Booz was retained to work with the VP of International Business at a Consumer Packaged Goods (CPG) company. The CPG company, Neutrogena, is headquartered in Los Angeles, California and has 95% of its sales in the US. Neutrogena has 3 product lines: skin care, hair care and cosmetics. The majority of its sales and the focus of this case are on its sun care products, like sunscreen or sun tan lotion. Sunscreen (a.k.a. sunblock, sunburn cream or block out) is a lotion, spray, gel or other topical product that absorbs or reflects some of the sun’s ultraviolet (UV) radiation on the skin exposed to sunlight and thus helps protect against sunburn. The company’s total revenues from sun care products was about $1 billion for last year. Neutrogena was recently acquired by Johnson & Johnson. Johnson & Johnson wants to double its international sales in the sun care product division by 2013. Currently Neutrogena’s international sales, only 5% of total annual sales, are seemingly random, with no real vision or strategy behind it. Distribution is in diverse markets. We were hired by the newly appointed VP of International Business at Neutrogena to help our client in determining how best to approach this growth prospect.
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Guardian Industries is a privately held industrial manufacturer of glass and building products based in Auburn Hills, Michigan, and is one of the world leaders for float glass, fabricated glass products, fiberglass insulation and building materials. Employing over 19,000 people all over the world, Guardian Industries has present activities in North and South America, Europe, Asia, Africa and the Middle East. Guardian Industries has been producing glass for commercial windows for years. They have had a strong customer base to sell to and have done so over generations. Recently, the President, Chairman and CEO of Guardian Industries William “Bill” Davidson’s son has taken over the helm of the company. As the new CEO of the company, he is intent on growing the business to a higher level. He is looking at selling into the residential glass marketplace and have hired you to help him figure out what to do. Is this a viable option? How would you go about helping the new CEO?
You are the new owner of Westfield Old Orchard (formerly Old Orchard Shopping Center), a large open-air upscale shopping mall in Skokie, Illinois. It is the third largest mall in Illinois by total square footage, with 1.8 million square feet retail floor area in total. Anchor stores include Bloomingdale’s, Macy’s (formerly Marshall Field’s), Lord & Taylor, L.L. Bean and Nordstrom, etc. You need to find out how many pennies there are in your shopping mall at any given time. How would you approach this problem?
You are a new associate on an engagement involving Wrigley Field, a baseball stadium in Chicago, Illinois that serves as the home ballpark of the Chicago Cubs baseball team. It is vitally important that you are able to estimate the number of one dollar bills in the stadium at the end of the seventh inning stretch during a Saturday afternoon Chicago Cubs vs. New York Mets game. How would you determine this number?
The Global Consumer and Small Business Banking (GC&SBB) division of Bank of America, headquartered in Charlotte, NC, is the fourth largest bank in the U.S. by market capitalization as of 2011. The GC&SBB is the largest division in the company, and deals primarily with consumer banking and credit card issuance. The division head of BofA’s credit card business is considering launching a new cash-back reward credit card called “BankAmericard Cash Rewards”. The goal is to significantly grow their credit card business. You have been hired to advise them on rolling out this new product. Question #1: Is this new cash-back reward credit card a good idea?
Universal’s Islands of Adventure, aka Islands of Adventure, is a leading theme park located in Orlando, Florida. Opened in May 1999, along with CityWalk, Islands of Adventure was part of an expansion that converted Universal Studios Florida into the Universal Orlando Resort. In 2012, Islands of Adventure hosted approximately 8 million guests, ranking it sixth among US parks and tenth worldwide. The Business Planning group at Universal Parks and Resorts, the theme park division of NBC Universal that is responsible for the operation and maintenance of Islands of Adventure, must recommend to its CEO whether she should sign-off on a request to build a new ride in the Islands of Adventure theme park. The new ride will need a capital investment of $400 million. Currently, the market cannot support a rise in the park admission ticket price as a means to cover the investment expense.
Federal Signal, a $700 million company with its HQ in Oak Brook, Illinois, designs, develops and deploys solutions intended to protect people, property and the environment under brands such as Federal Signal, Elgin, Vactor, Guzzler, and Jetstream. They have engaged KPMG Advisory to examine one of their business subsidiaries that is under-performing. Elgin Sweeper Company manufactures street sweepers and has been doing so for more than 50 years. Elgin Sweeper Company’s profit margins started to fall and it is currently just above breakeven. Senior management of Federal Signal had made a decision 2 years ago that they did not want to invest in new features for their street sweeper product lines and has the approach that they don’t want to invest significant amounts of capital now (unless they can be convinced otherwise). KPMG’s task is to analyze the Elgin subsidiary’s performance and recommend to the management of Federal Signal what should be done.
All-Clad Metalcrafters, LLC is a manufacturer of cookware, food processing and preparation equipment that is sold to both households and restaurants. Headquartered in Canonsburg, Pennsylvania, the company sells its cookware and kitchen utensils to all 50 states kitchen utensils cookwarein the U.S., along with All-Clad bonded ovenware, kitchen tools, and kitchen accessories. 70% of the goods are produced and imported from China and Italy, while 30% are manufactured locally in the U.S. All-Clad has been in the industry for over 50 years and has a very strong brand name. Historically, All-Clad has enjoyed remarkable growth for a long time. Recently, however, the client has experienced a 1% decline in sales for each of the last 5 years and a comparable drop in earnings over the same period. The client would like to understand why the sales and earnings have dropped, and what can be done about this.
Madison Dearborn Partners LLC (MDP) is a private equity firm headquartered in Chicago, specializing in leveraged buyouts of privately held or publicly traded companies, and recapitalizations of family owned or closely held companies. Gumby’s Pizza is a family-owned American regional pizza chain based in Ann Arbor, Michigan. The chain runs pizza restaurants primarily in college towns throughout the Midwest region. As of 2011, the Gumby’s Pizza chain has about 50 store locations and an annual revenue of USD $250 million. The family owners of the Gumby’s Pizza chain Mr. and Mrs. Gumby are retiring and they have put the business up for sale. You have been hired by private equity firm Madison Dearborn Partners to evaluate whether or not they should buy the Gumby’s Pizza chain. In order for MDP to want to buy this chain, they need to be able to double its gross margin in 3 to 5 years. They’re looking for 2 or 3 feasible ideas of how to do that.
You’re a consultant in 17th century Venice, Italy and Powerpoint is your art canvas. You have just been hired by Galileo Galilei (15 February 1564 – 8 January 1642), an Italian physicist, mathematician, astronomer, and philosopher. The year is 1609. Galileo has just invented a new and more powerful telescope, with up to about 30x magnification. He’d like you to help him make some money off what he is sure will be a very useful invention. What do you tell him? How much money would Galileo make from telescope?
How many gallons of ice cream are sold in the United States each year?
(PriceWaterhouse Coopers) Interview question from Gartner Consulting : How many people fly in and out of La Guardia daily ?
The founder of Zynga online social game (think: Angry Birds), Mr. Pincus, has announced that he was stepping down as CEO and approached you to invest in a new software gaming company that he is starting. He wants you to make a seed investment of $1 million. Your $1 million will buy you a 50% stake in the company. Assume this investment is a one-year investment and no money from the company will be reinvested for the following year. Should you invest in your friend Mark Pincus’ new game company or in the other investment options that you have?
Leap Wireless International, Inc. (NASDAQ: LEAP) is a US-based public telecommunications company that provides wireless services to approximately 4.6 million subscribers through its subsidiary, Cricket Wireless. As of December 2013, Leap is the 6th largest wireless telecommunications network in the US, behind Verizon, AT&T, Sprint, T-Mobile, and U.S. Cellular. It is headquartered in San Diego, California. Leap Wireless is thinking of bidding for a new wireless license in the Philippines. With a population of more than 98 million people, the Philippines is the seventh-most populated country in Asia and the 12th most populated country in the world. The minimum bid is USD $150 million, and the license will last for five years. There are currently three other wireless operators in the country. Should Leap bid for the license? If so, in your view, what would the appropriate amount be?
Siemens has recently acquired U.S. Filter Corporation, a California-based U.S. company that handles waste management and filtration of water. The U.S. water treatment market is large ($400 billion annually), and very fragmented (the number one player has $2 billion in turnover). Siemens is asking you to develop a growth strategy for U.S. Filter Corporation.
MTU (Motoren und Turbinen Union), GmbH is a leading manufacturer of heavy duty commercial diesel engines for ships. Headquartered in Friedrichshafen of Germany, the company had $500 million in revenues last year (2011) and make 50 marine engines per year plus several hundred industrial engines, primarily for use in generating sets. Currently MTU Friedrichshafen has 90% of the German market share for marine diesel engines. This past year, however, they posted a net loss of $60 million. You have been brought in as a consultant by the CEO of MTU Friedrichshafen. Specifically, the CEO has two questions that he would like you to address: What are the causes of the $60 million net loss? What are the options for this company to turn around?
Vestas, a Danish manufacturer, installer, and servicer of wind turbines, is the largest EU manufacturer of wind turbines, operating plants in DK, G, It, Rom, GB, Spain, Sw, and Norway, and employing 20,000 globally. Wind energy is currently growing very rapidly in China and in the US. By the end of year 2012, there will be capacity issues in the US. Vestas Wind Systems has production capability in the US. The CEO of Vestas has elicited your consulting team to help determine two issues: Where to build manufacturing plant in the US? How many manufacturing plants to build?
The Viessmann Group is an international heating systems manufacturer headquartered in Allendorf (Eder), Germany. The company controls 23 production and project management divisions in 11 countries around the world. As of 2011 the company employs 9,600 people and reports annual sales of viessmann group boilers€1.86 billion. Viessmann Group provides an extensive range of HVAC (heating, ventilation, and air conditioning) products, including combined heat and power generation (CHP), heat pumps, solar thermal systems, ventilation and air-conditioning equipment. You have been approached by the boiler division of Viessmann Group and they want you to help them devise a growth strategy. Their main goal is to increase sales and preferably profits too. How would you go about the case? What recommendations would you give to the boiler division?
In the US, how many people are in the air right now?
Cisco Systems is a diversified technology corporation producing primarily telecommunications support equipment. With its headquarter located in San Jose, Ca, Cisco designs, manufactures, and sells telecommunications infrastructure and networking equipment. The company’s current portfolio of products and services focuses on three market segments – Enterprise and Service Provider, Small Business, and the Home. You have been hired by the CEO of Cisco to evaluate a product known as “Core Control”. This product handles basic call connectivity—recognizing phone numbers dialed and connecting outgoing calls to recipients. The customers of this product are AT&T, Verizon, T-Mobile and the like, and Cisco competes against companies like Lucent and Alcatel for sales. This is an IP-driven business, and the market has experienced a significant downturn in the last year. The CEO of Cisco has asked your consulting team to evaluate the future of the “Core Control” product line.
How would you approach this case? St. John Knits International Inc. is a family owned and operated manufacturer of branded men’s and women’s knit clothing. Headquartered in Irvine, California, the company is best known for its classic styling and extensive use of primary colors. The knit clothing market is typically highly fragmented. All production occurs overseas although St. John sells primarily to U.S. based retailers. St. John’s management has approached you with the following issue. It is the year 2006 now and they want to sell the business by 2008. They want to maximize the asking price by doubling the company’s EBIT (earnings before interest and taxes) over the next two years. Your job is to determine if that goal is feasible.
Huntington Memorial Hospital is a 635-bed not-for-profit hospital located in Pasadena, Ca, named after California businessman Henry E. Huntington. Huntington Memorial Hospital is a community-based medical center which provides acute medical care and community services to the San Gabriel Valley and nearby communities. The hospital is a world class destination for the treatment of epilepsy, prostate cancer, robotic minimally invasive surgery and bariatric surgery. Historically, the Huntington Memorial Hospital has been doing very well. In the last few years, however, the hospital has been hurting. The 635 bed institution has had consistently high patient volume growth, but is seeing a rise in the number of uninsured patients. Recently, it has been under operating margin pressure from the local government that is requiring the hospital to reduce its budget $100 million over the next three years. As a stipulation, the hospital cannot forgo service in this budget cut – it must maintain the same standard of service. At the same time, the management of Huntington Memorial Hospital are also looking for various ways to grow revenue. Your firm has been retained to assist the hospital management. What do you recommend about the budget cut, and how do you recommend growing revenue? Finally, what implementation challenges to do you see in your recommendations? difier.
The Lincoln Center for the Performing Arts is a 16.3-acre complex of buildings in NYC. The center has 29 indoor and outdoor performance facilities. Your client is the Jazz at Lincoln Center (JALC), a leading not-for-profit. Under the artistic direction of legendary jazz musician Wynton Marsalis, JALC is committed to providing top quality Jazz performance and education to the world.
In 2004, JALC moved to the Time Warner Center – a high end commercial and corporate complex located on Columbus Circle. The move provided JALC with new, state-of-theart facilities, greater capacity (from 3000 to 4000 seats), and performance venues with expansive views of Central Park. JALC receives three primary revenue streams: subscriptions, single ticket sales, and donations. JALC, like all major performing arts organizations, relies on patron subscriptions to smooth demand and provide up-front cash flows. The general rule of thumb is that 50% of tickets should be sold to subscribers and 50% to single ticket holders. The move to Time Warner Center has been a mixed blessing for JALC. In response to significantly higher fixed costs (rent, utilities, etc.), JALC had to increase ticket prices an average of 75%. However the move has also generated significant press attention and general buzz across New York City. Although attendance has been up since the move, subscription rates have declined in each of the first two years in the new venue. You have been hired by JALC’s Director of Marketing to assist in boosting subscription rates. The U of Illinois Medical Center (UIMC), is composed of a 507-bed hospital, outpatient diagnostic and specialty clinics, and two Federally Qualified Health Centers (FQHCs) that serve as primary teaching facilities for the University of Illinois at Chicago (UIC) Health Science Colleges. The board of UIMC has hired Deloitte Consulting to reduce expenses in their Emergency Room (ER). They have identified the ER as one of their highest costs departments, and have set a target of reducing operating costs by 25% within two years. They would like your assistance in identifying the opportunities for cost reduction, redesigning the operations to eliminate the costs, and implementing the changes.
Scotts Miracle Gro Company in Marysville, Ohio is a consumer packaged goods (CPG) company that manufactures lawn and garden consumable products such as lawn and plant fertilizers, Scotts Miracle-Gro grass seeds, and weed and insect control products. This accounts for a majority of the business and is $1.9 Billion of their $2.7 Billion annual sales. They also have other divisions in the outdoor living category such as professional lawn services and retail stores with outdoor furniture, garden tools, and accessories, which earns the remaining $0.8 Billion revenue. The Scotts Miracle-Gro Company has seen their profitability in the CPG business decline and has approached you to find out why and recommend a solution.
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Strategy Consulting
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