United States based Pharmaceutical company who has just developed a drug for AIDS. You have been staffed to help the client
identify the correct pricing strategy for this drug in Emerging Markets.

Case Facts Interviewee Feedback Approach

▪ About the client: US-based What Went Well?

pharma company with a Pricing
▪ Interviewee was able to
newly developed novel drug
narrow down the target
for AIDS needing a pricing
markets and produce an
point for emerging markets
appropriate price
Competitor
▪ Drug: Drug is covered under Cost based Value based1
Common mistakes based1
the US FDA Copyright laws; it
has been 10 years since the ▪ Could have asked more
patent was issued; dose is preliminary questions to
taken once annually understand the case better R&D Price1
▪ Target market: Exclude ▪ Interviewee could have
Middle east from emerging covered the competitive and
market category; attainable value-based pricing aspects
markets - 40% in Africa, 20% as well for more Fixed costs1 Efficiency1
in Latin America comprehensiveness
▪ R&D cost: $5B, estimated
recovery from Emerging
Markets: 40% Variable costs1
▪ Aiming only for 10% profits
from Emerging Markets

Recommendations Uninvolved Branches

Conclusion: As per the cost-based pricing model, taking the client’s 1. The fixed and variable costs, competitive benchmarking and value-based pricing are not covered in the
requirements into consideration, the drug should be priced at $9.60 per context of the case
dose
Short Term Recommendation
▪ The drug should be priced at an economical price which would also
help the government include it in welfare schemes
Long Term Recommendation
▪ Keep the price lower than the competitive price so that the demand
for the drug is more (since it is priced economically)

© Management Development Institute, Gurgaon | 2024- 2025 83

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Merger & Acquisition Framework

Framework (Detailed Transactional View)

Used to solve cases pertaining to M&A transactions by detailing the entire value chain of the deal and looking at post deal integration

Overall M&A Deal

Transaction Beyond Transaction

Internal Need
Target Screening Due Diligence Deal Execution Post Deal Integration Exit Strategy*
Analysis

❑ Why the acquisition? ❑ Market ❑ Financial, ❑ Value of Deal ❑ Setup, Consolidation ❑ Stake Sell
understanding Operational & Legal
❑ Quantify goal ❑ Funding ❑ Governance ❑ Other PE
DD
❑ Company
❑ Timeline ❑ Technology
performance ❑ Management
Understanding
❑ Shortlisting &
Finalising ❑ Incorporation of Past
learnings
❑ Operating model

* If Applicable
© Management Development Institute, Gurgaon | 2024- 2025 84
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Merger & Acquisition Framework

Framework (Quick Environment View)

Used to solve cases pertaining to M&A transactions which involve five major components – Acquirer, Target, External Environment, Synergies & Risk

Overall M&A Deal

Acquirer Target Market Synergies Risk

❑ Deal Rationale ❑ Financial Position ❑ Business Overlap ❑ Individual & ❑ Integration Risks
Combined Value,
❑ Deal Financing ❑ Growth ❑ Market Size ❑ Regulatory
Key
❑ Revenue/Cost/Other Limitations
Considerations ❑ Deal Structure ❑ Capabilities ❑ Growth
Synergies
❑ Management ❑ Profitability
❑ Culture ❑ Competition

High Level Analysis

❑ Reiterate the problem to have a clear understanding of the case

❑ Combine the two frameworks in most cases to get a wholistic view of transaction. Let the interviewer guide on the particular branch to proceed whether to go
transaction based analysis (DTV) or Quick environment view (QEV)
❑ DTV can be used in case there is particular focus required on ‘Due Dilligence’, ‘Target Screening’, ‘Post Merger Integration’ or ‘Exit Options
❑ Use QEV, when M&A is a smaller part of the case. It’s usually a MECE principle to cover a deal quickly
❑ In case of DTV, usage of numbers would be high and technical – be careful on the terms used
❑ For additional reference, know the various ways, tools & databases that are used in companies who deal in M&A transactions

© Management Development Institute, Gurgaon | 2024- 2025 85

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Merger & Acquisition Case 1: Airlines Acquisition

Industry Airlines

Level Basic

Prompt: Your Client is a major airline operator and has been doing well financially in the recent past. The management is looking at potential M&A activities to grow the
company’s business. You’ve been on-boarded as a consultant and they client wants you to advice them on their M&A plans.

Sure. So, the client is looking to grow their business and wants to see if M&A is the That’s helpful. Going by this, I suggest the focus for the client should be on growing
right way of going about it. When client says that they want to grow, I am the market share and correspondingly revenues in the Asia-pacific region. An
assuming that focus is on augmenting revenues. Is that right? acquisition certainly would help achieve these targets quickly. Do we have any data
about potential targets that can be acquired and their capabilities.
Yes, the focus is on revenue growth.
Thank you. Now, I would like to break the analysis into two sections – a) I’d like That sounds logical. Yes, the client is looking at 3 potential companies to acquire.
understand if M&A is the right strategy for growth, and b) If so, what are the
Target 1 is an established airline operator in Asia, and provides luxurious passenger
potential targets we can look at.
services and operations across major Asian destinations and own 30% of the
Yes, that’s a good structure. Please proceed. market share in Asia.
Target 2 is an emerging airline operating out of Australia and provides connectivity
Okay, sure. First I’d like to understand a little about the client. What does the
between Eurasia and Australia. They have a strong cultural fit with the client and
business look like? What are the services provided, and where does the client
would be the easiest to acquire.
operate in?
Target 3 is a disruptive airline operating in Asia, and has grown rapidly and
The client offers passenger – economy & executive – and cargo services and captured 20% of the Asian market over the past 3 years. This airline does not offer
operates on multiple international routes. US, Europe, and Asia-pacific are the any luxury travel and operates between select destinations.
primary focus areas for the client. In Asia, the client primarily offers connectivity to
You can assume all of them are profitable operators and have strong finances.
tourist destinations from the US and Europe.

Okay. Since our focus is on improving top line for the client, I would like to Based on the client’s requirements, Targets 1 and 3 look to be good options. Target
breakdown the revenues and the competitive landscape by these parameters. Do 2 may however provide greater operational flexibility and ease of integration.
we know the channel split for revenues by service (passenger/cargo) and
geography? Besides, from a competitive perspective what are the clients’ market I would like to explore synergies and risks associated with acquiring each of these
shares by the same parameters? companies, and then make a suggestion.
Let’s start with revenue and cost synergies. I would like to know by how much the
You can ignore the service variants for now. Let’s focus on geography of operations.
client’s revenue and cost margins would change by acquiring each of these targets.
60% of our revenues flow in from US operations, 30% from European operations,
Do we see significantly different operational synergies with each of these targets?
and only 10% from operations in Asia-pacific. You can assume a similar distribution
for the market share in the three geographies.

© Management Development Institute, Gurgaon | 2024- 2025 86

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Merger & Acquisition Case 1: Airlines Acquisition

Industry Airlines

Level Basic

For the sake of simplicity, assume revenue contributions would only be marginally Based on the client’s current revenue and market share structure across
different in each of the cases. From an operating perspective our assets and geographies, Asia should be focus area for the client.
capabilities align most with Target 1. Target 3 has a much leaner operating model,
and Target 2 fits in between. Among the proposed targets, Target 3 offers the greatest growth potential,
complementing the client’s current operations. While Target 1 seemed to be a good
Alright. Looks like Target 1 might be an ideal acquisition at this stage. Finally, I option, Target 3 offers several advantages and brings in new operational
would like to look at the Asian air travel market to understand how it’s shaping up capabilities. Based on this, the client should consider acquiring Target 3.
and what forms of travel are taking precedence. Insights on customer behaviour
and preferences would help make a final recommendation.
Excellent. That will be all. Thank you.
Excellent point. Recent trends have revealed that air travel has been on the rise in
Asia, as more people enter higher income groups. Trends also suggest that
passenger traffic is the highest between a select few destinations in Asia – India
and China particularly. Efficient low cost air travel is expected to grow at 13%
CAGR.

Noted. This significantly changes the dynamics of our proposal. The client is already
a major airline operator in the US and Europe with flights connecting major tourist
destinations in Asia to both these continents. While Target 1 seems to be a good
acquisition based on overlap of operating models and cost synergies, it would
appear that acquiring Target 3 would provide the client with flexible operating
options, help cater to a large and rapidly growing market. Target 3’s operations
also complement the client’s routes and help develop a more exhaustive network of
operations, without any redundancies. The lean operating model would offer
several advantages that the client may carry back to their operations in US and
Europe. With marginally different revenue contributions, the focus shifts to the cost
of acquisition. Acquiring a new airline operator with a lean operations would
seemingly cost less than acquiring an established airline with massive assets. The
client can also maintain a lean workforce that overlooks operations of the acquired
company, providing the client with greater managerial control. With this segment of
travel up and coming, the client can also expect to grow the business rapidly with
investments out of US and Europe.

That’s very good. So, what is your final recommendation?

© Management Development Institute, Gurgaon | 2024- 2025 87

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Mergers & Acquisitions 1: Summary

Prompt: Your Client is a major airline operator and has been doing well financially in the recent past. The management is looking at potential M&A activities
to grow the company’s business. You’ve been on-boarded as a consultant and they client wants you to advice them on their M&A plans.

Case Facts Interviewee Feedback Approach

▪ About the client: Airline What Went Well?

operator that offers both
▪ Assuming that it’s a revenue Sell Deal
passenger and cargo services
growth strategy since the
▪ Market Presence: US client is doing financially well
(60%), Europe (30%) and
▪ Breaking down the pros and
Asia-pacific (10%) market Post
cons for the targets logically Transaction
▪ Focus: Revenue growth Transaction
Common mistakes
▪ Target: Potential Targets in
▪ Starting the analysis by
Asia: Established Airline
saying Target 1 & 3 look good Need Target Due Deal
operator, Emerging Airline
– use analysis first approach Analysis Screening Diligence Execution
Operator, Disruptive Airline
▪ Negate targets only if you
▪ Similar revenue synergies
have a consensus on 2-3
and operational synergies are
pointers that it may not be a
better with Target 1 but Operational
good fit Offerings Companies Synergies
Target 3 has a leaner Practices
operating model
▪ Increase in low cost air travel
will lead to passenger traffic
in India and China Operations Market Position

Recommendations

Conclusion: Airline operator looking for inorganic growth, focusing on

revenue, with multiple targets in mind.
Uninvolved Branches
Short Term Recommendation
▪ Focus on the Cost of acquisition Note: Ideally in a Due Diligence cases, almost all relevant factors are involved and need to be studied. Try to
▪ The client should primarily focus on the Asia market consider all options.
▪ Target 3 would give the best possible scenario for the acquisition
Long Term Recommendation
▪ Can look at other options once in a better growth stage

© Management Development Institute, Gurgaon | 2024- 2025 88

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Merger & Acquisition Case 2: Brand Integration

Industry Manufacturing

Level Intermediate

Prompt: Your Client, say X, is a high-end manufacturer of leather-based luxury goods. They are unable to keep up the with demand for alligator-skin products – handbags,
belts, and wallets. Besides the shortage, the price of alligator-skin has gone up by 70% in the past nine months, squeezing otherwise fat margins. The client is considering
buying company A, one that sources, tans, and processes alligator leather. What are your considerations while deciding on a go/no-go strategy?

First I would like to establish a deal rationale and validate it before proceeding In this particular case, I feel external factors – operating conditions, animal
further. Acquiring company A would guarantee an uninterrupted supply of alligator- treatment, ethical considerations, and regulations would be critical. It is important
skin based leather, it would help restore margins by cutting costs and establishing that the client thoroughly analyses these considerations and map out any risks
operational synergies, and finally it would enable the client to pre-empt competition associated with it that might hamstring the acquisition.
and diversify holdings. Anything that I am missing here?
Very valid points. The target company has well established operating practices that
No. That’s excellent. Please proceed. adhere to all regulations and guidelines. So, these considerations, while extremely
valid are not potential risks. What else would you look at?
Sure. I’d like to break down the analysis into the following buckets – the client
(company X), the target (company A), the luxury leather industry, acquisition costs I would like to understand how the market for animal skin based luxury products is
and risks, and finally an exit strategy. As we are clear about the client and the evolving. With a focus on sustainability and emergence of better materials, the
current situation, I would like to start with the target – company A. I would like to market might not have great potential in the long run. So, it would be important to
understand the target’s revenues and profits over the past 3 years, who its establish that the client actually sees growth potential in the market and can
suppliers and customers are, and what are it’s operating margins and capabilities. capitalize on it. Do we know the current size of the market, the profit margins, and
expected rate of growth/contraction? I would also like to understand the expected
Alright. Company A has seen a 15% growth in its revenues each year over the past competitive response a little and how best we can tackle it.
3 years. Margins have also seen a steady growth with the current number sitting at
nearly 40%. The company primarily sells to the client’s competitors. The target also Okay. The global leather goods market is valued at US $430 Billion. This is
has strong supplier relationships, and enjoys a good position in the market. expected to grow at a CAGR of 4%. Fashion contributes to nearly 60% of all
products. Some new applications in design and decoration have come up, and these
That’s great. The target company seems to be in an excellent position both are expected to add to the growth.
financially and operationally. Besides developing a steady flow of raw materials, the
client will also enjoy ancillary revenues by selling alligator-skin. A significant Okay. That’s a good sign. So, even from the market perspective, there’s enough
competitive advantage can be developed by cutting off supplies to competitors potential for the client to pursue this opportunity. I would finally like to look at the
based on a cost benefit analysis. Besides, I am also assuming sale of by-products financial viability of the acquisition. The cost of the acquisition, the financial
would help augment revenues for the client. alternatives, the client’s capability to fund it, and the nature of the transaction.

Yes, that’s good. What next? Good. That’s an exhaustive analysis. Let’s stop here. Well done.

© Management Development Institute, Gurgaon | 2024- 2025 89

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Mergers & Acquisitions 2: Summary

Prompt: Your Client, say X, is a high-end manufacturer of leather-based luxury goods. They are unable to keep up the with demand for alligator-skin
products – handbags, belts, and wallets. Besides the shortage, the price of alligator-skin has gone up by 70% in the past nine months, squeezing otherwise
fat margins. The client is considering buying company A, one that sources, tans, and processes alligator leather.
Case Facts Interviewee Feedback Approach

▪ About the client: What Went Well?

Manufacturer of high end
▪ Quick rundown on the Sell Deal
luxury leather goods who are
understanding of the need
unable to keep up with the
demand of alligator skin ▪ Also understanding any
products external factors
Post
▪ Target: Company that Common mistakes Transaction
Transaction
sources, tans, and processes
alligator leather and supplies ▪ Candidate could have asked
to its competitors more probing preliminary
questions Need Target Due Deal
▪ Target has a annual CAGR of Analysis Screening Diligence Execution
15% in its revenue over the ▪ Target analysis should also
past 3 years. Margin at 40% consider USPs

▪ Global leather market is ▪ Synergy consideration are

valued at $ 430 billion and is important
Background Background Operations
expected to grow at a CAGR
of 4%

Client Focus Financials

Recommendations

Conclusion: Acquisition driven by a needs analysis followed by a due

diligence on the client
Uninvolved Branches
Short Term Recommendation
▪ Acquisition can help gain competitive advantage Note: Ideally in a Due Diligence cases, almost all relevant factors are involved and need to be studied. Try to
Long Term Recommendation consider all options.
▪ The financial viability of the acquisition needs to be looked carefully
including client’s funding ability and the alternatives

© Management Development Institute, Gurgaon | 2024- 2025 90

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Merger & Acquisition Case 3: Buy-side DD

Industry Manufacturing

Level Intermediate

Prompt: Your Client is a large PE firm, based out of India. It focuses on firms in the home utility and consumer durables’ space. The client has identified a company (referred
to as the Target) in the second-hand furniture space (C2B and B2B), that it wants to invest in. They want us to conduct a due diligence study of the furniture re-commerce
market and the target capabilities. How would you approach this engagement? What would your considerations be?

Sure. So, to clarify the objective, the idea is to develop a structure for the due Since we are looking at how many second hand furniture pieces are exchanged
diligence activity – covering both the furniture re-commerce space and the Target. (bought/sold), I’d like to look at the number of furniture pieces shipped on an
Is that right? Are we also expected to come up with recommendations on the annual basis. From this total number, I would look at the number of new and
investment strategy? second hand furniture pieces that are shipped. Finally, I would like to look at the
number of second hand furniture pieces exchanged through organized C2B
Yes, that’s right. No, recommendations are not needed. I only need you to
platforms (such as the Target and its competitors).
structure the due diligence activity.
Total Furniture Userbase = 450 M
Sure, understood. I’d like to breakdown the analysis into 3 sections – The Furniture Average Furniture Replacement Cycle = 3 Years
Re-commerce Market, The Target, Client (PE) Capabilities and Synergies. Number of New Furniture Sold/Shipped Annually = 450/3 = 150M
Number of Second-hand Furniture Transactions = 250 – 150 = 100M
Let’s shelve the client analysis for now. Focus on the market and target analysis. Number of Second-hand Furniture Shipped Commercially = 0.3*100 = 30M
Number of P2P Second-hand Furniture Shipments = 0.9*30 = 27M
Okay. I’d like to start with the market. There are 2 aspects that I want to look at as Organized Exchange of Second-hand Furniture = 30 – 27 = 3M (FY ‘21)
a part of the market analysis. a) I want to do a sizing activity to gauge the second So the current market size for organized second hand furniture market is about 3M
hand furniture market size in India; b) Next, I’d like to look at the growth drivers of units annually. Do you want me to project these numbers for a 5 year period
this market to understand how the market will grow over the next 4-5 years assuming 10% CAGR on the top line?
(typical investment period for a PE firm)
Good! The market size estimation is indeed accurate. Well done. No, we can leave
Okay. That’s a good start. Go ahead. I have some data points to help you get the projections be for now. Let’s move ahead. What do you think would be the
started. All datapoints are for FY 21. You can assume a 10% CAGR on the top-line. growth drivers for this market? Would you expect the market to grow or shrink?
Total Furniture Userbase in India ~ 450 M
Total Annual Furniture Shipments ~ 250 M Major macroeconomic factors indicate that real estate and home furnishing
Average Furniture Replacement Cycle ~ 3 Years businesses in India will continue to be on the rise over the years to come. Growing
GDP, higher per capita income, the growing demand for smart homes, IoT enabled
% of Furniture Exchanged Commercially ~ 30 (Buy Back/Exchange/Re-sale)
furnishings, and rural adoption of basic furniture point towards a strong growth
% of Second-hand Furniture Exchanged in P2P Mode ~ 90 potential. New business models such as organized P2P renting, refurbishing, and
customization will drive business in the Target’s niche. As customers also realize
Okay, thank you. Let me take a minute to understand the data.
the monetary potential of used furniture, the market is likely to boom and
Sure, take some time and let me know how you would go about it. prospects look good over the next 5 years.

© Management Development Institute, Gurgaon | 2024- 2025 91

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Merger & Acquisition Case 3: Buy-side DD

Industry Manufacturing

Level Intermediate

Alright. That’s a fair justification. Let’s move on to the analysis of the Target. What Makes sense. Good. To bring this to a logical closure, can you list down the top 4
are your considerations? exit options that you think would be plausible for the client.
In looking at the Target, I would first want to understand the core business Sure. The most likely exit options for the client involve the buy-out of the client’s
proposition – what is it that the business does? Does it operate in a niche market stake by larger entities.
or is it a general proposition? If need be I would also look at riper international
markets to understand how they have evolved, how the players have consolidated a) Client stake buy-out by a larger global PE firm
themselves and get a sense of where the Indian market may be headed. b) Client stake buy-out through the Target’s acquisition by an Indian ecommerce
That sounds good. So, the target primarily has capabilities in furniture repair and giant or a large furniture manufacturer/assembler
refurbishment and they sell primarily to businesses (OMs and Retailers). They c) Client stake buy-out through the Target’s acquisition by a larger global firm in
source used furniture sets from users, undertake refurbishment activities and the furniture re-commerce space
further sell these units. In terms of volume, the Target is the 3rd largest player in
the market and handles about 23% of all second hand furniture exchanged. d) Client stake buy-out through an IPO for the Target
Additionally, it’s also possible that strategic partnerships are formed with niche
I want to start with a competitive benchmarking exercise, to understand and map industries such as IoT, Home Automation, Insurance and Technology Services. The
competitor and Target capabilities and USPs. This would help identify approximately exit in these situations would have to be looked at on a case by case basis.
what portion of the growth pie the Target can internalize. Creating this market map
would also help identify market niches and extend the Target’s business portfolio. Alright. That’s a very good analysis. We can stop at this point. Well done. Thank
you.
A thorough competitive benchmarking is indeed the next logical step that we’d
adopt. Good! Let’s move on. You spoke about wanting to look at international
markets. Why would you do that? And if you had to pick one market that’s closely
related to the Indian marketplace, which would it be? And why?

The Indian market for consumer durable re-commerce is still nascent and studying
a mature international market would help us understand how a transformation
might occur and serve as a base for identifying the common challenges. From a PE
perspective as well, it would help the client understand what they can expect over
their investment period and how they can plan for suitable exit options.
In terms of market relevance, I would say China is closely related to the Indian
market. The market size, structure, buying patterns, and consumer mindsets of the
two countries are largely similar. Further, India’s start-up revolution has been
largely inspired by the Chinese market and that is good reason to believe that any
transformation in India is likely to be inspired by the Chinese market.

© Management Development Institute, Gurgaon | 2024- 2025 92

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Mergers & Acquisitions 3: Summary

Prompt: Your Client is a large PE firm, based out of India. It focuses on firms in the home utility and consumer durables’ space. The client has identified a
company (referred to as the Target) in the second-hand furniture space (C2B and B2B), that it wants to invest in. They want us to conduct a due diligence
study of the furniture re-commerce market and the target capabilities
Case Facts Interviewee Feedback Approach

▪ About the client: Large PE What Went Well?

firm that deals in home
▪ Quick and thorough Sell Deal
utilities and wants a due
guesstimate to cover the
diligence study to invest in a
market sizing activity
second hand furniture space
Post
▪ Covering the need for Transaction
▪ Target: 3rd largest player in Transaction
competitive benchmarking
the market, handles ~ 23%
of all second hand furniture ▪ Using macroeconomic factors
exchanged to justify good growth for the Target
Need Analysis Due Diligence Deal Execution Integration Exit Strategies
Screening
Industry
▪ Target has Capabilities in
furniture repair and Common mistakes
refurbishment and they sell Market Business
Missing out on ‘second hand’ Synergies Larger PE Firm
primarily to businesses ▪ Analysis Model
part in the guesstimate
▪ Market involves ‘second hand’
furniture ▪ Could have asked about the Target's
USP of the client in the Market Size
Acquisition
preliminary questions stage

Growth
IPO
Drivers

Recommendations Niche
Industries
Conclusion: Considerations of the Buy side DD involve market
estimation, growth factors, Company analysis & Competitors
Uninvolved Branches
Short Term Recommendation
▪ Competitive benchmarking to better understand the competition in Note: Ideally in a Due Diligence cases, almost all relevant factors are involved and need to be studied. Try to
the market consider all options.
Long Term Recommendation
▪ The niche industries need to be studied one by one to understand the
possible exit scenarios

© Management Development Institute, Gurgaon | 2024- 2025 93

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Merger & Acquisition Case 4: Sell-Side DD

Industry IT

Level Intermediate

Prompt: Your Client is a large IT firm, based out of India. It is a global leader in the IT Services industry. The client has identified a particular arm of the business in a
specific geographic location they want to sell. They want us to conduct a due diligence study. How would you approach this and what would your considerations be?

I would like to start by clarifying the objective- the client is a market leader in the Now that I have a clear idea of the client’s reasoning behind selling and its
IT services industry with a global presence. They are currently looking at selling off capabilities I would like to understand the sell options the client has.
a strategic business unit in a specific geographical location and would want our end
of the due diligence. The client has multiple firms bidding on various percentages of majority stake
ownership and the client needs to decide the best of option to sell.
Yes, that’s right. No, recommendations are not needed. I only need you to tell
me about the due diligence activity. Considering that the units have been profitable before the new regulations, the
Sure, understood. I’d like to breakdown the analysis into 3 sections – Internal client should look at the market economics and growth potential to understand
Analysis, Sell Options, Deal Execution and Implementation. what percentage of minority ownership they would like to retain.
Outside ownership stake the client needs to consider the capabilities and assets it
Let’s start by understanding the client. owned and what would provide best deal value.
Sure. I’d like to start with the internal analysis. I would like to understand what is We should further look to analyse the technology structure of our bidders to
the issue that is causing the client to sell of a business unit – is it based on external understand where we could have the easiest handover and reduce transfer cost.
or internal factors?

So the client is looking to sell of their South American business unit. While the unit After deciding on selling a majority stake while still holding 49% of the unit what
had been extremely profitable, recent government regulations have made would be the next step towards completing the sell off?
outsourcing of contracts extremely difficult leading to new business deals drying
We would next come to our deal execution and implementation considerations.
up. Local employment policies have also prevented the company from having
foreign staff working dominating on shore offices. We need to bucket our business critical applications(ERP, CRM, Client Databases)
and non critical applications(internal accounting systems) separately to decide what
So I understand the major concerns are operational concerns in staffing and the needs to kept and what will be transferred.
lack of new business due to new regulations. Can I understand the client’s assets
and capabilities in the region? We then need to consider the needs of the acquirer and what they require in
maximizing their business benefit. Finally the staffing and organisation
The client owns multiple offices in countries like Brazil, Chile, Argentina. The client restructuring needs to be implemented. Emphasis needs to be on ensuring
employs about 20,000 employees and owns equipment to provide infrastructure in transparency for all stakeholders.
serving various IT related business deals which can be utilised very easily in any
kind of takeover. Thank you I think we can close our discussion.

© Management Development Institute, Gurgaon | 2024- 2025 94

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Mergers & Acquisitions 4: Summary

Prompt: Your Client is a large IT firm, based out of India. It is a global leader in the IT Services industry. The client has identified a particular arm of the
business in a specific geographic location they want to sell. They want us to conduct a due diligence study. How would you approach this and what would
your considerations be?
Case Facts Interviewee Feedback Approach

▪ About the client: Client is a What Went Well?

market leader in the IT
▪ Interviewee understood that Sell Deal
services industry with a
reasons to sell needs to be
global presence
understood
▪ Geography: South America
▪ Understanding the assets &
Post
▪ Problem: Recent govt. capabilities of the company in Transaction
Transaction
regulations have made the affected geography
winning deals and staffing
Common mistakes
offices extremely difficult
▪ Could have asked more
▪ Current Hand: Multiple bids Need Analysis Sell Options Deal Execution Implementation
preliminary questions to
offered with varying stake sell
understand the case better
options. Client chooses to
retain 49% in the deal ▪ Interviewee could have
divided the case first into Pre- Market
sell & Post sell Internal External Deal Value
Economics

Government
Local Policies
regulations

Recommendations

Conclusion: Considerations of the sell side DD should include reasons,

assets and information on the buyer
Uninvolved Branches
Short Term Recommendation
▪ Streamline integration and handover to optimize continuation of Note: Ideally in a Due Diligence cases, almost all relevant factors are involved and need to be studied. Try to
current commitments consider all options.
Long Term Recommendation
▪ Ensure maximum transparency for shareholders and consider
requirements of acquirer

© Management Development Institute, Gurgaon | 2024- 2025 95

H Frameworks and Cases

Merger & Acquisition Case 5: Alliance formation

Industry IT

Level Intermediate

Prompt: Our client, GlobexCRM, is a CRM SaaS provider operating in more than 50 countries. They're considering an alliance with ProcureTech, a Procurement SaaS
provider. GlobexCRM has a strong presence in North America but is looking to expand its influence in the Asian and European markets.

To start, I would like to know more about the alliance. What is the objective for the The European market is highly regulated, and the Asian market is extremely
alliance with ProcureTech? competitive, with local players dominating.

Their annual revenue growth for GlobexCRM in these regions is around 8%, but So, These conditions imply that the alliance needs to be strategic about entry
they aim to double that. They believe an alliance with ProcureTech could be the points. In Europe, compliance with regulations like GDPR will be crucial, and in
key. ProcureTech’s annual revenue is $200 million, with a solid customer base Asia, a localization strategy to compete with domestic players is necessary. A go-
but limited growth capacity. to-market strategy could involve leveraging ProcureTech's existing relationships
and adapting their solutions to meet local needs.
Thank you. Starting with the deal rationale, forming an alliance seems to be a
strategic move for GlobexCRM to leverage ProcureTech’s existing market
And do you think there are any risks associated with the integration?
penetration in Asia and Europe. With an 8% growth rate, an alliance could
accelerate GlobexCRM's expansion and potentially increase market share, aiming
for that 16% growth target. Integration risks are a significant concern, especially when it comes to aligning
different company cultures and systems. GlobexCRM should perform a thorough
Indeed. They've also seen a synergy potential of up to $30 million in cross-sales cultural assessment and systems compatibility check. A risk mitigation strategy
and cost savings. How should they structure this alliance? might include setting up cross-company integration teams and investing in change
management programs.
With that level of synergy, a joint venture could be the most beneficial structure.
This would allow both companies to share resources and risks equitably. Let's say
they aim for a 50-50 investment in the venture, which would mean a significant Excellent analysis. Anything else you want to add to the analysis?
commitment from both sides but also shared governance.

Good. Also, They've had a stable 5% EBITDA margin for the past three years. How Yes, Due diligence should be comprehensive, covering financial audits, customer
does that factor into the decision? satisfaction analysis, and a detailed technology assessment. Given the synergy
A 5% EBITDA margin is modest. It suggests ProcureTech has been managing its potential, a valuation exercise to quantify the economic impact of the alliance
earnings prudently, albeit without much aggressive investment for growth. would be prudent. This would involve not just financial metrics but also strategic fit
GlobexCRM could offer the necessary capital influx to innovate and scale and potential market gains.
ProcureTech’s operations. Given ProcureTech’s $200 million revenue, the alliance
could use this stable financial base to fund growth initiatives. Can you guide me Thank you I think we can close our discussion.
more about the market conditions?
© Management Development Institute, Gurgaon | 2024- 2025 96
H Frameworks and Cases

Mergers & Acquisitions 5: Summary

Prompt: Our client, GlobexCRM, is a CRM SaaS provider operating in more than 50 countries. They're considering an alliance with ProcureTech, a
Procurement SaaS provider. GlobexCRM has a strong presence in North America but is looking to expand its influence in the Asian and European markets.

Case Facts Interviewee Feedback Approach

• About the client: Market What Went Well?

leader in the CRM SaaS • Understood the strategic
Sell Deal
industry with a global rationale behind the alliance.
presence. Strong presence in
North America. • Identified potential synergies
and cost savings.
• Geography: Focus on Asian Post
Transaction
and European markets. Transaction
• Recognized the importance of
aligning company cultures
• Problem: Seeking to double and systems.
the 8% annual revenue
Common mistakes Need Analysis Sell Options Deal Execution Implementation
growth in these regions.
• Could have explored more
Alliance with ProcureTech for
about ProcureTech's
market penetration.
financials and market
conditions. Market
• Current Hand: ProcureTech’s Internal External Deal Value
annual revenue: $200 million. Economics
• Missed discussing the
Synergy potential: Up to $30
detailed due diligence
million in cross-sales and cost
process.
savings. Aim for 16% growth
Government
rate through the alliance. Local Policies
regulations

Recommendations

Conclusion: The alliance with ProcureTech should include thorough due

diligence, financial audits, customer satisfaction analysis, and a detailed
Uninvolved Branches
technology assessment.
Short Term Recommendation Note: Almost all relevant factors are involved in this case, thus no branches are left uninvolved.
• Establish a joint venture with a 50-50 investment.
• Focus on aligning company cultures and systems.
• Implement a risk mitigation strategy.
Long Term Recommendation
• Leverage ProcureTech’s market presence and adapt solutions to meet
local needs.
© Management Development Institute, Gurgaon | 2024- 2025 97
H Frameworks and Cases

Merger & Acquisition Case 6: Jewellery acquisition

Industry Jewellry

Level Intermediate

Prompt: Your client, Aabhushan, a well-known Indian jewellery brand specializing in traditional Indian jewellery. They have recently acquired another established jewellery
brand and are now seeking advice on post-deal services, specifically on identifying and realizing possible synergies.

To start, I would like to know more about the revenue of both the brands in their There's also the issue of brand positioning. Aabhushan is positioned as a premium
respective markets. brand, whereas the acquired brand has a value-for-money proposition. How should
they approach this?
Aabhushan's annual revenue is $50 million, and the acquired brand has a
revenue of $20 million. Both brands have a strong presence in their respective Brand differentiation is crucial. Aabhushan should maintain the acquired brand's
markets. identity to cater to a broader market segment. They can position the new product
lines as 'Aabhushan's Exclusive Collection' under the acquired brand, aiming to
Thank you for the context. Do we have any information about their operational attract price-sensitive customers to higher-value offerings.
characteristics?
Okay do you want to add anything futher?
Aabhushan has a strong online presence, while the acquired brand has an
extensive network of brick-and-mortar stores, especially in Tier-2 and Tier-3 cities. Yes, we should also look at the cultural integration. Given the heritage and values
associated with traditional Indian jewellery, preserving the cultural ethos of both
By leveraging Aabhushan's e-commerce model, we could potentially increase the
brands will be essential. A unified corporate culture that respects the legacy and
acquired brand's sales in the next fiscal year.
craftsmanship of both entities will be key to a smooth transition.
That's a good start. With the acquisition, Aabhushan also inherits a skilled artisan
base from the acquired brand, known for their craftsmanship in diamond jewellery Considering potential risks, what would you say are the major ones to address?
which Aabhushan lacked. How can we capitalize on this?
This presents a fantastic opportunity for product expansion. Aabhushan can The primary risk is the cannibalization of sales. Careful market segmentation and
introduce a new line of diamond jewellery, combining their design expertise with targeted marketing strategies will be needed to prevent this. Additionally, there's
the newly acquired craftsmanship skills. We could see a decent increase in their the challenge of integrating two distinct company cultures and customer bases
high-margin product sales. without diluting brand equity.

The acquired brand has a different operating model, focusing on wholesale, while Finally, what would be your recommendation for the first steps post-deal?
Aabhushan is largely retail-oriented.
The first step should be a joint workshop with leaders from both brands to align on
This calls for a hybrid operating model. Aabhushan could adopt a 'best of both vision and strategy. Then, we should conduct a market analysis to understand
worlds' approach, utilizing the acquired brand's wholesale network to distribute cross-selling and upselling opportunities. Lastly, a task force dedicated to
Aabhushan's products, thereby expanding reach and improving inventory turnover. integration should be established to oversee the synergy realization process.
I'd estimate some cost synergy from supply chain optimization.

© Management Development Institute, Gurgaon | 2024- 2025 98

H Frameworks and Cases

Mergers & Acquisitions 6: Summary

Prompt: Your client, Aabhushan, a well-known Indian jewellery brand specializing in traditional Indian jewellery, has recently acquired another established
jewellery brand and is now seeking advice on post-deal services, specifically on identifying and realizing possible synergies.

Case Facts Interviewee Feedback Approach

• About the client: What Went Well?

Aabhushan: Annual revenue • Identified the operational
of $50 million. Acquired characteristics and potential
brand: Annual revenue of $20 for e-commerce leverage. Sell Deal
million.
• Recognized the opportunity
• Geography: Strong online for product expansion using
presence for Aabhushan; acquired craftsmanship.
Post
extensive network of brick- Transaction Sell Options
Transaction
and-mortar stores in Tier-2 • Understood the importance of
and Tier-3 cities for the brand positioning and cultural
acquired brand. integration.
Common mistakes Market
• Problem: Integration and Need Analysis Deal Execution Integration Monitoring
Economics
• Could have explored more
realization of synergies post-
about operational efficiencies.
acquisition.
• Missed discussing detailed
• Current Hand: Potential for Internal External Deal Value
risk mitigation strategies. Implementation
leveraging e-commerce to
increase sales. Opportunity
for expansion through
inherited skilled artisan base.

Recommendations

Conclusion: The acquisition presents significant opportunities for

synergy realization through e-commerce leverage, cultural integration.
Uninvolved Branches
Short Term Recommendation
• Conduct a joint workshop with leaders from both brands to align on Note: Almost all relevant factors are involved in this case, thus no branches are left uninvolved.
vision and strategy.
• Perform a market analysis to understand cross-selling/upselling
opportunities.
Long Term Recommendation
• Leverage the acquired brand’s wholesale network to improve
inventory turnover and broaden market reach.
© Management Development Institute, Gurgaon | 2024- 2025 99
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Framework

Framework
Extension of Market Entry where in you developing an analysis and implementation plan for introducing product lines in new markets. Brings together the
market entry framework, the pricing framework, and conceptual business considerations.

New Product Launch

Market Entry Analysis

Similar to mapping in
Financial Planning Operational Planning Pricing Decisions Marketing & Comm. market entry, there will be
some overlaps

❑ Inbound: Production/Ship/Import ❑ Elasticity ❑ Marketing Strategies

Key Considerations
❑ Inventory Management ❑ Positioning ❑ Advertising
❑ Outbound : Channels, Margins ❑ USP ❑ Promotion & Sales
❑ Unit costs ❑ Service Initiatives

High Level Analysis

❑ Reiterate the problem to have a clear understanding of the case.

❑ Start off with a market entry framework to understand whether the product can be launched or not
❑ Use the NPL framework post the ME decision to go ahead with
❑ Focus more on the product and target audience. Segregation can be done using geography, income levels, demography etc
❑ For the product – use features, SKUs & Packaging features

© Management Development Institute, Gurgaon | 2024- 2025 100

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 1: Nicotine Gums

Industry Manufacturing

Level Beginner

Prompt: Your Client is a manufacturer of Nicotine Gums. They have been successful in the US market and are now considering entering the Indian market. They want you to
suggest if and how they can enter the market and also determine an appropriate price point of the product. How would you go about it?

Sure! I would like to breakdown the analysis into two sections. First, I’d want to Do you think smokers of hand rolled cigars and premium cigarette brands would be
understand if entering the Indian market is a feasible option, and if so how. willing to switch to Nicotine Gums? Assume that the 120 Million people are equally
Second, I’d like to look at how the product can be launched, and then address the distributed among 3 income classes. Can you arrive at the number of potential
financial, operational, marketing, and pricing considerations in that order. customers for this product?
That’s a sound approach. Please proceed.

I’d like to understand a little about the company and the product itself. What Right. The product should indeed be targeted at the lower and mid sections of the
differentiates the product? Are there any characteristic features for these gums? smokers’ pyramid, where smoking is an addiction, and people might be willing to
Does the client manufacture the product inhouse? quit. With the upper sections, it could be a pleasure and status symbol. They may
never consider switching to Nicotine Gums.
Yes, the company owns the patented formula for the gum, and has a fully Assuming 40 Million smokers each in the mid and low income segments, at 20%
integrated manufacturing setup. The product has the lowest nicotine content quit potential, and 80% & 30% affordability respectively, we have a TAM of 9
among competitors and clinical trials have proven that it is able to hold off cravings Million people. With high product performance and efficacy, we should expect to
for longer than other products. The client has strong financials as well and can achieve 60% penetration in one year. That will give us ~5.5 Million users. A 10%
invest as needed. CAGR can be expected in the near future, and that gives us a sizable market.
Okay. So, we have a highly differentiated product and strong financial and
operational capabilities. That’s a very good sign. I would now like to look at the Okay. That’s a fair analysis. Convinced by the size and potential, the client has
Indian market and estimate the potential user base for such a product. Can I decided to enter the Indian market. You are required to suggest an operational
proceed with a numerical analysis for this? I’d also like to understand our profit strategy and also help the client identify the right price point for the product.
margins to decide on a price point.

The product has high profit margins in the US. It is a premium gum, and earns I would like to look at the price points first. Assuming that the median cost of a
nearly double what it costs. The focus for the client is on entering the Indian cigarette is ₹10, and on average people smoke 4 cigarettes a day, monthly
market and capturing the right user base. Profitability is of primary importance to spending comes out to ₹1,200. Given the higher efficacy of the product, an average
the client. For the analysis, start with 120 Million smokers in India. smoker would chew 2.5 gums per day. Monthly consumption would be 75 gums.
Assuming that gums are sold in packs of 25 each, each pack can be priced at ₹350.
Noted. Since the product is a premium one, we should try and target the mid to (1200/(75/25) + 50*). *Premium for the health benefits over cigarettes.
higher end of the smokers’ pyramid. That would allow us greater price flexibility.

© Management Development Institute, Gurgaon | 2024- 2025 101

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 1: Nicotine Gums

Industry Manufacturing

Level Beginner

That’s a good analysis. Can you quickly go over the client’s strategies from an To mitigate these risks, the client will have to seek strong protection of its IP and
operational and marketing perspective? lobby with the state to bring in stringent regulations. This might eventually be the
most critical aspect differentiating a go/no-go strategy.
Sure. The client can either consider setting up a manufacturing unit in India, or
The client will have to focus on a brand first marketing strategy, and create a
choose to import the products from it’s manufacturing plants in the US. Since the
unique proposition for its product, effectively differentiating itself from competition.
product has the potential to grow rapidly and entails repeat purchases, it may be
more efficient to setup an integrated manufacturing unit in India. That’s right. We can stop here. Well done!

Okay. That’s reasonable. What would your recommendations be for promoting and
selling the product?

The two most prominent challenges for the client are –

a) Creating an effective and consistent communication strategy that clearly
articulates the product capabilities and develops a compelling narrative for
usage
b) Developing a robust salesforce and employing an omnichannel distribution
strategy to ensure that the product is available at every location where it may
be potentially demanded.
With restrictions on direct advertising, subtle product placement and promotion will
be critical. The client has to focus on developing distribution channels that cater
both to the organized and unorganized retailer segments. Joint promotions can be
explored to improve brand awareness and perception.

Yes, that is a good analysis. Do you see any risks for the client in entering the
Indian market? If so, how do you suggest they be tackled?

From a product perspective, the client runs the risk of loosing out on its advantage
of holding the unique formulation, as reverse engineering and development of
alternatives can happen rather quickly, given India’s poor protection of IP. With a
number of low cost alternatives readily available, successful differentiation will be
critical for market success. Without a distinctive brand preference, the client risks
speeding the commoditization of the market.

© Management Development Institute, Gurgaon | 2024- 2025 102

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 1: Summary

Prompt: Your Client is a manufacturer of Nicotine Gums. They have been successful in the US market and are now considering entering the Indian market.
They want you to suggest if and how they can enter the market and also determine an appropriate price point of the product. How would you go about it?

Case Facts Interviewee Feedback Approach

▪ Product differentiator What Went Well?

Market Entry analysis
Patented formula for gum and ▪ Clear thought structure
Lowest nicotine content throughout the discussion
with to the point questions
▪ Category
Premium with 100% Profit ▪ Calculation of Target market
Go No Go1
Margin size was done properly
▪ Target Audience ▪ Ability to think of additional
risks that could be involved
Low and middle tier of
smoking pyramid Common mistakes Marketing &
Pricing planning Operational planning Financial planning2
Communication
▪ Most effective product among ▪ Targeting the mid to higher
competitor brands end of the smokers’ pyramid
as the product is a premium Pack of gums ₹350 Set-up Integrated Omnichannel distribution
▪ Strong financial and Premium pricing Manufacturing Unit Consistent Communication
one
operational capabilities of in India
company
▪ Fully integrated manufacturing
setup

Recommendations Uninvolved Branches

Conclusion: Total addressable market for nicotine gum is 5.5M with a 1. Based on the discussion and opportunity in India, product should be launched
10% expected CAGR indicating that the product should be launched in 2. The client has strong financials as well can invest as needed so ignoring the financial planning branch
India.
Short Term Recommendation Target Market Size Calculation
▪ Omnichannel promotion and marketing should be included to ensure
clear and consistent messaging across different consumer groups Potential TAM (60%
Group Smoker Quit potential Affordability
Long Term Recommendation customers penetration)
▪ Client must seek strong protection of its IP and lobby with the state Mid income 40M 20% 80%
to bring in stringent regulations to ensure that their investment reaps 9M 5.5M
the maximum rewards Low income 40M 20% 30%

© Management Development Institute, Gurgaon | 2024- 2025 103

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 2: EV Manufacturer

Industry Automotive

Level Beginner

Prompt: Your Client is the largest global manufacturer of EVs. The firm invests heavily in R&D and its advanced battery technology has enabled it to penetrate the mid and
upper strata of the US automobile (car) industry. The firm sees opportunity to enter the Asian markets – particularly India. They want to understand what the strategy
should be to enter this market. Assume that the decision to enter has been made. What would your product strategy look like?

Sure. I’d like to clarify the objectives before I begin. The idea is to develop a The client will set up production & assembly capabilities in India, source
strategy for the client to enter the Indian market. Is that right? components from suppliers to it’s US facilities, assemble and sell cars locally.

Yes. But, I’d like you to focus on the product strategy and the company for now. Understood. What are the costs involved in this process? Both fixed and variable?
Let’s assume that the market, regulation and all such external factors are You also mentioned that the client is looking at fat margins in India. What are the
favourable. The client is looking at fat margins in India. profit margins that the client expects?

Understood. I’d like to structure my analysis in 2 segments. First, I’d like to start The one time fixed costs are expected to be US $2 Billion, and variable production
off with the client – the current financial position, top and bottom lines, operational costs are about 70%, 75%, and 70% of the selling price for the affordable, mid-
capabilities and organizational flexibility. This would help gauge the client’s ability commercial and luxury models. The client is looking at 30-35% ROI on it’s fixed
in entering new markets, to sustain and drive growth. Next, I’d like to look at the investment in the near future.
client’s product portfolio, the market segments they serve and their suitability for
the price sensitive Indian market. This analysis would help gauge the fit of the This helps. I would like to look at the price points of each model and analyse if the
current product mix to the Indian market, and make decisions pertaining to new client’s options are comparable with regular fuel-based cars at the same price.
product development. Luxury Variant: It costs at nearly INR 1.5 Crore, and is likely to be a comparable
option with other luxury cars at that price point. High end, environmentally
That’s a good start. You can assume that organizational capabilities are high and sensitive customers are likely to pay for this model as it is likely to match regular
the as-is operational and financial outlook is positive. From the product portfolio cars in terms of features and drive capabilities.
perspective, the client has 3 best selling models – one each at 3 different price Mid-commercial Variant: It costs nearly INR 70 Lac and seems to be a model for
points, serving the luxury, mid-commercial, and affordable segments. nothing in the Indian market. The features, brand perception and value from a
Do we have information on the price points for these models and on the suitability regular car at this price point are definitely much better than what the client has to
of these models to the Indian market – both from the customer perspective and offer. So, this model may not be a viable option in the Indian market.
capabilities for Indian conditions – roads, driving patterns, and performance? Affordable Variant: It costs nearly INR 30 Lac and has a similar limitation as the
mid-commercial model. At this cost, the middle class Indian expects the car to be
Yes. The price points for these models are $200,000, $90,000 and $40,000 feature rich and have unique capabilities. Regular fuel based cars are likely to be
respectively. You can assume that the models are capable of serving the Indian more feature rich than the client’s model. So, it wouldn’t make financial sense –
conditions. As far as the customer fit is concerned, there is no data available. given that the sale volumes have to be very high in order to achieve the desired
profit margins – to introduce the low end model either.
Alright. Before I develop a product strategy, I would want to understand the costs
involved. Is the client looking at setting up a manufacturing plant in India? Does this sound right? Or am I missing something here?

© Management Development Institute, Gurgaon | 2024- 2025 104

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 2: EV Manufacturer

Industry Automotive

Level Beginner

That’s an interesting approach. Our initial research has also suggested that the high That sounds right. So, what is the number you are going to arrive at?
end luxury model is best suited among the 3 alternatives for the Indian market.
How long would it take to break-even and achieve the desired profits? Would it be Assuming India’s current population to be 1.4 Billion, the number of luxury electric
possible to reach these numbers in the Indian market? cars expected to be sold are 140 per year. Accounting for under accommodations
and impulsive purchases, I would ceil the number at 200.
Sure. Let me work out the math to understand the required sale volumes.
One-time Fixed Investment = $ 2 Billion Perfect. That number makes better sense. This is a very strong analysis. So what
Selling Price of Luxury Model = $ 200,000 would your final client recommendations be?
Per Unit Variable Manufacturing Cost = $ 140,000 (@70% Variable Costs)
Contribution Margin = $ 60,000
Break-even Sale Volume = 33,334 Units We started out on the premise that the client has decided to actually enter the
Similarly, for 30% return on the fixed investment (At the same contribution Indian market. So my recommendations to the client would be two fold:
margin), Sale Volume = 43,334 Units First, the current Indian market for EVs is in a very nascent stage, and it might be
a little early to enter the market and setup operations at scale. So, the first
I’m assuming that the production set-up will have the capabilities to meet this suggestion is that the client should not enter the Indian (and other Asian) markets
demand. Do we have data on how many units are expected to be sold in the first at this point in time.
year, and what the subsequent year on year growth is expected to be?
Second, if the client still chooses to enter the market, they need to embrace the
Alright. Those numbers make sense. In the US market, the client had sold nearly fact that their expected return on Fixed Investments (~30%) in the near future is
500,000 vehicles in the past year in a 50-40-10 split between the affordable, mid- certainly impossible. The mere break-even, even with full scale operational setup, is
commercial and luxury models. Based on these numbers, can you forecast the expected to take well over a decade. Additionally, the client will only be able to
numbers for the Indian market? Do they make sense? manufacture and sell the luxury model, if any at all. So setting up its own
production capabilities in India would be a very risky strategy for the client – with
Sure. So, out of the 500,000 units sold, 50,000 units were the luxury variant. To almost no payoff potential.
get the corresponding volumes for the Indian market, I would like to use the PPP
A reasonable alternative for the client is to consider exclusive partnerships and JVs
adjusted per capita GDP ratios. India’s PPP adjusted per capita GDP is about 10%
with established OEMs in India. The client can enable the technology, set
of that of the US. From that we project the sales in India to be 5000 units in the
production and quality standards, offer manufacturing expertise, and lend it’s
upcoming year. However, this number seems to be rather high. I’d like to do a
strong brand. In partnership with Indian (and established foreign) OEMs and
sanity check on this number.
assemblers, the client may consider entering the Indian market with co-branded
Yes, makes sense. Go ahead. EVs. While challenges such as marketing communications, adoption, and after sale
service will continue to exist, it is financially much more easier for the client to
Less than 0.001% of India’s population falls under the super rich category. Among implement.
these people, less than 20% are likely to consider the decision to go for the luxury
electric vehicle, and less than 5% of those in the final consideration are likely to
actually make the purchase. Wonderful. That is a very good analysis. We can close the case here.

© Management Development Institute, Gurgaon | 2024- 2025 105

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 2: Summary

Prompt: Your Client is the largest global manufacturer of EVs. The firm invests heavily in R&D and its advanced battery technology has enabled it to
penetrate the mid and upper strata of the US automobile (car) industry. The firm sees opportunity to enter the Asian markets – particularly India. They want
to understand what the strategy should be to enter this market. Assume that the decision to enter has been made. What would your product strategy look
like?

Case Facts Interviewee Feedback Approach

▪ Market Entry conditions What Went Well?

i. Market, Regulation & all Market Entry
▪ The thought process during analysis
other external factors-
the entire interview was very
favourable
clear and comprehensive
ii. Operational, Financial and
Organizational factors- ▪ Was able to use the concepts
Positive Go No Go
of Purchasing power parity of
India and US while
▪ Product categories
forecasting the units in the
Luxury, mid and affordable
Indian market Operational Marketing &
worth $200k, $90k and $40k Pricing planning1 Financial planning Launch strategy
respectively ▪ Ability to include real world planning Communication2
data related to EV
▪ Costs involved
infrastructure and customer Setup production 200 units not Explore JVs and
Fixed - $2B & variable costs
perception towards EVs plant in India for enough to reach partnerships
ranging between 70% to 75%
Common mistakes $2B breakpoint
▪ In US, client sold 500K
vehicles in 50-40-10 split ▪ Not conducting a sanity check
across affordable, mid and on the data in the context of
luxury segments respectively India
Recommendations Uninvolved Branches

Conclusion: Since EV is at a nascent stage in India, there isn’t enough 1. Pricing planning was not discussed as part of the case interview
scale to achieve financial success yet. Hence, the client should 2. There might be some communication and marketing challenges but that was not discussed as part of the
reconsider entry into India. transcript and is something that the client would need to take up in the future
Short Term Recommendation
▪ Due to the nature of fixed costs and the long break-even time period
associated with this process, the client should explore opportunities
like Joint Ventures and Exclusive Partnerships
Long Term Recommendation
▪ As the EV infrastructure and customer preference evolve in India, the
client should explore options of opening its own facilities in the future
© Management Development Institute, Gurgaon | 2024- 2025 106
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 3: Autonomous E Bike

Industry Automotive

Level Beginner

Prompt: Your Client is a manufacturer of novel Autonomous Self-balancing Electric Bikes. A functional prototype is ready, and they want you to help develop a product
launch strategy for the right markets. How would you go about it?

That’s a very interesting product. Can you please tell me a little more about the Sure, go ahead.
Autonomous Self-balancing Electric Bike? What is this product? And what are its
features? I would like to look at this like a new product launch and analyse 3 segments –
The Autonomous E Bike is a novel 2 wheeled, self balancing vehicle that users can a) the markets to enter – if and how,
ride on (standing). It is a dock based electric commute option that serves users on-
b) the business operating model and scalability, and finally
demand, through a mobile application. It has an expected range of 2 km, and can
navigate independently from and to its closest dock stations. c) supporting financial and marketing strategies for the client.

That’s very interesting. Per my understanding, the product would serve That sounds like a good approach. Please go ahead.
requirements in last mile commute and micro mobility. However, the range
limitations and autonomous features greatly limit the product’s applicability and we I’d like to start with the suitable markets to enter, and see if they have enough
may have to look at niche use cases. Is the client willing to change some of the financial and growth potential. Given the product’s capabilities, use would be
product features, and build a model that supports operations similar to that of Yulu, restricted to controlled residential and commercial environments, where micro
Bounce, or Vogo, for example? mobility has significant potential. Some applications that I can think of include large
apartments, gated housing communities, SEZs and technology parks, large
Yes. Micro-mobility is the client’s focus area. Autonomy and Electric Drives are the
corporate and academic campuses. Would you like me to do a numeric analysis of
key differentiators for the client’s product and these features can not be
one of these segments?
compromised upon.

Okay, I understand. So, I’m assuming that the prototype has been promising, and That’s a good start. The client is indeed keen on starting with gated communities
the client wants to know where and how to introduce the product. Is that right? Are and large campuses. Can you estimate the number of such bikes needed to serve
there any other technology or business constraints that I should consider? the community at MDI Gurgaon?

Yes. The prototype has been promising. However, the autonomy of the bike is not Sure. The average batch size at MDI is about 650 across the all programs. At any
advanced enough for it to navigate open urban environments. The bike can given time the number of students on campus is approximately 800. Given the size
navigate through fairly complex environments where there are no sudden of MDI’s campus, there would less than 10% unique users from the student
disruptions. Besides, remember the fact that the bike is a dock based commute community. Among the 30 faculty members and 20 administrative and support
option. staff, there are likely to be less than 1% unique active users at any given time. In
Okay. Let me get my thoughts together and develop a framework. all, I would say 70 bikes would suffice for the MDI campus here in Gurgaon.

© Management Development Institute, Gurgaon | 2024- 2025 107

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 3: Autonomous E Bike

Industry Automotive

Level Beginner

However, to have maximum usage and on-demand availability of the E-bikes, it That’s a good suggestion. No, let’s stop here. It was good interacting with you.
would be important to strategically place the docking stations. Based on mobility
between commonly visited locations on campus, I recommend that 4 docking
stations be installed – one each at the entrance, the hostel block, the academic
block, and the canteen/mess area.

Okay. That’s a good analysis. Can you recommend an integrated communication

and pricing strategy for the product? How should the client go about selling the
offering and how should it be priced?

Sure. Again, I would like to highlight the importance of launching the product in a
controlled environment, and offering an integrated service portfolio with it.
Marketing and communication efforts need to be directed towards commercial and
retail builders, with a focus on developing an integrated technology
hub/township/apartment complex that has state of the art capabilities in micro
mobility. Further, large corporate and academic campuses should be targeted with
the central idea of providing convenience, and making these campuses eco friendly
with zero vehicular emissions. Extensive opportunities exist across the spectrum.
IIT and IIM campuses, the Infosys campus in Mysore, and TCS campus in Siruseri
offer great potential for such products.

Yes. That sounds right. Can you talk me through your approach for helping the
client determine and adopt a pricing strategy ?

Definitely. I would like to look at the 3 standard pricing models and suggest the
right strategy based on which model makes financial and strategic sense – a) Cost
+Margin Model, b) Value Model, and c) Competitive Pricing Model. Based on our
targeted selling markets, competition is a critical factor. Providers like Yulu and
Ofo, have alternatives such as pedal bikes and electric scooters. To be able to sell
our products and services, we will need to price them competitively. So, I
recommend that we adopt a competitive pricing strategy, even if it means that we
will have thin (or even negative) margins initially. Do you want me to conduct
further analysis of such a strategy?

© Management Development Institute, Gurgaon | 2024- 2025 108

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 3: Summary

Prompt: Your Client is a manufacturer of novel Autonomous Self-balancing Electric Bikes. A functional prototype is ready, and they want you to help develop
a product launch strategy for the right markets. How would you go about it?

Case Facts Interviewee Feedback Approach

▪ Product differentiator What Went Well?

Novel 2-wheeled, self- ▪ Ability to use the relevant Market Entry
balancing dock based electric data for market sizing of analysis
vehicle with an expected potential customer base
range of 2kms
▪ Understanding of the
▪ Category Limitations of an electric Go No Go1
Micro mobility mobility vehicle
▪ Target segment ▪ Knowledge of Different
Pricing strategies Marketing &
Large apartments, gated Pricing planning Operational planning2 Financial planning3
Communication
communities, SEZs & Common mistakes
technology parks & campuses
▪ Not asking relevant Commercial buyers
▪ The bike can navigate preliminary questions to Competitive like corporates,
through fairly complex understand the case better Cost Based Value Based
Based educational
environments where there institutes
are no sudden disruptions
▪ Not advanced enough to
navigate open urban
environments
Recommendations Uninvolved Branches

Conclusion: The client should go ahead and launch the product in a 1. Based on the discussion and opportunity, product should be launched
controlled environment and offer integrated services with it. 2. No discussion regarding the operational planning has been mentioned in the case
3. Financial planning was not in the scope of the case discussion and is assumed to be sufficient enough for
Short Term Recommendation
the investment
▪ Large corporate and academic campuses should be targeted
▪ The products and services should be priced competitively even if it
means that we will have thin (or even negative) margins initially
Long Term Recommendation
▪ Continue to innovate the product prototype to be able to navigate
even in sudden disruptions environment

© Management Development Institute, Gurgaon | 2024- 2025 109

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 4: Anti-Depressant

Industry Healthcare

Level Intermediate

Prompt: Your Client is the US pharmaceutical division of an MNC. In 2 months, the division expects to receive the FDA’s approval to launch an anti-depressant drug. The
division, however, has concerns over the market potential for this drug and its ability to reach the key prescribers in this therapeutic category. We have been asked to help
determine whether they should – a) launch independently, b) co-market with a partner, or c) sell, license or swap the drug. How would you go about it?

Sure. Sounds quite interesting. Before I proceed, I would like to understand what Yes, that’s right. The client’s technology is based on tricyclic formulations. The
the client’s primary apprehensions are. Any specific aspects that the client is existing competitive environment in this segment is very intense and will only
concerned with? increase if the segment shrinks – which is likely to happen.

The concerns over market potential center on whether the drug can gain adequate That drives me towards concluding that the overall segment is not very attractive.
competitive advantage in a market having two dominant, patent-protected What percentage of the market share by volume do the competitors have?
competitors and nearly 100 generic competitors. Additionally, a higher technology
antidepressant, which appears to offer therapeutic advantages, was recently In our own technology segment, the leader has approximately 10% and the
introduced by a competitor. number two player has about 4%. The rest of the 100 competitors each has less
than a 2% market share. By comparison, the new technology has captured a 20%
Alright, noted. To understand profitability potential, I’d like to explore the market market share of the total antidepressant market.
attractiveness and our competitive position within that market in order to
determine the market size we can target. Next, I’ll explore the major cost drivers
Sure, noted. How much will our client's product be able to differentiate itself within
and how they impact the entry decision.
our technology segment?
Alright. That sounds fair. Please proceed.
Not much. In a market research study we commissioned, the product was
Starting with the revenue, I’d want to understand first what the overall market perceived to be very similar to the next best product in our technology segment,
revenue opportunities are for this type of drug and for our product specifically. The slightly inferior to the number one product, and slightly better than the generic
client has expressed concern over the market potential for this drug. How big is the products. The new technology introduced by the competitor was viewed as far
market and what is its potential growth rate? better due to a lower level of sedation.

The overall antidepressant drug market is relatively attractive at $1.1 Billion per
year and is growing well in excess of the population growth rate. So, to summarize the market environment, although the anti-depressant market is
attractive, the segment that we would be participating in is relatively unattractive
So, the overall antidepressant market is attractive at $1.1 Billion, but within that and runs the risk of becoming smaller and more competitive over time.
market, there are segments based on different types of technology that may or Additionally, within this unattractive segment, we have limited ability to
may not be attractive. Does that sound right? What is the technology associated differentiate ourselves relative to our competitors, and thus, will not be able to
with our client’s product? And how fast is this segment growing? charge a premium price.

© Management Development Institute, Gurgaon | 2024- 2025 110

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 4: Anti-Depressant

Industry Healthcare

Level Intermediate

Yes, that is right. So, what next? Yes, that’s absolutely right.

I would think that this unattractive market and relatively undifferentiated position So, that eliminates the option of directly launching the product. Co-marketing and
within that market would translate to a low market share. I would estimate that our branding with a partner in the space would be a good option for the client.
share might be lower than either of the branded products given our new presence
in the market, say maybe a 2-4% share and this, like the rest of the segment, Okay. Can you walk me through that thought process?
would probably decline over the next couple of years. Sure. By entering a co-marketing agreement, the costs of the sales force is spread
Okay, that makes sense. across several products of the two companies. As we would choose a partner who
does not have a competing product, our drug would get the appropriate selling
Knowing that our revenue potential is relatively low puts more pressure on attention warranted. The partner is likely to have existing relationships with the
minimizing the costs if we were to market the drug. I would want to see what area psychiatrists and doesn’t need to take time to further establish these relationships.
within the cost structure impacts profitability the most. What percent of net sales is This might help the sales of our product might peak sooner. So, all in all, I would
COGS? Further, who would we be selling to? think that if we were to market this product, it would be a less costly and higher
value option to enter into a co-marketing agreement rather than go at it alone.
COGS is about 20% of net sales, and most other expenses are SG&A. Good point
on the customer. For such a drug, we would be selling directly to doctors – That makes sense. So, is that your final recommendation?
Psychiatrists and General Practitioners. It is the Psychiatrists that determine the
success of failure of such a drug. Not yet, I’d like to look at the final option of selling/licensing or swapping out the
drug. Do we have any information pertaining to this? Are there companies who we
Sure. COGS seems to be reasonable and is not of concern at this point. SG&A are can potentially sell to, or those that would want to use our formulations?
regular expenses and would be at realistic levels. I’d now like to focus on the
What in your opinion would be the reasons to go for any of these alternatives?
people we sell to – the physicians. Do we have expertise in pharmaceutical sales?
Do we have good relations with doctors? The client would want to choose the option that is the most value creating. There
could be several reasons for going with this alternative. a) We might sell our drug
Yes, that’s right. No, we do not have any experience with pharmaceutical sales. We
patent because the sum of the promotional or overhead costs may make it
neither have relations with the doctors nor a trained salesforce that can do it. We
unprofitable for us to market whereas a company having a similar product line
will have to build those capabilities ground up.
might be able to carry this product at a very small incremental cost. b) We might
Okay, noted. In undertaking this exercise, there would be significant costs that license it which would help companies with the expertise to actually sell the drug.
would have to be incurred. Further, pharmaceutical sales work based on good c) We might swap it if we could find a company in need of this type of drug while
relationships between manufacturers and prescribers. This would take time and having an innovation that might fit more with our existing infrastructure.
efforts to work, and given the already bleak state of the market segment, the client To evaluate these options, we might look at projected cash flows and discount
does not have the leg room to incur higher costs or the benefit of building relations them backwards to see which of them is the most value creating alternative.
over long time periods. They need to act now if all their R&D is to yield some
tangible benefit to the company. Perfect. That’s good. We can stop here. Thank you for your time.

© Management Development Institute, Gurgaon | 2024- 2025 111

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 4: Summary

Prompt: Your Client is the US pharmaceutical division of an MNC. In 2 months, the division expects to receive the FDA’s approval to launch an anti-
depressant drug. The division, however, has concerns over the market potential for this drug and its ability to reach the key prescribers in this therapeutic
category. We have been asked to help determine whether they should – a) launch independently, b) co-market with a partner, or c) sell, license or swap the
drug. How would you go about it?

Case Facts Interviewee Feedback Approach

▪ Industry attractiveness What Went Well?

Market Entry
The overall antidepressant analysis
▪ Clear thought structure
market is worth $1.1B
throughout the discussion
▪ Competitors with to-the-point questions
2 dominant patent-protected
▪ Ability to identify various cost
competitors and 100 generics Go No Go1
drivers for a pharmaceutical
▪ Market share business
In the client’s segment, the
▪ Assessing market potential
market share of competitors
and determining market
is 10% and 4% while the rest Marketing &
share within the client's Pricing planning Operational planning2 Financial planning
have less than a 2% share Communication
category
▪ Current cost structure
Common mistakes
COGS is 20% of net sales & Low product Sell directly to the COGS = 20% of
the rest expenses are SG&A ▪ Mistaking the market share differentiation; low doctors and the Net Sales and the
for the overall antidepressant pricing Practitioners rest SG&A
▪ Client does not have any
market as the prospective
experience with pharma sales
share in the client category
& will have to build those
capabilities ground up
Recommendations Uninvolved Branches

Conclusion: Since the client currently doesn’t have experience with 1. Based on the discussion and opportunity in the antidepressant segment, the product should be launched
pharmaceutical sales and would incur high costs if they decide to launch even though not independently
the product independently, Co-marketing and branding with a partner in 2. Since there was no operational planning discussion in this scenario, it can be assumed that there is no
the space would be a good option for the client problem

Short Term Recommendation

▪ Apart from co-marketing, consider other options of selling/licensing
or swapping out the drug
Long Term Recommendation
▪ Invest in R&D to work on new technologies that could help acquire
more market share of the antidepressant market
© Management Development Institute, Gurgaon | 2024- 2025 112
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 5: In-Flight Connectivity

Industry Travel

Level Intermediate

Prompt : Your firm is a low cost US domestic airline carrier considering In Flight Connectivity technology. With competitive pressures rising, Wi-Fi in the sky is becoming a
basic offering. Your client has yet to enter the game, but they know it’s something they need to consider to stay competitive. What are some of the key considerations for
their client as they launch their Wi-Fi in the Sky product?

Sure. Before I proceed, I would like to understand what all the client refers to as In Analyzing the data, I can come to the following conclusions:
Flight Connectivity. -The Airline will require a total investment of $9m including all the aircrafts
IFC includes only Wi-Fi connectivity. -We will have a total of 7M passengers in 2 years assuming 100% occupancy
-Using the above data, we will need a take rate of about 13% across our flights.
Alright, noted.
Do we have any market research data that would point at this figure being
To understand the case a little better I would like to know our client’s operational
attainable?
routes and competitors.
The airline flies primarily domestic routes within the continental US, as well as Market research tells us that take rates are only between 5 and 10% today for paid
select flights to Canada, Mexico, and the Caribbean. connectivity, so our client is concerned about being able to hit the break-even
The information on competitors has been drawn up by analysts and can be found in targets. What do you think are the key drivers of IFC take rate?
Annexure 1. What do you think can be inferred from this competitor data?
Some factors I can think that would drive the IFC take rates are:
Looking at Competitor 1: -Flight characteristics: duration, flight time (night vs daytime), other entertainment
systems
-Pros: less operational cost burden, potential for customer experience continuity
-Product characteristics: price, speeds available, quality of service
-Cons: limited control over pricing, brand fit considerations -Passenger characteristics: age, gender, income, cabin class, business/leisure
Looking at Competitor 2:
-Pros: control over pricing, control over user experience, potential for better ROI, Based on these factors and data how do you think the client should proceed with
easier to integrate with airline’s other products like IFE their go to market?
-Cons: more operational burden on airline, higher costs
Firstly my recommendation would be the client try to create a branding with the
best of the both competitor models by partnering with a IFC vendor wholesale for
That is a reasonable conclusion regarding the competitors. the technology while having a control on the pricing and avoid going down the free
After some initial analysis, the client has decided to partner with a IFC vendor to connectivity solution being a low cost carrier.
outfit all 90 of its planes. An investment of $250k per plane is required which the The client should also begin with pilot projects on routes that is expected to have
airline and vendor will share 40-60, and then the airline will pay the vendor a per- more demand based on the above mentioned factors of take rate and will help us
session fee to cover operating expenses. The airline wants you to figure out what understand how we can bridge the gap in required take rate.
percentage of their passengers need to purchase a session for the airline to break
even in 2 years at $10 per session. Use the data given in Annexure 2. Can you identify the risks associated with the key decisions in this implementation?

© Management Development Institute, Gurgaon | 2024- 2025 113

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 5: In-Flight Connectivity

Industry Travel

Level Intermediate

Annexure 2
Due to large upfront investment, contract is likely to be 10+ years long, so smart
vendor selection is very critical. Since we are trying to have a model where we have
control over the session rates there might be a trade-off with technology. Wide Body Narrow Body
Difficult to strike balance between maximizing revenue and maintaining sufficiently
Fleet Size 10 80
low take rate to ensure higher speeds.

I think that is satisfactory and we can close the case here. Passengers Per Aircraft 300 100

Flights Per Year 2,500 27,500

Annexure 1 Candidate Calculations

To calculate the initial investment:

Competitor 1 Competitor 2
• Airline share of investment = $250K x 40% = $100K per plane
• Wide body = 10 planes x $100K/plane = $1M
Major domestic and Domestic discount carrier
• Narrow body = 80 planes x $100K/plane = $8M
Airline Description international carrier with with 90% fleet IFC
• Total investment = $1M + $8M = $9M
65% fleet IFC coverage coverage
To determine total passengers in 2 years:
IFC Branding Vendor-branded Airline-branded
• Wide body = 300 seats x 2,500 flights/yr. x 2 yrs. = 1.5M passengers
• Narrow body = 100 seats x 27,500 flights/yr. x 2 yrs. = 5.5M
Determined by vendor, Determined by airline, passengers
Pricing
average $25/session Free • Total = 1.5M + 5.5M = 7M passengers in 2 yrs.

To determine % take rate needed:

Revenue Model Revenue share Wholesale
• Set up the following equation and solve for [take rate]:
• 7M passengers x [take rate] x $10/session = $9M
• [Take rate] = 12.9%

© Management Development Institute, Gurgaon | 2024- 2025 114

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 5: Summary

Prompt: Your firm is a low-cost US domestic airline carrier considering In Flight Connectivity technology. With competitive pressures rising, Wi-Fi in the sky
is becoming a basic offering. Your client has yet to enter the game, but they know it’s something they need to consider to stay competitive. What are some of
the key considerations for their client as they launch their Wi-Fi in the Sky product?

Case Facts Interviewee Feedback Approach

▪ About client What Went Well?

The client operates domestic
▪ Ability to understand the cost Market Entry
routes within the continental
drivers of an airline business analysis
US, as well as select
international flights to ▪ The candidate was also quick
Canada, Mexico, and the enough to understand the
Caribbean Key factors driving take rates
in a business Go No Go1
▪ Competitor 1: Major
domestic and international ▪ Understanding of pricing
carrier with 65% fleet IFC flexibility and pros & cons
coverage, vendor branding, with respect to partnering
an average price of with vendors Pricing planning2 Operational planning3 Market planning Financial planning
$25/session, and a revenue
share model Common mistakes

▪ Competitor 2: Domestic ▪ Focusing only on short term Domestic as well as $9M investment
discount carrier with 90% gains and not having a long International 7M passengers x [take
fleet IFC coverage, airline term strategic goal in the rate] x $10/session =
branding, price determined by mind while deciding on the $9M
the airline itself, and a recommendations [Take rate] = 12.9%
wholesale revenue model Annexure 2

Recommendations Uninvolved Branches

Conclusion: Create a branding by partnering with a IFC vendor 1. The discussion was about the considerations for the “Go” decision
wholesale for the technology while having a control on the pricing. 2. There has been no mention regarding the Pricing and Operational planning that needs to be considered at
this point in time
Short Term Recommendation
▪ Begin with pilot projects on routes that are expected to have more
demand and will help to understand how to bridge the gap in
required take rate
Long Term Recommendation
▪ Based on the results of pilot projects, determine routes and strategy
for future expansion
© Management Development Institute, Gurgaon | 2024- 2025 115
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 6: Men’s Magazine

Industry Media

Level Intermediate

Prompt: Your client a major Indian publishing company that produces educational as well as women’s magazines. The two magazines are profitable but has stagnant
growth. He wants to start a third monthly magazine targeted at 25-50 year old men (e.g. GQ Magazine). His stated goal is to generate circulation revenues of 100 crores in
the first year. He has hired you to figure out whether this is possible and should he go ahead with the plan?

Just to clarify my understanding, the client already produces educational and Looking at the data I think we can capture 20% market share easily in the first
women’s magazines. Because of stagnant revenue growth the client is looking for a year from Competitor 2 and 3, considering we can keep some global content in our
new opportunity in the form of a new magazine. issues. That would give us an addressable market of 1 million.
Yes that is correct. And that new magazine is a men’s magazine.
Based on that if I look at the revenue, I am assuming a 60% subscription online
I would like to begin by understanding the revenue goals and pricing model. that would give us a revenue of
This would allow me to understand the expected revenue by placing it against the
(600,000*100*12) + (400,000*200*12) = 72 cr + 96 cr = ₹168 crore
estimated target market size. Finally I can compare it with the goals to verify if we
should go ahead with the plan.
Therefore, we can comfortably estimate a revenue of north of 100 crore as was the
So our pricing model for the new magazine will be ₹200 per issue for the print goal for our client.
version and a ₹100 per issue online subscription.
How can we help achieve these goals?
Our goal to ahead with the launch is to achieve a revenue of ₹100 crores in Year 1.
We need to gather subscribers by aggressive marketing. We could leverage our
existing data on readers and push emails to let them know about our magazine. We
I will start by estimating the market size. need to spend on having high profile lead stories on our initial issues. We can
The total Indian population is approximately 1B. Approximately 25% of the further leverage social media to run targeted ads based on user data which might
population falls between 30-50 age group or about 250 million people. align with our content.
Approximately 50% are male or 125 million. Of the 125 million 30-50 year old men
in that age group, assuming that at least 40% would read a magazine or 50 Thank you. I think we can close the case here.
million.
Given the wide range of magazines on the market assume that only 10% of
magazine readers would want to read a men’s journal or 5 million target Competitor 1 Competitor 2 Competitor 3
customers.
Market 50% share, Steady 30% share, Shaky 20% share, Dying
So the men’s magazine market is of 5 million. What percent of the market do you
think we can capture? There are 3 major competitors and their information is Content India Focused India Focused Global
attached.

© Management Development Institute, Gurgaon | 2024- 2025 116

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

New Product Launch Case 6: Summary

Prompt: Your client a major Indian publishing company that produces educational as well as women’s magazines. The two magazines are profitable but has
stagnant growth. He wants to start a third monthly magazine targeted at 25–50 year-old men (e.g., GQ Magazine). His stated goal is to generate circulation
revenues of 100 crores in the first year. He has hired you to figure out whether this is possible, and should he go ahead with the plan?

Case Facts Interviewee Feedback Approach

▪ About client What Went Well?

The client sells educational Market Entry analysis
▪ Clear thought structure
and women’s magazine
throughout the discussion
▪ Competitors with to-the-point questions
i. Competitor 1 – 50%
▪ Calculation of Target market
steady share, India Go No Go1
size was done properly
focussed
ii.Competitor 2 – 30% shake Common mistakes
share, India focussed
iii.Competitors with 3 – 20% ▪ Not asking relevant questions
dying share, globally to get the data from the Operational Marketing &
Pricing planning Financial planning
focussed interviewer and ending up on planning2 Communication
▪ About new product a lot of assumptions
The new magazine will be a ₹200 for print Aggressive marketing – ₹168 crore revenue
men’s magazine and will be ₹100 for digital emails, social media
priced ₹200 for the print
version and ₹100 for the
digital version
▪ Goal with the launch is to
achieve a revenue of ₹100
crores in Year 1
Uninvolved Branches
Recommendations

Conclusion: Since all the conditions seem favorable, go ahead with the 1. Based on the discussion and availability of resources, the product should be launched
product launch by gatheringer subscribers through aggressive 2. There has been no mention of Operation strategy and is assumed to be sufficient to sustain the product
marketing campaigns launch

Recommendations Target Market Size Calculation

▪ Leverage the existing data on readers and push emails to promote
the magazine
▪ Leverage social media to run targeted ads based on user data which Population of India = 1B of which population between 30-50 = 25% or 250M; Men reading magazines = 40%
might align with the client’s content of 50% male of 250M people = 50M;
▪ Spend high capital on having high profile lead stories on the initial Men who are interested in Men magazine = 10% of 50M i.e., 5M
issues

© Management Development Institute, Gurgaon | 2024- 2025 117

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Growth Framework

Framework

Cases based on opportunities to grow business – which includes not just financial growth but also includes, geographical & product wise growth

Growth Opportunities

Existing New

Helpful if you already know

Price/Unit # of Units New Product New Market M&A JV some strategies that existing
companies follow & why?

❑ Treat similar to ❑ Need to directly apply ❑ Need to apply basic Use first principle thing to
profitability (Revenue Market entry business principles & get to answers for most next
side analysis) framework find complimentary steps
growth opportunities
❑ Key focus needs to be ❑ Focus on competitors
increasing avenues ❑ Justify why?, Always look at feasibility of
❑ Can include pricing
whenever there’s a the solution before
❑ May need to also framework to do a
distinction between suggestions
assess cost levers feasibility study
M&A or JV

High Level Analysis

❑ Reiterate the problem to have a clear understanding of the case

❑ Feasibility & Risk are two important aspects of the framework, make sure to address these during final recommendations
❑ Growth is a more intuitive case, be flexible in your approach for these types of cases
© Management Development Institute, Gurgaon | 2024- 2025 118
H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Growth Case 1: International School

Industry Education

Level Intermediate

Prompt: Your Client is an International School which is operating in India. Client wishes to increase the growth of their business. How can you help them achieve their goal?

I would like to start by understanding the current scope of business of the client. School has the infrastructure to increase the intake. However, the students & their
How many schools does the client operate? parents won’t take this news positively due to fears of drop in quality. Hence, the
client is not looking to increase intake of students.
In India, the client runs 4 schools. 2 each in Delhi & Gurgaon.
Okay. The 2nd component would be fees of students. Can the client further increase
Okay. What is the level of education that is imparted in the school? the fee they are charging to students?

The schools are senior secondary. They cater to classes 1 to 12. Although the schools cater to affluent economic class, the client fears that
increasing fees just after COVID would give them bad press. So, increasing fees is
What is the fee structure of the school? How does that compare to the competitors off the table for the client.
in this space?
Okay. So we can then look into new opportunities for the client.
Since the client runs an International School, the fee is towards the higher side. The client can diversify its services offerings. Along with providing regular classes,
They cater specifically to upper-middle class & upper class people. the client can look forward to launching different programmes or certifications
which are taken over the weekend. These new programmes would not only be
Alright. Since the client wants to improve growth of the business, I would like to
limited to school students and would also extend to working professionals.
break the problem down into existing opportunities & newer opportunities. Should I
start with the existing opportunities first? Makes sense. Any other opportunities?
Sure, Go ahead. Yes. Client can also look at expanding their business in other cities as well. Since,
currently they operate in only the NCR region, they should expand their footprint in
First, I’ll segment existing business into the number of students & fee per student.
other cities and states too.
Do we have any data regarding number of students per class and number of
sections in a standard? Okay. So what will be some of the factors you will look at before choosing a city?
Take an average of 40 students per section & 5 sections in a standard. Since the client’s operates an International school & their target audience is upper-
middle & upper class, we should focus on metro cities with high per capita income
So, based on these numbers there would be 40*5 = 200 students per standard.
& a much larger affluent class like Mumbai, Kolkata and Bangalore. Before setting
Hence, for the entire school there would be total 2,400 students across all
up new schools in these cities, we can look for joint ventures or M&A opportunities
standards from 1 to 12.
which can help the client. Also, the competition in these cities would play a huge
One way to increase growth of the business would be to increase the intake of
role before we finalize a city for expansion.
students in the school. Does the school have the infrastructure to increase intake?
How would the current students or their parents react to increasing the intake? Great! We can close here

© Management Development Institute, Gurgaon | 2024- 2025 119

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Growth Case 1: Summary

Prompt: Your Client is an International School which is operating in India. Client wishes to increase the growth of their business. How can you help them
achieve their goal?

Case Facts Interviewee Feedback Approach

▪ Current scope of business What Went Well?

4 schools – 2 in Delhi & Growth
▪ Comprehensive questions
Gurgaon
▪ Understanding the scope of
▪ Fee is on the higher side and
the business
hence caters to Upper and
Upper-Middle class economic ▪ Looking at existing and new Existing New
group opportunities opportunities1 opportunities
▪ Each class has 5 sections & Common Mistakes
each section has an average
of 40 students ▪ Not breaking down the
opportunities into buckets Increase New geographies/ New products/ Acquisitions and
Increase volume2
▪ Increasing # of students is before delving into each fee/prices3 markets services mergers
not possible as it would lead further
to fears of drop in quality
▪ Increasing fees of students is Joint ventures
Metro cities Programmes &
and mergers with
also off the table as it would beyond NCR certifications
other schools
incite bad press especially
after COVID

Recommendations
Uninvolved Branches
Conclusion: Client can increase the growth of their business by looking
at new opportunities 1. The existing opportunities did not make sense for the client in this case
Short Term Recommendation 2. Increasing the intake of students would affect the quality and hence, the school is not willing to increase
▪ Launch new programs and certifications beyond the regular classes the intake
▪ Make these available for working professionals as well 3. Increasing the fees post COVID would give the school bad press

Long Term Recommendation

▪ Expand in other metro cities beyond NCR and look at JV and M&A
opportunities

© Management Development Institute, Gurgaon | 2024- 2025 120

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Growth Case 2: Beverage Company

Industry FMCG

Level Intermediate

Prompt: Your Client is a leading beverage company and has seen a drop in growth since the last year. You have been onboarded to help the client identify the cause of this
decline and reverse the trend

Thanks. I would like to start by understanding if the decline revenue growth is Yes. There are 3 brands in the Soda segment with the following data
specific only to the client or it is across the industry.
Litres (MM) Revenue (₹ MM)
This issue is specific only to the client. Category
2020 2021 2020 2021
Okay. So since the issue is client specific, I start by analyzing the product portfolio
of the client. Major products a beverage company sells are soda, water, shakes, Brand A 50 30 1,800 1,080
syrups, smoothies etc. Could you confirm which products the client sells?
Brand B 25 30 650 780
You have covered them all. Let’s club these into 3 segments – Soda, Water &
Others. Value Brand 25 60 550 1,020
Sure. So, since revenue has been dropping, we can divide revenue into price per
unit and volume sold. Does the client have any data regarding the same?
Okay. It is clearly evident that Brand A has suffered a huge loss in volume in the
Yes. Note down the following data - current year. Also, something to note is that volume of value brand has increased
to 2.4x but the revenue is still less than 2x. I would like to calculate prices next to
Litres (MM) Price per lit. (₹) Cost per lit. (₹) identify the cause.
Category
2020 2021 2020 2021 2020 2021 Sure. Go ahead.

Soda 100 120 30 24 15 15 So, both Brand A & Brand B have constant prices at ₹36 & ₹26 respectively.
However, value brand’s price has decreased from ₹22 to ₹17. So, the combination
Water 30 33 25 25 12 12 of decline in volume of A and reduced price of value brands have caused a decline
in revenue.
Others 10 11 50 55 30 30
Alright. What do you recommend to reverse this declining growth?
Okay. Based on this data, revenue of Soda segment has dropped over the past year We should focus on the declining volume of brand A. This can be done by studying
from ₹3,000M to ₹2,880M registering a loss of ₹120M. On the other hand both the market trends & consumer surveys to identify the reason of decline. Then
Water and Others segments have increased their revenue from ₹750M to ₹825M appropriate promotion activities can be taken up like marketing the drink to a
and from ₹500M to ₹605M respectively. So the decline in growth is due to Sodas different demography. Also, we can explore changing the placement of the product
segment. Does the client have any information about the types of brands in sodas? in stores.

© Management Development Institute, Gurgaon | 2024- 2025 121

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Growth Case 2: Beverage Company

Industry FMCG

Level Intermediate

Also, we can adjust the price of value brand to increase the overall revenue.
However, for this we need to understand the price elasticity before making the
decision as we wouldn’t want to alienate the value brand customers due to the
price change.

Alright. Anything else?

The recommendations so far relate to the current business. We can also explore
new business opportunities to increase the growth of the business. This would
involve exploring new products like energy drinks & low sugar drinks which can
supplement the current business by targeting the younger health conscious
audience. Additionally, we can also explore venturing out into new untapped
markets.

Great. Let’s end here.

© Management Development Institute, Gurgaon | 2024- 2025 122

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Growth Case 2: Summary

Prompt: Your Client is a leading beverage company and has seen a drop in growth since the last year. You have been onboarded to help the client identify
the cause of this decline and reverse the trend

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?

Client specific Growth
▪ Comprehensive questions
▪ Product segments
▪ Understanding the scope of
Soda, water and others
the business
▪ About the client
▪ Looking at existing and new Existing opportunities New opportunities
Client is a leading beverage
opportunities
company and has seen a drop
in growth since the last year Common Mistakes
wishing to find the cause of
decline and a strategy to ▪ The recommendations can be Volumes sold Price per unit New products Untapped market
reverse the trend more comprehensive

▪ Revenue of each segment - Loss of revenue - Soda value - Target young

and each soda brand in soda segment brand’s price health-conscious
mentioned in the additional - Decrease in vol. reduction audience
data section of Brand A

Recommendations Additional data

Conclusion: Client can increase the growth of their business by looking

Litres (MM) Price per lit. (₹) Cost per lit. (₹) Litres (MM) Revenue (₹ MM)
at both existing and new opportunities
Category Category
Short Term Recommendation 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021
▪ Countering volume decrease: 1) Studying the market trends &
Brand A 50 30 1,800 1,080
consumer surveys to identify the reason for decline 2) Appropriate Soda 100 120 30 24 15 15
promotion activities like marketing the drink to a different Brand B 25 30 650 780
demography 3) Changing the placement of the product in stores. Water 30 33 25 25 12 12
▪ Countering price reduction: Adjust price by considering the price Value
Others 10 11 50 55 30 30 25 60 550 1,020
elasticity of the brand Brand
Long Term Recommendation
▪ Countering price reduction: Adjust price by considering the price
elasticity of the brand

© Management Development Institute, Gurgaon | 2024- 2025 123

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Growth Case 3: Magic Show Company

Industry Entertainment

Level Intermediate

Prompt: Your client is a leading event management company which operates multiple entertainment events including one of the biggest magic shows of the country. The
magic show has been experiencing stagnant profitability since the past 3 years. How will you help the client take the decision of either continuing the magic show for the
next year or discontinuing it?

Sure! To reiterate my understanding of the case, the client runs one of the biggest What is the occupancy rate for the different types of seats?
magic shows of the country. The profitability has stagnated since the past 3 years &
the clients wants our help to decide to renew the magic show for next year or not. The occupancy for Super Deluxe seats is 100%, 80% for deluxe seats & 50% for
Is my understanding correct? classic seats.

Yes. That is correct. Based on these figures, the ticket revenue per show is ₹755,000. That translates to
~₹151M annual revenues from the magic show.
Okay. First I would like to gather some information about the client. Do they
operate pan India or in selected cities only? Are you sure? Is that the only stream of revenue for the magic show?

Client operates in only Delhi & plans to keep the same going forward as well. No, other sources of revenue would include sponsorships, hospitality &
Okay. I’ll start by breaking up profitability by revenue and costs. How have the merchandising as well. I missed these. Does the client have any information about
revenues & costs been since the past 3 years? these?

Both revenue & cost have remained stagnant since the past 3 years. Let’s assume that ticketing amounts to 75% of the total revenue. The rest comes
from all the sources you just mentioned.
Revenue is defined as price of a ticket multiplied by the quantity of tickets sold.
What is the price of ticket & has the same changed over this period? Alright. So that translates to ~₹1M revenue per show & a total of ~₹200M annual
Calculate the total revenue for the client. There are 3 types of seating in the revenue from the magic show.
theatre: Classic, Deluxe and Super Deluxe. The price of these tickets are ₹500,
Okay. Let’s move to the costs now. What will be the major cost components here?
₹800 & ₹1000 respectively.
What is the seating capacity for each category? Sure! So costs can be broken down into 2 components: Fixed cost & Variable cost.
Fixed costs would contain expense on rent, marketing, insurance & annual
The total theatre has 1500 seats, 300 being in Super deluxe category, 500 in contracts. Variable costs includes expenses on housekeeping, utilities, magic props
deluxe & 700 in Classic category. and wages of stage crew.
How many magic shows does the client operate? Correct. Note down the following annual costs - ₹20M salary of the main host,
₹20M on rent, ₹10M on insurance, ₹30M on marketing. Magic props cost ₹1,000
The client operates 1 show a day, for 5 days a week. The season for the shows is per show, Housekeeping costs ₹2K per show, crew & utilities costs ₹300K & ₹100K
40 weeks in a year. respectively on weekly expense.

© Management Development Institute, Gurgaon | 2024- 2025 124

H
Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Growth Case 3: Magic Show Company

Industry Entertainment

Level Intermediate

Ok. So based on this data, annual costs for the magic show will be ~₹96M. This gives
a profit margin of 52% for the client.
Alright, so what do you recommend?
I believe currently the client earns a good profit margin of 52%. This can be further
increased in the future by increasing the revenue or decreasing some of the costs.
Revenue can be increased by increasing prices of the ticket, increasing the number of
deluxe & super deluxe seats, offering bundled discounts. Also, number of shows per
day can be reduced & price of merchandizing can be increased as well.
On the other hand, costs can be reduced by renegotiating new contracts with the
staff, main host, switching to a different theatre with lower rent cost & changing the
insurance company with lower premium costs. Based on these, finally I will conclude
that the client should renew the magic show for the upcoming year as well.

© Management Development Institute, Gurgaon | 2024- 2025 125

H

Shape

H Frameworks and Cases

Description automatically generated with low
confidence

Growth Case 3: Summary

Prompt: Your client is a leading event management company that operates multiple entertainment events including one of the biggest magic shows of the
country. The magic show has been experiencing stagnant profitability for the past 3 years. How will you help the client take the decision of either continuing
the magic show for the next year or discontinuing it?

Case Facts Interviewee Feedback Approach

▪ Problem: Stagnation in What Went Well?
profitability since 3 years
▪ Comprehensive questions Growth
▪ Cities operated in: Delhi
▪ Understanding the scope of
(plans to stay there in future)
the business
▪ Seating (prices, capacity, Existing New
▪ Well thought out opportunities opportunities
occupancy): Classic (₹500,
recommendations
700, 50%), Deluxe (₹800,
500, 80%) & Super Deluxe Common Mistakes
(₹1000, 300, 100%)
▪ Not breaking down the Profits
▪ Timings: 1 show a day, for 5 opportunities into buckets
days a week, 40 weeks in a before delving into each
year further Revenue Cost
▪ Ticketing amounts to 75% of Increase Decrease
the total revenue
▪ Annual costs - ₹20M salary of - Prices - New contracts
the main host, ₹20M on rent, - # of seats - Lower Rents
₹10M on insurance, ₹30M on - Merchandising - Lower Insurance
marketing. Per-Show costs: premiums
₹1K for Magic props ₹2K for
Housekeeping, Weekly Costs:
₹300K & ₹100K for crew &
utilities respectively

Recommendations

Conclusion: Current annual cost is ₹96M and profit margin is 52%;

Profits can be increased by increasing revenue and decreasing cost
Recommendation
1) Revenue Inc. by increasing prices & # of seats, offering discounts.
Increasing the price of merchandizing
2) Cost dec. by renegotiating new contracts with stakeholders, lower
rent cost & lower insurance premium costs
© Management Development Institute, Gurgaon | 2024- 2025 126
H Frameworks and Cases

Unconventional Case 1: Manufacturing Plant

Industry Manufacturing

Level Advanced

Prompt: Suppose your client is a manufacturing company, demand for a product has been increasing but you are at maximum capacity. You don't want to increase
manpower or move towards automation, or put a new plant. Tell me how you will cater for the demand with the existing systems.

Sure. Just so I have understood the problem correctly, our client is a manufacturing Focus on availability, mainly on the batch cycle time and performance.
company which wants to cater to increasing demand without setting up new plant
or introducing automation. So Batch cycle time is mainly defined how much time is required to produce per ton
of product. It can be high due to multiple factors such as low maintenance, utilities
Yes, that’s correct. efficiency, working efficiencies of the machines, etc.
Before I proceed, I need to understand the business and industry a bit better, so Yes, so how can we then cater demand by focusing on these aspects
would like to ask few preliminary question for clarity.
We can achieve these aspects by focusing on operations management concepts.
Sure, Go ahead.
So for a better understanding, I will state the methods by which usually Yes, give me some of the ways.
companies increase capacity. Sure, some the ways can be-
1. Through CAPEX and putting up a new facility 1. Identifying why the process is slow, bottleneck areas and working on them
2. By making the process more efficient through automation or manpower 2. Applying Kaizen and doing improvements projects.
using 3. By identifying bottlenecks and leveraging innovation to eliminate 3. Reducing downtime through Poka Yoke, type 1 and type 2 errors.
bottleneck and optimize process 4. We can also introduce new technology or small system based changes such as
introducing new packings in a distillation column so as to increase capacity.
You are correct but I would suggest you explore the problem statement from
capacity point of view first.
Yes, you are correct.
Sure. So we can initially divide the capacity of the manufacturing plant into 2 parts-
1. No. of Machines Sure, should I summarize the case.
2. Productivity of each machine
Yes, that's correct. You can proceed ahead. No, that should be fine. Can you closely relate this case to any of the traditional
approaches and identify the equivalents?
Sure. Since it was mentioned that no automation can be done and we don't want to
put a new plant, I will explore the concept of productivity. I think this case is closely related to profitability framework. The revenue side was
equivalent to New Plant and Cost side was equivalent to Capacity.
Yes, Go ahead.
Good. We can close the case here. Thank you
So mainly productivity is defined in terms of Overall equipment efficiency, which is
a multiplication of availability, performance and quality. Which area should I focus
on?
© Management Development Institute, Gurgaon | 2024- 2025 127
H Frameworks and Cases

Unconventional Case 1: Summary

Prompt: Suppose your client is a manufacturing company. Demand for a product has been increasing, but you are at maximum capacity. You don't want to
increase manpower or move towards automation or put in a new plant. Tell me how you will cater to the demand with the existing systems.

Case Facts Interviewee Feedback Approach

▪ Problem Area What Went Well?
Capacity Management • Clear understanding of
▪ Constraints manufacturing processes and
No increase in manpower, no constraints Capacity
new plant, no automation Improvement
• Identified key factors
▪ Affected by impacting batch cycle time
Internal/External factors and performance
Mainly Internal Availability Performance Quality

▪ Current Capacity
Common Mistakes
At maximum
• Ignoring the impact of
▪ Focus bottlenecks on overall Maintenance Uptime Cycle Time Bottleneck Error Poka-Yoke
Improving efficiency and productivity
reducing cycle time
• Not considering the
importance of maintenance
and utility efficiency

Recommendations Operational Efficiency

Conclusion: Focus on improving operational efficiency and reducing batch
• No. of Machines: Maximize the usage of existing machines
cycle time through better maintenance, addressing bottlenecks, and
• Productivity: Enhance productivity through continuous improvement methods like Kaizen
optimizing existing processes
Short Term Recommendation
Identify bottlenecks
• Conduct a thorough analysis to find slow processes and bottleneck areas
Enhance Maintenance
• Strengthen preventive maintenance schedules to ensure maximum
machine availability

Long Term Recommendation

• Apply Kaizen and continuous improvement projects to gradually
improve efficiency
• Introduce new technologies or small system-based changes to improve
efficiency
© Management Development Institute, Gurgaon | 2024- 2025 128
H Frameworks and Cases

Unconventional Case 2: Retention Rate

Industry Chemical (HR)

Level Intermediate

Prompt: Your client is a manufacturer in a chemical industry and is facing low retention rate for junior lever engineers at your organization for last 3 years. Can you please
help your client to assess the root cause and provide some action plan.

Could you provide additional insights into the client's business? Yes, there are nearby companies, but they don't rival our stature. However, some
employees have opted to leave for these alternatives.
The client is a key player in manufacturing, handling internal sales and distribution
mainly in the B2B sector. What employee benefits and amenities are extended by the company?

Is this issue related to only to our client's operations, or is it prevalent across the The company provides a healthy work environment, job security, and annual
industry? performance assessments, all in accordance with industry norms.
Issue is related only to our client. Are there residential options proximal to the company, and does the company
facilitate transportation or lodging for its workforce?
Do we have any details of the organizational structure of the company?
The organizational structure comprises seven hierarchical levels, ranging from L1 to No, the company does not offer transportation or lodging services. The nearest
L7, with L1 denoting assistant managers. residential area is roughly 20 kilometers from the plant.

Are there any specific levels experiencing elevated turnover rates? Do neighboring enterprises offer similar amenities?

Notably, turnover is prominent at L1 & L2 levels. Yes they do. However, our evaluation underscores the significance of these factors
in employee’s decision-making processes.
What is the current turnover rate?
Approximately 50% The absence of transportation and lodging amenities might be a hindrance,
particularly for employees navigating shift work and commuting to a remote plant
Could you describe the work settings and schedules of departing employees? location.
Employees, particularly ground-level engineers at L1 & L2, operate in shift patterns Alright. Could you propose some actionable recommendations?
Where is the plant located?
We could explore implementing transportation services and adopting a rewards and
The plant is located approximately 35 Km. away from the city of Pune in the recognition framework, particularly targeted at L1 & L2 employees, to enhance
outskirts. engagement and retention.

Are there competing facilities or opportunities in the vicinity influencing turnover? Sounds good. We can close the case here.

© Management Development Institute, Gurgaon | 2024- 2025 129

H Frameworks and Cases

Unconventional Case 2: Summary

Prompt: Your client is a manufacturer in the chemical industry and is facing a low retention rate for junior-level engineers at your organization for the last 3
years. Can you please help your client to assess the root cause and provide some action plans?

Case Facts Interviewee Feedback Recommendations

• Problem Area: Employee What Went Well? Conclusion: The primary issues contributing to the high turnover rate are the plant's remote location and the
retention • Thorough understanding of lack of transportation and lodging amenities. Addressing these factors can help improve employee retention,
the client's business and particularly at the L1 & L2 levels
• Timeline: Last 3 years internal structure
Short Term Recommendation
• Affected by Internal/External • Identification of key factors Implement Transportation Services:
factors: Mainly Internal influencing employee • Provide shuttle services for employees commuting from Pune and nearby areas
turnover, such as location and • Ensure the service is reliable and covers multiple shifts to accommodate all employees
• Turnover Rate: Approximately lack of amenities
50% Lodging Facilities:
• Providing practical • Explore options for providing lodging or partnering with local accommodations to offer discounts for
• Organizational Structure: recommendations focusing on employees
Seven hierarchical levels (L1 to employee engagement and • Consider building or leasing a residential facility closer to the plant
L7, with L1 being assistant retention
managers) Long Term Recommendation
Common Mistakes Employee Engagement and Rewards:
• Affected Levels: Primarily L1 & • Assuming external factors are • Develop a rewards and recognition framework targeted at L1 & L2 employees
L2 (junior-level engineers) the main cause without • Conduct regular surveys to gather feedback and address concerns promptly
internal assessment • Organize team-building activities and professional development programs to enhance employee satisfaction
• Location: 35 km from Pune city,
on the outskirts • Overlooking the impact of Competitive Analysis:
transportation and lodging • Continuously monitor benefits and amenities offered by competing employers
• Competing Facilities: Nearby amenities on employee • Ensure the company's offerings remain competitive to prevent employees from leaving for similar
companies offering similar satisfaction opportunities
amenities
• Neglecting the importance of
• Employee Benefits: Healthy targeted engagement
work environment, job security, strategies for junior-level Metrics to Monitor
annual performance employees
assessments 1. Employee turnover rate, especially at L1 & L2 levels
2. Employee satisfaction scores from regular surveys
• Residential Options: 20 km 3. Utilization rates of transportation and lodging services
from the plant, no company-
provided transportation or
lodging services

© Management Development Institute, Gurgaon | 2024- 2025 130

H Frameworks and Cases

Unconventional Case 3: HR Service Provider

Industry Chemical (HR)

Level Intermediate

Prompt: Raising concerns about the viability of their existing business model, a back-end human resources service provider is experiencing a marked decrease in
profitability. You have been approached to identify the root causes and recommend potential improvements.

From what I gather, our client is experiencing a decline in profitability and is Okay. Given this information, I would like to split the profits into Revenue and Cost.
seeking our guidance to identify the causes and recommend solutions. To begin, I Revenue: #Clients X #Employees per Client X Revenue per employee
need to ask some initial questions about their operations. What specific activities
does their business engage in Cost: Fixed Cost – Salaries, IT set-up cost, Data storage cost, Maintenance cost,
and other indirect costs. Also, Variable cost – Processing cost.
Large corporations typically outsource their backend HR functions such as
attendance tracking, leave management, and reimbursements to specialized firms. On the revenue side, there were no changes observed. Although many projects
However, tasks like recruitment and performance management are generally were concluding and new ones were commencing, the overall costs continued to
handled internally and are not outsourced.. rise.

Who are our typical clients? Salaries, IT set-up costs and data storage costs are the significant buckets; have
these costs increased recently?
Banking, Financial Service players, consulting firms, etc
What do you think about how these costs behave in the project lifespan of 5-7
Are these services offered for the long term? Are there any other differentiated years?
solutions that we offer?
The salary decreases as productivity improves (due to a learning curve) in such
Yes, typically for 5-7 years and solutions are the same across clients. back-end operations leading to lesser manpower per project. Also, set up costs are
for the first time and not later. And data storage costs keep increasing as the
All right. What do you mean by profitability - Profits/Sales or Profits? volume of data stored cumulatively keeps increasing.
Profitability is profit/Sales, for this case, let’s consider it as profits
Set-up costs and salaries are high initially and drop over the project's life. The
Are we in losses, or is it just a drop? What is the quantum? revenue per employee is increasing due to inflation, and data storage cost is rising.
Salaries are the major cost head – 70% of the project.
The profitability has dropped from 28% to 22%.
Revenue and cost are connected. A lot of new projects are getting launched, and
Is this drop in profitability across all projects or in specific verticals? large old projects are in their final stage is the problem. As the profitability in a
year is a weighted average of individual projects with their respective profitability
It is measured as an aggregate.
curves, the proportion of new projects with low profitability is greater than the
Are competitors facing a similar problem? number of old projects with high profitability leading to an overall drop in
profitability in the current year
What is the pricing mechanism?
Price per employee basis @ INR 400 for a year and a yearly increase which
matches the inflation rate
© Management Development Institute, Gurgaon | 2024- 2025 131
H Frameworks and Cases

Unconventional Case 3*: HR Service Provider

Industry Chemical (HR)

Level Intermediate

Prompt: A back-end HR service provider has a dip in profitability. You have been approached to find the problem and suggest changes.

Yes, that’s correct. Can you provide some reasonable recommendations on the
same?
1. Separate KPIs for new and old projects
2. The client should look to extend all the projects that are in the last year since
profitability is highest in the final year of the project. And the extension would
ensure high profitability from the same project.
Sounds good. That’s all about the case

© Management Development Institute, Gurgaon | 2024- 2025 132

H Frameworks and Cases

Unconventional Case 3: Summary

Prompt: Raising concerns about the viability of their existing business model, a back-end human resources service provider is experiencing a marked
decrease in profitability. You have been approached to identify the root causes and recommend potential improvements.

Case Facts Interviewee Feedback Recommendations

• Problem Area: Profitability What Went Well? Conclusion: The primary issue contributing to the profitability decline is the rising cost structure, particularly
Decline • Identified specific cost in salaries, IT set-up, and data storage, combined with the impact of project lifecycle stages on overall
components contributing to profitability
• Timeline: Last 3 years increased expenses
Short Term Recommendation
• Affected by Internal/External • Connected revenue stability • Separate KPIs:
factors: Both with rising costs to pinpoint • Implement separate KPIs for new and old projects to better manage and track profitability
profitability issues • Focus on reducing costs in new projects through improved efficiency and cost control measures
• Profitability Trend: Dropped • Extend Project Duration:
from 28% to 22% • Suggested practical solutions • Extend the duration of projects in their final year where profitability is highest
targeting both new and old • This extension ensures continued high profitability from these projects
• Revenue Trend: No changes projects
observed, stable pricing at INR Long Term Recommendation
400 per employee per year Common Mistakes • Cost Management:
• Not considering the learning • Continuously monitor and manage salary, IT set-up, and data storage costs
• Cost Trend: Increased curve impact on salary costs • Explore cost-saving technologies and strategies to reduce long-term expenses
• Pricing Strategy:
• Service Duration: Typically 5-7 • Ignoring the relationship • Review and adjust pricing mechanisms to ensure they cover rising costs while remaining
years between project stages and competitive
profitability • Consider tiered pricing or value-added services to enhance revenue streams
Cost Structure:
• Fixed Costs: Salaries, IT set-up • Overlooking the role of data
costs, Data storage costs, storage costs increasing over
Maintenance costs, Other indirect time Metrics to Monitor
costs
• Variable Costs: Processing
1. Profitability percentage across different project stages
costs
2. Cost trends in salaries, IT set-up, and data storage
• Major Cost Heads: Salaries
3. Client satisfaction and retention rates
(70% of project cost), IT set-up,
and Data storage costs

• Service Model: Long-term

projects, same solutions across
clients

© Management Development Institute, Gurgaon | 2024- 2025 133

01 Consulting Primer

02 Business Concepts and Ideas

03 Frameworks and Cases

04 Guesstimates
H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Approaching Guesstimates
The process of solving a guesstimate during an interview entails employing a systematic approach to arrive at the solution, making logical
assumptions, conducting rough calculations, and effectively communicating the entire process.

Solving Guesstimates

These approaches are

Pyramid Approach Supply Demand Approach similar, choosing between
them is based on level of
comfort

Top-Down Bottom-Up Supply Side Demand Side

• Start with the • Start from the • Involves making • Demand side As a rule of thumb, the
broadest possible bottom – some low an estimation of estimations usually bottom up approach can
universe level statistics such the supply of a require a be used when consistent
as ‘Revenue per product or service population side lower level metrics can be
• Apply filters to customer’ analysis established.
narrow down the • Based on available
universe • Build up to the data & reasonable • Constraints to be
universe by assumptions put on factors Do not stick to one
approach particularly,
• Keep applying a applying relevant driving practice all types as they
set of filters to numbers • Constraints to be demand/growth are helpful in case
arrive at the put on factors of interviews as well
solution production

Tip: Segmentation is an important part of guesstimates. Keep these types of segmentation handy in case needed.
Demographics (Age, Sex, Income, Ethnicity etc.)
Psychographics (Attitudes, Behaviours, Values)
Geography (City/Country/Continent, Urban vs. Rural etc.)

© Management Development Institute, Gurgaon | 2024- 2025 135

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Let us solve a Basic Guesstimate!

Prompt: "How many tennis balls can fit inside a school bus?"

Step 1 Step 2 Step 3 Step 4 Step 5

Understand Question Make Assumptions Break Problem Down Use Constraints Apply formula

▪ The first step is carefully ▪ Guesstimates often ▪ Divide the problem ▪ To limit the ▪ Use basic operations –
read & understand the require you to make into smaller, more guesstimate, use the Addition, subtraction,
guesstimate question educated guesses or manageable parts constraint present in multiplication, division
assumptions the problem to get to the required
▪ Ask clarifying questions ▪ Intuitively you can
number
to get a better ▪ Make reasonable think of smaller ▪ It can be volume,
understanding assumptions and state components Length, mass etc.
them

“Tennis Balls” “Both the School bus “Dimensions” “Volume constraint” “Division Formula”
& Tennis balls are School Bus: Vol. School bus=
“School Bus” School Bus:
standard Size” Volume No. of tennis balls *
Length = 10 m Volume of 1 tennis
= L*B*H
Width = 5 m ball
= 10*5*7
Height = 7 m
= 350m3 350 = N*0.0005
Tennis ball:
Tennis ball: N = 7,00,000
Diameter: 0.1 m Volume
=(4/3)*3.14*r3
=0.0005m3

© Management Development Institute, Gurgaon | 2024- 2025 136

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Example for Supply & Demand Side

Prompt: “A car manufacturer is planning to launch a new electric vehicle in a country with a population of around 50 million people. The EV is
targeted at the mid-range segment and offers competitive features at an affordable price. Estimate the potential demand and supply for the new
electric vehicle in the target market.”

Demand Side Supply Side

Total Demand Total Supply

Estimated = Add. Mkt + Add Mkt*GR Estimated =Mon. Prod.*Mon.
Demand = 100k + 100*5% Supply =1280*12
= 105k =15,360
Monthly Production
Addressable Market =(Prod. Hours * PLs)
Monthly No. of
Addressable Growth = Market Size * Share / Cycle time
Production Months
Market Rate = 1 Mn * 10% =(320*8)/2
= 100K =1280
Prod. Hours
Market Size Production Production
Cycle Time =Wkg Days *Shifts *
Market = Population * Penetration Hours Lines Hours/Shift
Market Size
Share = 50 Mn * 2% = 20*2*8
= 1 Mn =320

Working
Shifts Hours/Shift
Penetration Days
Population
Rate

*Assumptions (Give Reasons) *Assumptions (Give Reasons)

Penetration – 2% Penetration – 2%
Market Share – 10% (First Year) Market Share – 10% (First Year)
Growth Rate – 5% (First Year) Growth Rate – 5% (First Year)

© Management Development Institute, Gurgaon | 2024- 2025 137

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Fact Sheet

General Statistics Segmentation Geometry Formula

Population (No.) Rural-Urban Gender Marital Status Perimeter

Total 1.5 Bn Rural 63% Male 52% Married 48% Square 4 * Side

Delhi 33 Mn Urban 37% Female 48% Unmarried 52% Rectangle 2*(Length+ Breadth)

21 Mn Triangle Sum of Sides

Mumbai Age Groups Area Distribution Income Distribution
Circle 2 * 3.14 * Radius
Kolkata 14 Mn 0-14 25% Land 91% High 2%
Bangalore 8.5 Mn Water 9% Area
15-24 20%
Upper Middle 25%
3.3 Mn Forest 21% Square Side2
Lucknow 25-34 17%
Lower Middle 37% Rectangle Length * Breadth
Chennai 5 Mn 35-44 15% Internet Penetration
Low 25% Triangle (1/2)* Base* Height
45-54 12% Urban 47%
Area (in Km2) Circle 3.14 * Radius2
55+ 11% Rural 53% BPL 11%
Total (‘000) 3,300 Volume
Delhi 1,480 Miscellaneous Statistics Cube Side3
(Overall India)
Mumbai 600 Sphere (4/3) * 3.14 * Radius3
Kolkata 200 Internet Penetration 52% Median Age of Population 28 Cylinder 3.14*Radius²*Height
Bangalore 740 Mobile Penetration 78% Population Growth Rate .86%
Misc.
Lucknow 630 Smartphone Penetration 71% Life Expectancy 72 Pythagoras a2 + b2 = c2
Chennai 425 5G Adoption 52% Population Density 480 Rhombus (A) ½ * D1 * D2

Note: The provided data is only for India.

These data-points are approximate figures for the purpose of guestimates and are valid as of 2024.
© Management Development Institute, Gurgaon | 2024- 2025 138
H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 1: Fuel Consumption

Prompt: Estimate the quantity of petrol used per day (in litre) for transportation in Delhi

Approach
Demand Side Population of Population of Delhi
Delhi 15 Mn

Methodology (Average Household Size – 5)

1. Calculate the Number of
Household = Population/Avg Size
households Total
= 15 Mn/5
Households = 3 Mn
2. Calculate Vehicles per
household
(Division Basis Income)
3. Calculate the
consumption by each Upper Class – 150K
Upper Class Middle Class Lower Class Poor Middle Class – 750K
vehicle. (5%) (25%) (50%) (20%) Lower Class – 1500K
4. Scale up the consumption Poor – 600K
to the entire population

2W - 1.5 2W - 1 2W - 0.5 2W - 0 (Average No. of Vehicles/household)

Assumptions 4W - 1.5 4W - 0.75 4W - 0 4W - 0
▪ Diesel and CNG is majorly
used by public transport
and commercial vehicle
(busses, vans, and trucks) 2W – 225K 2W - 750K 2W - 750K 2W - 0
(Total No. of Vehicles)
4W - 225K 4W - 562.5K 4W - 0 4W - 0
▪ Average distance travelled
by each vehicle (per day)
20 km
Distance by 2W = 20 * (750K + 750K + 225k) = 34,500K Total Fuel = 2,265K Litres
▪ Mileage (in km/litre)
Litres used by 2W = 34,500K / 50 = 690K (Assuming 20% is Diesel)
2 Wheeler = 50
4 Wheeler = 10 Distance by 4W = 20 * (562.5K + 225k) = 15,750K
Litres used by 4W = 15,750K / 10 = 1,575K Solution: Total Petrol used = 1,812K Litres

© Management Development Institute, Gurgaon | 2024- 2025 139

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 2: Maruti Suzuki Cars

Prompt: Estimate the number of Maruti Suzuki Cars in India

Approach
Top Down Population of India
Population of
India 1500 Mn

Methodology (Average Household Size – 5)

1. Calculate the Number of
Household = Population/Avg Size
households Total = 1500 Mn/5
2. Segment the population
Households = 300 Mn
on the basis of income
(Division Basis Income)
3. Calculate number of 4-
wheelers per household Upper Class – 15 Mn
Upper Class Middle Class Lower Class Poor
Middle Class – 45 Mn
4. Calculate the total (5%) (15%) (50%) (30%) Lower Class – 150 Mn
number of 4-wheelers. Poor – 90 Mn
5. Calculate the total
number of Maruti cars
4W - 1.5 4W - 0.75 4W - 0 4W - 0 (Average No. of Vehicles/household)

Assumptions
▪ Average household size in
the country = 5 4W – 22.5 Mn 4W – 33 Mn 4W - 0 4W - 0 (Total No. of 4W Vehicles)
▪ Maruti cars have a 50%
market share over the
years
▪ Lower Class and Poor do
4W – 11 Mn 4W – 16.5 Mn 4W - 0 4W - 0 Maruti Cars – 50% share
not own any cars
▪ Only passenger vehicles
are considered Solution: Maruti Cars = 27.5 Mn

© Management Development Institute, Gurgaon | 2024- 2025 140

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 3: Mobile recharge

Prompt: Estimate the mobile recharge market size in India

Approach
Top Down Population
Average monthly mobile recharge (1500 Mn)
(INR)
Methodology
Rich Middle Lower
1. Calculation of total Mobile
phones in India Urban 200 100 70 No. of Households
(1500/5 =300Mn)
2. Use economic split Rural 100 70 50

3. Use average mobile

recharge Urban Rural
(40%) (60%)
Assumptions (120 Mn) (180 Mn)

▪ All mobile phones are

active
Lower class Middle class Rich Lower class Middle class Rich
▪ Average mobile (40%) (40 %) (20%) (60%) (35 %) (5%)
phones/household (48 Mn) (48 Mn) (24 Mn) (108 Mn) (63 Mn) (9 Mn)
▪ All mobile phones have
single sim
Mobile Mobile
Mobile Mobile Mobile Mobile
phones/household = phones/household =
phones/household = 1 phones/household = 3 phones/household = 4 phones/household = 2
0.5 1.5

Total mobile Total mobile Total mobile Total mobile Total mobile Total mobile
recharge/month = recharge/month = recharge/month = recharge/month = recharge/month = recharge/month =
1*48*70 = INR 3360 3*48*100 = INR 14400 4*24*200 = INR 19200 0.5*108*50 = INR 2700 1.5*63*70 = INR 6615 2*9*100 = INR 1800
Mn Mn Mn Mn Mn Mn

Total yearly mobile recharge market size =

Solution: Mobile recharge market size = INR 5,76,900 Mn
12*(3360+14400+19200+2700+6615+1800) = 5,76,900 Mn
© Management Development Institute, Gurgaon | 2024- 2025 141
H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 4: Cars on Mumbai Sea Link

Prompt: Estimate the number of cars using Bandra-Worli Sea Link in Bombay in a day

Approach
Supply Side
Total Time
Methodology (24 Hours)
1. Segment day hours by
traffic load and identify a
bottleneck in the system
– toll booth in this case Low Load Medium Load High Load
2. Estimate the cars per unit (6 Hours) (12 Hours) (6 Hours)
time in that bottleneck
3. Bottom-Up calculation to
arrive at total cars that
has passed through the
bottle neck – toll booth 0.5 * Capacity 1* Capacity 2 * Capacity Toll Booth Usage

Assumptions
▪ Number of toll lanes
8
0.5 *60 *5 *8 *6 1 *60 *5 *8 *12 2 *60 *5 *8 *6 Total Cars in each traffic load type
▪ Bottleneck =7,200 =28,800 =28,800 Hours*Lanes*Capacity/Hour*Multi.
Toll Lanes
▪ Average Toll Lane Capacity
per minute: 5 cars
▪ 12 hours of medium Total Cars in a day
traffic load = 7,200 + 28,800 + 28,800
= 64,800
▪ 6 hours each of high load
and low load in a day Solution: No. of Cars = 64,800

© Management Development Institute, Gurgaon | 2024- 2025 142

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 5: Metro Ridership

Prompt: Estimate the number of people travelling in Metro in Delhi daily

Approach
Bottom Up Coaches
Total Coaches =Operating Hours*Freq.*Coaches
= 20*30*3200
Methodology =1.92 Mn
1. Calculate the No. of
operating hours in a
metro Coaches
Frequency of Metro =lanes *Stations *Avg Coaches
2. Segment occupancy of Operating Hours Coaches/Metro
(No. of Metro's/hour) =10*40*8
metro basis hours
(rush/normal)
3. Adjust for occupancy
Metro lanes = 2 per route
No. of Metro Average No. of
No. of Stations = 10 lanes
Assumptions lanes Coaches
▪ Number of metro routes
5 (Maximum Capacity of a coach = 200)

▪ Number of Stations: 40
Occupancy Weighted Avg. Occupancy
▪ Average # of coaches/metro =(1.2 + 4 + 4.2 + 4 + 2.4)/20
8 = 80%
▪ Operating Hours: 20
5 - 9PM
▪ Frequency: 1 Metro/2 min 5 - 7AM 7 - 11AM 11 - 5PM 9 - 1AM
4 hours
2 hours (60%) 4 hours (100%) 6 hours (70%) 4 hours (60%)
(100%)

Daily Ridership = Avg. occupancy * Max Capacity * Coaches

= 1.92 * 200 * 80%
= 307.2 Mn Solution: Daily Ridership = 307.2 Mn

© Management Development Institute, Gurgaon | 2024- 2025 143

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 6: Lakes in the World

Prompt: Estimate the number of fresh water lakes in the world

Approach
Radius of Earth= 6,400 Km = 26 *100 Km
Top down
Surface Area of Earth = 4 * 3.14 * 26 * 100 * 26 * 100 = 510 Mn Km2

Methodology
Surface are
1. Calculate the surface area of Earth
of earth
2. Divide the area into
Water & Land Water Land Water = 357.5 Mn Km2
3. Separate fresh water (70%) (30%)
from salt water
4. Remove glaciers from Fresh Water = 7 Mn Km2
sources of fresh water Salt Water - Oceans Fresh Water
(98%) (2%)
5. Divide by average size of
lake
R, P, L = 0.14 Mn Km2
Assumptions Glaciers Rivers, Ponds, Lake
(98%) (2%)
▪ Assuming Earth to be a
perfect sphere
▪ Average size of a lake is Rivers Lakes Ponds Lakes= 14,000 Km2
100m * 100m (85%) (10%) (5%)
▪ Most fresh water is in
terms of Glaciers
Total No. of lakes = Area of Lakes / Size of 1 lake
= 14,00,000 Lakes

Solution: Total Lakes = 14 Lacs

© Management Development Institute, Gurgaon | 2024- 2025 144

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 7: AC working hours

Prompt: Estimate the average number of hours AC are run in Delhi over a year

Approach
Demand Side

Methodology AC Used
1. Divide the months in
terms of seasons Summer Months : March - July
2. Average hours that the Total 153 days
AC is working Autumn Months : Aug – Oct
Summer Autumn/Rainy Winter Total 91 days
3. Consolidate
Winter Months : Nov – Feb
Total 120 days
Assumptions
(Split by Average hours/day)
▪ Consideration of a middle
income household Morning - 2 Morning - 0 Morning - 0
Afternoon/Evening -1 Afternoon/Evening - 0 Afternoon/Evening - 0 Total hours per segment of day
▪ Division of months done Night - 4 Night - 3 Night - 0
basis judgement

Hours worked = No. of days * Average Hours/day

= 153 * 7 + 91 * 3 + 120 * 0
= 1,344 hours

Solution: AC Working hour = 1344 hours

© Management Development Institute, Gurgaon | 2024- 2025 145

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 8: Length of roads in Delhi

Prompt: Estimate the total length of roads in Delhi

Approach
Top Down

Delhi's Region
Methodology
1. Calculate Area of Delhi
2. Divide the area basis its Roads
Residential Commercial Forest/Agri Others
usage Network
(30%) (25%) (10%) (15%)
(20%)
3. Divide the roads then into
usage (Split by Road Maintenance)
Municipal
4. Assume approx. width of State Roads Central Govt
Roads
roads (50%) (15%)
(35%)
5. Divide the two

Assumptions Main Roads Highways Other Interconnected Split based on experience

(30%) (20%) (50%)
▪ Area of Delhi –1800 Km2
▪ Width of road based on
experience Estimated Avg. Width Total
Municipal – 5m Area of Road Length
Main roads - 15m Municipal 125 Km2 5m 25,000 Km
Highways – 20m
Other Ics – 10m Main 50 Km2 15m 3,000 Km
Central Govt – 25m
Highways 35 Km2 20m 1,750 Km
Other IC 85 Km2 10m 8,500 Km
Central Govt 50 Km2 25m 2,000 Km
Solution: Length of Roads = 40,250 Km

© Management Development Institute, Gurgaon | 2024- 2025 146

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 9: Cold Drink Consumption

Prompt: Estimate the consumption of cold drink in IPL season

Approach
Average Capacity of IPL Stadium = 50,000, No. Of Matches = 74
Top Down

Total no. of people attending Cold Drink Consumption

Methodology
1. Find the no. Of people
attending IPL matches. IPL Stadium Avg. Consumption / person
2. Segregate between
afternoon and evening
matches.
3. Based on average Afternoon
Evening Matches Afternoon Evening
consumption/person, Matches
(85%) (0.5l) (0.3l)
calculate the total (65%)
consumption.

Afternoon Matches Total Consumption = Consumption(Afternoon)

Assumptions No. Of people = Occupancy Rate * No + Consumption (Evening)
of Matches * Average Capacity = (Avg. Consumption/person * No of people)
▪ All people attending a No of people = .65*18*50000 = 5.85L + Avg. Consumption/person * No of people)
match consume a cold = 5.85L*0.5l + 23.8L*0.3L = 10.065 lakh
drink Evening Matches Liters
▪ Average Occupancy of No. Of people = Occupancy Rate *
Stadium No of Matches * Average Capacity
No of people = .85*56*50000 = 23.8L
▪ Consumption of Cold
drinks is increased during Total No. Of People Attending =
Afternoon 5.85+23.8 = 29.65L

Solution: Total Cold Drink Consumption =

10.065 lakh Liters

© Management Development Institute, Gurgaon | 2024- 2025 147

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 10: T-shirts Sold on Amazon per Day

Prompt: How many t-shirts do you think Amazon is selling in India per day?

Approach
Population of India = 1500 Mn
Top down

Internet Penetration = 0.4*1500

Methodology = 600 Mn
(40%)
1. Segment by gender
considering different
demand = 0.5*500
Ecommerce Shoppers = 300 Mn
2. Further break down into (50%)
frequent and occasional
shoppers rate of t-shirt
purchase per year = 0.3*300
3. Bottom up estimation for Fashion Shoppers = 90 Mn
total t-shirts sold in a (30%)
year
= 0.5*90
Assumptions Men Women = 45 Mn
▪ E-commerce penetration =
(50%) (50%)
50% of Internet
Penetration
Frequent Occasional Frequent Occasional M (FS) : 9 Mn *5 = 45 Mn
▪ Fashion Shoppers on Shoppers Shoppers Shoppers Shoppers M (OS) : 36 Mn *3 = 108 Mn
Ecommerce = 30%
(20%) (80%) (20%) (80%) F (FS) : 9 Mn *7 = 63 Mn
▪ Frequent M – 5 T-shirt F (OS) : 36Mn *4 = 144 Mn
Frequent F – 7 T-shirt
Total T-shirts = 45 + 108 + 63 + 144 = 360 Mn
▪ Occasional M – 3 T-shirt Amazon Market Share = 30%
Occasional F – 4 T-shirt
Total Sales/Year = 108 Mn
Total Sales/Day = 108 Mn / 365 = 295K Solution: Total Sales/Day = 295K

© Management Development Institute, Gurgaon | 2024- 2025 148

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 11: Size of Tyre Industry

Prompt: Estimate the size of the tyre industry, particularly SUV in India in 2025.

Approach Population of India = 1500 Mn

Demand Side Average Household Family Size = 5

Methodology = 1500 Mn / 5
Total
1. Divide households based Households = 300 Mn
on income stream
2. Within High income, = 300 Mn * 10%
divide basis the No. of Below Poverty Low Income Middle Income High Income = 30 Mn
SUVs in a household (15%) (40%) (35%) (10%)
3. Divide basis current on
ground + New SUVs
4. Multiple by growth rate One SUV Two SUV Multiple SUVs No SUV
for future years (50%) (30%) (10%) (10%)
5. Divide by average
number of tires per SUV
Based on above analysis –
Total SUVs on ground = 30 Mn * (0.5*1 + 0.3*2 + 0.1*3) = 42 Mn
Assumptions
New SUVs = Total SUVs on ground/ Average Life = 42 Mn/15 = 2.8 Mn
▪ No replacement tyre being As of 2024, 42 Mn SUVs & 2.8 Mn new SUVs = 44.8 Mn
considered
As of 2025, Total SUVs = 54.2 Mn ( 44.8 * 1.1 * 1.1)
▪ Average life of SUV is 15
years
Each SUV has 5 tyres (4 tyres + extra)
▪ Assume growth rate of Total = 54.2 Mn * 5 = 271 Mn Tyres
tyre industry as 10%
▪ Each SUV has 5 tyre
Solution: Total No. of tyres = 271 Mn

© Management Development Institute, Gurgaon | 2024- 2025 149

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 12: Sports Shoes Market

Prompt: Estimate the annual size of sports shoes in India

Approach
Population of India = 1500 Mn
Demand Side

Methodology India India India

1. Find relevant population
by division in terms of
urban/rural, gender & age Male Female
Rural Urban Below 15 15-30 30-45 45-60 60+
2. Use the weighted average (70%) (30%) (50%) (50%) (25%) (25%) (20%) (20%) (10%)
method
3. Find weighted average Market Market Market Market Market
Market Market Market Market
price of a shoe by market Available Available Available Available Available
Available Available Available Available
variants (40%) (80%) (60%) (40%) (2%)
(70%) (100%) (80%) (30%)
4. Divide the two

Weighted Average: ~80% Weighted Average: ~55% Weighted Average: ~60%

Assumptions
Total Relevant Population = 1500 Mn * 0.8 * 0.55 * 0.6 = 396 Mn
▪ Sports shoes are generally
used by athletes and by
Market Spent
citizen for going to a
walk/job or day to day
purpose Mid Level Total Market Value = 396 Mn * 960
Budget (60%) Premium (10%)
(30%) = Rs. 380 Billion
▪ Average prices of shoes in
a segment Average Price: Average Price: Average Price:
500 1200 3000

Weighted Average Price: Rs.960

Solution: Total Market Size = Rs. 380 Bn

© Management Development Institute, Gurgaon | 2024- 2025 150

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 13: WhatsApp Messages

Prompt: Estimate the total number of WhatsApp messages sent in India per day

Approach
Total Number of Smartphone users in India Total Number of WA messages/Day
Top Down

Methodology Population
(1500 Mn) No. of SP Users
1. Calculation of total
smartphone users in India
2. Use economic split No. of Households
(1500/5 =300Mn) 0-15 years 15-40 years 40-60 years 60+ years
3. Age split for smartphone (0%) (70%) (20%) (10%)
user
Low Class Middle Class Upper Class
4. Assume usage for each (30%) (60%) (10%) Split basis usage of WhatsApp
customer (90 Mn) (180 Mn) (30 Mn) (Denotes: Average message/day)
5. Weighted average on High Med Low
Average Average Average
number of messages Smartphone/House Smartphone/House Smartphone/House 15-40 60% (60) 25% (30) 15% (20)
hold : 1 hold : 4 hold : 5
Assumptions 40-60 30% (30) 40% (20) 30% (10)

▪ All smartphone users are 90*1 = 90 Mn 180*4 = 720 Mn 30 * 5 = 180 Mn 60+ 10% (25) 30% (15) 60% (5)
using WhatsApp
▪ Average Total = 990 Mn *
Smartphone/Household
(0.7 * (0.6*60+0.25*30+0.15*20) +
Total = 90 + 720 + 180 = 990 Mn (0.2 * (0.3*30+0.4*20+0.3*10) +
(0.1 * (0.1*25+0.3*15+0.60*5))
Total = 36,481 Mn

Solution: WA messages/day = 36,481 Mn

© Management Development Institute, Gurgaon | 2024- 2025 151

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 14: People flying in/out from Delhi

Prompt: Estimate the number of people flying in/out from Delhi in a day

Approach
Total Number of Flights in Delhi Total No. of People flying in/out
Top Down

Methodology Type of Bookings

Delhi Airport
1. Calculate total number of
flights in Delhi
2. Use efficiency & hour wise Economy Economy
Business
split to get to total Terminal 1 Terminal 2 Terminal 3 Class Plus
number (3 runways) (3 runways) (6 runways)
3. Find average capacity by 7 column*20 rows 4 column*15 row
max capacity * occupancy Average time for take off/landing = 2 mins =20 passengers
= 140 passengers = 60 passengers
Total 30 Planes can land or take off in an hour
4. Divide the two

Assumptions % Efficiency of
Maximum Passengers/plane = 220
Airport
▪ Number of runways in Average occupancy of plane = 80%
Delhi airport Total passengers/plane = 180
▪ Average time – 2 mins 11PM - 6AM 6AM - 12PM 12PM - 5PM 5PM - 11PM
▪ % efficiency split/hour
(70%) (90%) (100%) (100%) People flying in/out = Passengers/flight * No. of
Flights = 180 * 7668 = 1.38Mn
▪ Occupancy rate of plane =
80%
Total = Hours * % Efficiency * Planes * Runway

= 7*0.7*30*12 + 6*0.9*30*12 + 11*1*30*12

= 7,668 Flights
Solution: People Flying in/out = 1.38 Mn

© Management Development Institute, Gurgaon | 2024- 2025 152

H
Shape

H Guess Estimates
Description automatically generated with low
confidence

Guesstimate 15: Sauces sold in Europe

Prompt: Estimate the total revenue generated from consumption of sauce in Europe

Approach
Top Down Population of Europe – 750 Million
1 Kg of Tomato Sauce = 75 Servings
[1Kg of sauce can be used by a family of 5 for 15 servings (Assumption based on own experience)]
Methodology
1. Divide population basis
eating routine of a day Meals
2. Attach values of Sauce
usage basis experience
3. Calculate servings using 1 Breakfast Lunch Dinner General Snacks
kg of sauce (90%) (90%) (60%) (50%)
4. Consumption * Average (Sauce usage : High) (Sauce usage : Low) (Sauce usage : Low) (Sauce usage : High)
Price

50% consume 10% consume 10% consume 70% consume

Assumptions tomato sauce tomato sauce tomato sauce tomato sauce
▪ Considering on tomato
sauce for the guesstimate Based on above analysis –
▪ Average price of sauce = Total servings per day
1.5 Euro/Kg = 750 Mn * (0.5*0.9 + 0.1*0.9 + 0.1*0.6 + 0.7*0.5)

Amount of Ketchup consumed in Kg = (750 Mn * 0.95)/75 Kg/day = 95 Mn Kg/Day

Consumption/month = 95 Mn Kg/day * 30 = 285 Mn Kg/Month
Annual Consumption = 3.42 Bn Kg/year

Annual Revenue = 3.42 Bn Kg/year * 1.5 Euro/Kg = 5.43 Bn Euros

Solution: Sauces Revenue = 5.43 Bn Euros

© Management Development Institute, Gurgaon | 2024- 2025 153

 All The Best!
For queries, suggestions & feedback, write to us at strategist@mdi.ac.in
Connect with us!
Instagram - Wikipedia Facebook - Free download and install on Windows | Microsoft Store