FRAMEWORKS

Question 1

PROFIT AND LOSS

Answer 1

1. external factors
2. revenue
   volume sold
   price
3. costs
   fixed costs
   variable costs
4. market / industry

Question 2

PROCESS OPTIMISATION

Answer 2

1. current process
   eliminate
   reduce costs
   bring earlier
   change quality
   increase speed
2. estimate gains

Question 3

GROW A BUSINESS

Answer 3

1. grow the core business
   grow within current segmentations (acquire more customers, increase customer spend)
   grow existing segmentations (new geographies, new products)
2. grow outside the business
   sell new products
   get into new businesses (expansion)

BCG Matrix - grow profit by maximise my your share of the fastest growing market share

Question 4

COST REDUCTION

Answer 4

1. reduce need for item
   eliminate entirely
2. meet need with less resources
   reduce service level
   improve productivity
   eliminate waste
3. reduce cost of resources
   cheaper alternatives
   renegotiate prices

Question 5

LAUNCH NEW PRODUCT

Answer 5

1. market
   size, growth & margins
   competition
2. choose customer segmentation
   customer needs, market drivers
   does the product meet this?
3. decide strategy
   price, distribution, brand & advertising
   mitigate risks
4. execute

Question 6

ENTERING A NEW MARKET

Answer 6

1. market opportunity
   market size, growth, margins & trends
2. potential market share
   competitors, market drivers
   customer needs
   our offer
3. potential profits
   investment+running costs < revenue
4. capacities & risks (regulatory, environmental and reputational)

Question 7

NEW ACQUISITION
same industry

Answer 7

1. stand alone value of company
   future revenue/costs ; valuation multiple
   compare with purchase price
2. synergies
   revenue growth
   cost reduction
3. capabilities & risk

Question 8

PRICING A NEW PRODUCT

Answer 8

1. costs
   variable
   fixed
   investments
2. client willingness to pay
3. competition

must be at least : cost of additional unit/service + mark up to cover fixed/investment costs

Question 9

MAKE AN INVESTMENT

Answer 9

1. impact on cost
2. impact on revenue
3. implementation

when will we break even

Question 10

RESPOND TO A COMPETITIVE THREAT

Answer 10

1. potential impact on business
   segment affected
   potential loss
2. attractiveness of opportunity pursued by competitor
   size
   profitability
3. response
   nothing
   mitigate
   collaborate
   replicate
   realign / reduce prices

Question 11

CORE COMPANY QUESTIONS

Answer 11

1. profit
   revenue streams & percentages
   costs (fixed and variable)
2. customers
   segmentation
   needs
   profitability
3. brand
   status
   products
   market share, competitors
4. capacities
   distribution
   capital
   production
5. what constitutes success

Question 12

CORE MARKET / INDUSTRY QUESTIONS

Answer 12

1. market
   size, growth, margins - trends
   place in lifecycle
   changes / developments
   major drivers & competitors
2. who
   major players/brands
   products
   customers, segmentations
3. capabilities
   production - suppliers
   distribution
   barriers to entry / exit