Progress Report

MANAGEMENT & BUSINESS

CONSULTING ASSOCIATION

BOUTIQUE CONSULTING NIGHT

THE STEPS

Case ProblemProfitability

Framework

Market and

Competitor

Analysis

Actionable

Recommendation

3

Profitability Framework Market/Competitor Analysis Actionable Recommendation

Case Problem

CASE PROBLEM

5

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

Ghana’s capital city of Accra boasts about 500 internet cafes. Our client is

Busy Internet, the largest internet cafe in Accra and in Ghana. Busy Internet

provides three services (cyber café, copy center, internet service provider) to

premium elite clients. Recently, Busy Internet is experiencing a decline in

profit of $50,000 this past year (2013-14). The Managing Director of Busy

Internet, Ms. Sowah, has hired your consulting firm to assess the problems. In

addition to identifying the cause of declining profits, you also need to give

recommendations and assist them through the implementation process. How

would you go about this case?

CASE PROBLEM

6

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

Client: Busy Internet is the largest internet café in Accra and in Ghana

Service Offering: cyber café, copy center, internet service provider

Customer Segment: Caters to premium elite clients (emphasis on

quality, less price sensitive)

Problem: Declining in profits by $50,000 in 2013-14

Find the source of the problem

Provide an actionable recommendation

Profitability

Framework

PROFITABILITY FRAMEWORK

8

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

Problem: Declining in profits by $50,000 in 2013-14

Find the source of the problem

Provide an actionable recommendation

Is it a revenue problem, cost problem, or a combination?

If revenue, is it a decrease in volume of sales or a

decrease in price?

If cost, is it variable or fixed?

What are the overall trends in revenues and costs?

Questions

to Ask:

PROFITABILITY FRAMEWORK

9

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

Profit

Revenue

Cost

Price/Unit

Units Sold

Variable Costs

Fixed Costs

Units Produced

Cost/Unit

PROFITABILITY FRAMEWORK

10

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

Problem: Declining in profits by $50,000 in 2013-14

Find the source of the problem

Provide an actionable recommendation

Costs haven’t changed in the previous three years

Revenue has declined for copy center and cyber café

service

Majority of decline is in cyber café (10% decline)

80/20 rule

Key

insights:

Market and

Competitor

Analysis

MARKET/COMPETITOR ANALYSIS

Problem: Declining in profits by $50,000 in 2013-14

Investigate the source of the problem

Provide an actionable recommendation

MARKET SEGMENT ANALYSIS

Who are our targeted customer segments?

How is the overall market performing compared to us?

Any other changes in the market segment? (e.g. consumer

tastes and preferences)

Questions

to Ask:

12

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

MARKET/COMPETITOR ANALYSIS

Problem: Declining in profits by $50,000 in 2013-14

Investigate the source of the problem

Provide an actionable recommendation

COMPETITOR ANALYSIS

How concentrated is the market segment?

What do we know about our competitor behavior?

What are the best practices in our segment?

Questions

to Ask:

13

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

MARKET/COMPETITOR ANALYSIS

14

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

Problem: Declining in profits by $50,000 in 2013-14

Investigate the source of the problem

Provide an actionable recommendation

Client cyber café shrinking faster than the overall segment

(Busy Internet: 10%; Market: 5%)

One major competitor with stable revenue and market

share

Client copy center revenue decreasing despite growing

market

Many small entrants doing well

Key

insights:

Actionable

Recommendation

ACTIONABLE RECOMMENDATION

16

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

Problem: Declining in profits by $50,000 in 2013-14

Investigate the source of the problem

Provide an actionable recommendation

Accrue all information and analyze

Pinpoint the source(s) of the problem

Tailor recommendations based on client objective (restore

profitability) and client resources

Questions

to ask:

ACTIONABLE RECOMMENDATION

17

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

Problem: Declining in profits by $50,000 in 2013-14

Investigate the source of the problem

Provide an actionable recommendation

Info

Accrued

Busy Internet Revenue Market Trend Competitor Analysis

CYBER

CAFÉ

- Declined by $50,000

(10% decrease from

previous year)

- Has only began

shrinking this past

year by 5%

- Projected to

stabilize by 2016

- One major competitor

Mega Internet that has

maintained market

share and annual

revenue

COPY

CENTER

- Declined by $10000

(4% decrease from

previous year)

- Has been growing

5% YoY 2012-2014

- Projected to

continue 5% YoY

growth

- Many small players

entering

ACTIONABLE RECOMMENDATION

18

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

Problem: Declining in profits by $50,000 in 2013-14

Investigate the source of the problem

Provide an actionable recommendation

Cyber Café

Divestment of Cyber Café Assets

Selling Cyber Café Division

Keep Cyber Café to drive other services

Invest and renew infrastructure to reinforce quality

Possible

Actions:

ACTIONABLE RECOMMENDATION

19

Case Problem Profitability Framework Market/Competitor Analysis Actionable Recommendation

Problem: Declining in profits by $50,000 in 2013-14

Investigate the source of the problem

Provide an actionable recommendation

Copy Center

Improve customer loyalty and satisfaction (benefits all

three revenue streams)

Customer Care

Employee Training

Performance Incentives

Technology Improvements

Possible

Actions:

Progress Report

MANAGEMENT & BUSINESS

CONSULTING ASSOCIATION

BOUTIQUE CONSULTING NIGHT

References

• Bryan Guilas. 2014. Homeless man and his dogs (CA to TX road trip). Retrieved from: https://www.flickr.com/photos/guilas03/14792466077

• Franco Folini. 2006. Homeless sleeping on the sidewalk. Retrieved from: https://www.flickr.com/photos/livenature/205736624

• Nick Page. 2013. Homeless sofa. Retrieved from: https://www.flickr.com/photos/nicksie2008/8408266786

• P K. 2006. Prague – grotto under the bridge – homeless living space. Retrieved from: https://www.flickr.com/photos/uair01/4696439126/in/photolist-8a1tJo-awVfwn-3xHuuE-pztfdG-e3CDpd-62rRuR-3yYh8H-c7YMjh-nLn6o8-xsuSu-6Mneuu-jYZykc-cWkQXL-8EPZgw-4Ly3F6-kufpY7-3mpXy-bGug6-4BaXLs-QQmtJ-dyUvDj-pQWdz7-5SG4q2-xofv8-nsLytq-87dyos-6iesHV-4rxJ5K-oi6Fji-pfj6f7-354SHA-83EF-66TamH-9HcPuo-8BMQsr-5BR3B4-6AJJg3-gWDhS-4FsfBQ-bN9dJB-63NTQE-9Uzu1L-7gYrbf-gWDoz-8nrASG-6AdKxY-7y45iU-7nBsm4-eiMGuB-oeJ9W