Then she said let’s play some numbers. I thought it would be some puzzle, but it turned out to be a case. The case problem: Our client is a manufacturer who makes premium food colors, from the past 2 years our client is facing loss in the operation. Please analyze and suggest some recommendation as to what should be done.

Question

Accepted Answer

[Please note that I stands for Interviewer and C stands for Candidate]

She gave me 2 minutes to think before-hand and went outside to do some work. I wrote down the frame work E(P=R-C) M as this was a profit loss case.

C: Our client is a manufacturer in the food color industry and is facing loss from past 2 years. We need to analyze the issue and provide recommendations; do we have any other objectives.

I: No.

C: Can I know the loss that our client has been making.

I: It’s not much 1-2% from the last 2 years.

C: Thanks, is this a market issue or only our client is facing such issues.

I: There are 5 major players in the premium food industry. Out of this 2 have already exited the industry. Our share has increased from 35 to 55% of the industry.

C: So, we have problem with the market. I will now try to look at the revenue and cost side.

I: Okay

C: I listed down the some of the revenue side and analyzed each of them, all the stream was increasing.

Then I analyzed all the cost streams such as labour, logistics and raw materials.

I: Yes, we are facing some issue with raw materials.

C: How do we source our raw material, what kind of suppliers we have, is it Omni channel or many suppliers.

I. We have only a single supplier supplying the raw materials.

C: has the supplier increased the rate in the past 2 years.

I: Yes, the supplier has increased the rate from the past 2 years. Now suppose I must present the situation to the board of directors and need to provide 3 recommendations that I can showcase, what would they be?

C: I provided some recommendation such as vertical integration, new products, automation, cost optimization, better long term negotiation, going for more suppliers. But she kept on asking more and more. She was looking for a suggestion which I was not able to understand.

I: What I was looking for was that the client can even exit the market if it’s not able to increase its profit.

C: Yes, but I think this is a long-term recommendation and as now we are having just 1-2% loss, I think we should look for near term solutions.

I: It’s ok, not a big problem, that will be all.

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