Facts & Figures
50%
20%
Middle Income
Low Income
30%
Population:
320 Million
Per Generation:
80 Million
Per Age Group:
4 Million
Life Expectancy:
80 yrs
Households:
100 Million
GDP:
20 Trillion
% of World GDP:
25%
Population:
8 Billion
Life Expectancy:
70 yrs
High Income
Key Questions
5 C’s =
Client, Company, Cost, Channels Competition
Core to Market
Core to Company
Profits and revenues for the last three years?
Market size, growth rate, and trends? (Ask for
Profitability by segment?
3 years worth of data)
Costs / margins?
Margins?
Market share?
Where is it in its lifecycle? (Emerging? Mature?
Declining?)
Customer segmentations?
Characteristics?
Customer segmentation(s)?
Changing needs?
Product differentiation?
Product mix?
Distribution channels?
Product differentiation?
Brand?
Industry drivers?
Industry changes?
Production capabilities / capacity?
Changes in technology?
Distribution channels?
Regulations?
WCS (What constitutes success?)
M&A? New players?
Which metric is used?”
Major players and market share?
Barriers to entry/exit?
Formulas
Net Income =
Revenues - Expenses
Breakeven Point in Units =
Fixed Costs / (Price - Variable Costs)
Breakeven Point in Price =
(Total Fixed Cost / Production Unit Volume) + Variable
Cost Per Unit
Profit Margin =
Net Income / Revenue
ROI =
Profit from Investment / Investment Cost
Compound Annual Growth Rate =
Final Value / Initial Value. Raise result to the power of 1
divided by the number of years
Contribution Margin =
Revenue / Unit - Variable Cost / Unit
Ivy Method
Summarize
Question
Verify
Objective
Ask
Questions
Label Case
& Structure Arg.
State
Hypothesis
Percentages, Fractions and Decimals
Percent
Fraction
Decimal
5%
1 / 20
.05
8.33%
1 / 12
. 083
10%
1 / 10
.1
12.50%
1/8
.125
16.67%
1/6
.167
20%
1/5
.2
25%
1/4
.25
33.33%
1/3
.333
37.50%
3/8
.375
40%
2/5
.4
50%
1/2
.5
60%
3/5
.6
62.50%
5/8
.625
66.67%
2/3
.667
75%
3/4
.75
80%
4/5
.8
83.33%
5/6
.833
87.50%
7/8
.875
Case Types
1
2
3
4
+
Profits & Loss:
Revenues: What are the major revenue streams, and what percentage of the total revenue does each stream represent? Does
anything seem unusual in the balance of percentages? Have the percentages changed lately? If so, why?
Costs: Any major shifts in costs? Do any costs seem out of line?If we benchmarked our costs against our competitors’ costs,
what would we find?
Entering a New Market
Can involve mergers, acquisitions, joint ventures, starting a new business, or the development of a new product.
M&A: The two most important factors about a merger are whether it increases shareholder value and whether the two cultures
will mesh well. Cultural mismatch is the biggest reason mergers fail or don’t live up to their potential.
Pricing
Investigate the company and its objective, learn about the product or service and the competition, and then pick a pricing
strategy.
Competitive Analysis
Cost-based Pricing
Price-based Costing
Growing and Increasing Sales
(1) Learn about the company and its size, resources, and products.
(2) Investigate the industry: Is it growing and how is the client growing compared with the industry? Are the client’s prices in line
with its competitors?
Additional Scenario Types
Developing a New Product
Starting a New Business
Competitive Response
Turnarounds
Cutting Costs
“If” Scenarios
References
Marc P. Cosentino. “Case In Point 10th Edition.” iBooks. https://itunes.apple.com/us/book/case-in-point-10th-edition/
id1410410697?mt=11