Casebook: The Indian Institute of Management Ahmedabad

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Casebook IIM Ahmedabad
Consult Club, IIM Ahmedabad
February, 2010

No part of this casebook may be reproduced or transmitted in any form or by any means electronic, mechanical, photocopying or otherwise without prior consent from Consult Club, IIM Ahmedabad.

T ABLE OF CONTENTS

PROFITABILITY

3

C ASE: TAXI DRIVER IN M UMBAI (BCG)

3

C ASE: CEMENT PRODUCE R (BCG)

6

C ASE: GLOBAL RETAIL B ANK (MCKINSEY)

DECLINING MARKET SHARE
CASE: MIDDLE-EAST RETAIL BANK (McKINSEY)

NEW PRODUCT

10

13
13

16

CASE: ANTI-SMOKING PILLS (BCG)

16

Case: BUNDLING APPLICATION SOFTWARE (BAIN)

19

MARKET ENTRY

22

CASE: RETAIL BANK IN INDIA (McKINSEY)

22

C ASE: DIAGNOSTIC LAB ORATORY CHAIN (BAIN)

25

GROWTH STRATEGY
CASE: BOILER COMPANY (McKINSEY)

INVESTMENT/DIVESTMENT

28
28

31

C ASE: HOTEL IN ARMY C ANTONMENT (BCG)

31

C ASE: COURIER COMPAN Y (BCG)

36

GUESSTIMATE
C ASE: BPO TALENT SUP PLY (BCG)

Consult Club @ IIM Ahmedabad (2010)

39
39

Page 2

P ROFITABILITY
C ASE: TAXI DRIVER IN M UMBAI ( BCG)
A taxi driver in Mumbai wants to increase his revenue and profits. The driver is the owner of the taxi and operates during the day time. The driver starts his day at the railway station and works for 10-12 hours daily.

Case Discussion
Candidate: Hi. I would like to clarify a few things before I start analyzing the case. Interviewer: Sure.
Candidate: What is the current state of the operations of the taxi driver? Has there been any recent change in fare policy? I am assuming that fuel, parking fee and maintenance to be the major cost heads. Is there any other cost that I am overlooking? Interviewer: Currently, the taxi driver is able to earn enough to make ends meet but is keen to increase his income. The fare policy is state determined and is unlikely to change in next 2-3 years. Apart from the cost mentioned by you, there isn’t any other hidden cost. Candidate: Okay. Now since this issue involves increasing income, I would try to look at increasing revenues and decreasing costs. On the revenue side, is the taxi driver operating on a fixed route or is he moving from point to point? The reason I am asking this is if he is operating at a single fixed stand, he might be returning empty to that stand; on the other hand, moving point to point would increase his waiting time. Interviewer: Good that you brought it up. The driver has a spot at the railway station which is considered a profitable spot but often returns to the station empty as he doesn’t often find people traveling towards the station.

Candidate: Hmm. Is the driver able to find a customer easily at the station? Is there a lean phase?
Interviewer: Yes for the first question. This is the reason of the station being a profitable spot. The trains regularly bring passengers all day long.
Consult Club @ IIM Ahmedabad (2010)

Page 3

Candidate: So, to reduce coming back empty towards the station, the driver should focus on routes with more potential passengers such as bus stands. He should try to focus on customers going to bus stand from the station and vice versa. Interviewer: That’s a fair suggestion but do you think that it would make a significant difference to the revenues of the driver?

Candidate: I think on the revenues side, we should also try to explore the options of revenue-sharing of taxi-fare by letting some other driver drive the taxi in the night. Interviewer: What would be potential issues with such a system? Candidate: First issue would be obviously finding such a person on whom the driver can place the trust. Revenue sharing model and accountability and proper maintenance would be another issue which needs to be looked into.

Interviewer: Is there anything else to increase the revenues? Candidate: The driver might offer advertisement space on his taxi. He can rely on references by tying up informally with academic institutions, hotels and such institutions. Interviewer:...
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