P
ProHub
English 简体中文 繁體中文
Bain Medium Operations Cost Analysis Offshoring Decision

Toothpaste Manufacturer

#CPG #Consumer Goods #Manufacturing
ProHub Comment

This case tests the candidate's ability to conduct a comprehensive offshoring analysis by combining market sizing, cost-benefit analysis, and strategic risk assessment. The case progresses logically from understanding market fundamentals to evaluating feasibility, requiring candidates to weigh quantitative savings against qualitative operational and geopolitical risks.

Estimated Time 15 minutes
Difficulty Medium
Source Cornell
50 / 100
Our client is a major toothpaste manufacturer based in the United States that serves the US market. Our client wants to lower costs and is considering moving manufacturing operations to Vietnam.

Clarifying Information

  1. There is one major competitor and a few small players in the market. Our client’s market share is about 30%.
  2. Competition is growing. All players are looking for ways to decrease costs, as costs have been steadily increasing over time.
  3. The plant is located on the east coast and ships to 4 distribution centers throughout the US
  4. Total fixed costs for setting up the Vietnam plant will be $0.5B