🎉India's First & Only Multi-Featured Consulting Prep Tool🎉
Case Prompt
The client is a leading school bus fleet operator in the country, operating at a national level with a market share of 50%. The client faces the problem of stagnant revenue and profits in an industry with razor-thin margins. The challenge is to recommend strategies to help the client realize 5% profitability growth within a 2-year period.
Background
The client operates in a price-sensitive market with limited pricing power.
The client has already achieved economies of scale and scope, has an optimal financial structure and has successfully implemented operational best practices.
The cost structure includes Capital Investments and Depreciation (20%), Maintenance Services (20%), Personnel Training (20%), Information Technology (10%), SG&A, wages, and others (20%)
Analysis
The client's core capabilities and competencies
The entire value chain of the client, including procurement, training, servicing, operation, and relationships with institutions
The possibility of dramatic improvement in the current business model
The need to develop selective competencies into new business models with higher growth and better margins.
Possible new revenue streams include leveraging the existing business model and extending assets into other business models and revenue streams.
The most significant opportunity lies in offering B2B and consulting services to the fragmented portion of the market, including personnel training, procurement, fleet maintenance, and IT.
The size of the consulting/outsourcing market is estimated to be $1 Billion, assuming the client captures 10% of the market in 2 years.
This will result in an additional profit of $25 million, meeting the 5% profitability growth target over a two-year period
Do you have questions on this case? Ask our community!
Ask a question