ABC

 COMPANY  
CASE TYPE: PROFITABILITY – REVENUE
FIRM/STYLE: AT KEARNEY
REGION: EUROPE
DIAGRAMS: NO
DIFFICULTY: 1/4
TIME: 15 MIN

M A N A G E M E N T   C O N S U L T E D ,   I N C .      
 CASE  INTRO  

Your client, ABC company, has one main customer, XYZ. Revenues from XYZ
have been declining. How should they grow revenues from XYZ?

XYZ represents 30% of ABC’s revenues.

ABC has over 100 customers in total.

M A N A G E M E N T   C O N S U L T E D ,   I N C .      
 CASE  CREATIVE  QUESTION  

Please outline potential issues and how they could be addressed. Using
business logic and explaining rationale is key.

Specifically, please come up with a list of 5 to 10 potential issues and how they
could be addressed.

M A N A G E M E N T   C O N S U L T E D ,   I N C .      
 CASE  CREATIVE  ANSWER  

One approach to cracking the case is the following…

Understand why XYZ revenues are declining:

Factors we cannot control

•  changing product mix
•  changes in macro-environment/XYZ’s ability to compete
•  changing needs

Factors we can control

•  dissatisfied w/ ABC
•  quality
•  price
•  service/relationship

M A N A G E M E N T   C O N S U L T E D ,   I N C .      
 CASE  CREATIVE  QUESTION  

Based on issues you mentioned above, what possible solutions could you come
up with?

How would you rule out or clarify some of the issues using data?

M A N A G E M E N T   C O N S U L T E D ,   I N C .      
 CASE  CREATIVE  ANSWER  

Factors we cannot control

•  What is going on in macro-environment?
•  Recession? Does that explain decline?

•  Is XYZ less competitive? are we part of the problem?

•  Why is mix changing? have XYZ’s outputs changed?
•  Are XYZ’s customers changing? (ABC may not be able to control these factors)

Factors we can control

•  Improve quality è develop plan & clearly communicate to XYZ to explain plan
to meet quality standards

•  Evaluate pricing (volume, pricing matrix, etc)

•  Do we have a new relationship team, slower deliveries, etc. ?

M A N A G E M E N T   C O N S U L T E D ,   I N C .      
 FINAL  RECOMMENDATION  

For our final recommendation, we would need to gather more data.

However, it will be largely dependent on whether or not the issue is something we

can control (like our price, quality or service levels) or something out of our
control. We’ll need to interview the customer and also review our other customer
relationships.

Long-term/Big Picture things to consider for next steps:

•  Are other customers at risk?

•  Is company too dependent on XYZ? Should they diversify revenue base?

M A N A G E M E N T   C O N S U L T E D ,   I N C .