For a long time, I have been a management consultant wannabe. Some time ago, I applied to a consulting firm, and requested to complete a case study. I was not selected after that stage.
Even though I am not going to explore that further. I would like to know how my work can be improved. Any advice?
(I have no background in management, strategy ..., I just did by common sense)
A global manufacturer of silicon faces a fall in its profits to the electronics industry which purchases mostly in bulk and a rise in its profits to the beauty care sector.
(Q) What are the issues you should investigate to address the profit challenge?
As the client is a global manufacturer, the case can be considered from a macro view. In other words, the factors related to a small region or a single country with low consumption can be neglected. Even though the purchases form electronics industry are mostly in bulk, the possibility of phasing problem is minimal due to the size of the client. Also, the profit changes differently among industries, so it is believed that the cost of the client is not the main cause.
With the above considerations, the client’s profit drop to the electronic industry may be due to a fall in demand of silicon. The following should be investigated to address the profit challenge:
o Technology advancement reducing the use of silicon in electronics device production
o Availability of silicon substitute for electronics use
o Drop in demand of electronics products in consumer market (unlikely)
There may also be some factors related to supply:
o Increase in number of silicon manufacturers and silicon supplies in the market
o Silicon price cut by competitors
Regarding the profit to beauty industry, the growth may be attributed to the factors below:
o Discover of new silicon applications in beauty industry
o Improvement in public acceptance of silicon beauty products
o Change in population structure, e.g. rise in population of working women who makeup frequently
o Increase in range of male grooming products
o Rise in income of target group, especially in emerging markets
(Q) Based on the limited information above, what are the possible solutions you would recommend?
In order to arrest the fall in electronic sector, the client is recommended to provide more and better services, e.g. better product QA/QC and aftersale services etc, to their customers. Not only this can differentiate themselves from competitors and enhance customer relationships, but can also collect market insights which offer ideas for R&D use. Wider electronic applications of silicon should be explored to expand the market.
For the beauty sector, their customers should be interviewed to identity the most preferred product categories and see how we can grow with the uptrend. Because the overall industry is expanding, new silicon beauty products should also be explored through discussion with manufacturers and investment in R&D. New beauty product manufacturers will also be expected so extra efforts should be put on capturing new customers.